1. Knock-outs are CFD’s on a bought option, which means you cannot go short on them. You can buy a bull knock-out if you expect the market to rise, and buy a bear knock-out if you expect the market to fall.
2. The knock-out is automatically closed off at 0 if the relevant bid/ask reaches the knock-out level before expiry. The knock-out level chosen by you is guaranteed and therefore protected from slippage.
3. The price of a knock-out is the difference between the underlying IG price and the knock-out level, plus the knock-out premium. The premium is included in our spread, so you pay it when you buy to open and receive it back if you sell to close before your knock-out level is triggered.
4. The knock-out premium is variable, based on anticipated risk in the underlying market. The premium may increase if market volatility increases, and decrease if market volatility decreases. It is possible the value of the knock-out premium will change while you have an open position. If the premium increases your knock-out will be worth more, and if the premium decreases your knock-out will be worth less.
5. Spreads are subject to variation, especially in volatile market conditions. The spreads are equivalent to underlying IG market spreads. Please see the individual IG underlying market pages (indices, forex and commodities) for further information on how their spread is determined.
6. The margin for 'buying' a knock-out is the opening price multiplied by the size of the position. This is the maximum amount that the position can lose.
Overnight funding charges
Interest adjustments are calculated as follows:
D = n x C x i / 365
D = daily interest adjustment
n = bet size (Amount per point)
C = underlying index price at 10pm (London time)
i = applicable annual interest rate
Note: The formula uses a 365-day divisor for the FTSE® 100 , and a 360-day divisor for all others.
Dealing spreads may be offered as a fixed or variable amount. If variable spreads are in use, then the spread shown in this table is the amount of IG spread added to the underlying futures market spread. Any variable dealing spreads are marked with an asterisk (*).
Interest in respect of long positions is debited from your account, and interest in respect of short positions is either credited to or debited from your account.
Adjustment for dividends
A dividend adjustment is applied to take account of the ex-dividend adjustment to the index. This is the number of points by which the index price must be adjusted downwards to take account of those shares in the index which go ex-dividend at the close of the cash market. We will use the ex-dividend figure estimated by Bloomberg (E&OE), rounded to the tick size we use for that index, to determine what adjustment to apply. In the case of long positions, the dividend adjustment is credited to your account. In the case of short positions, the dividend adjustment is debited from your account. No adjustment is made to your knock-out level in either case.