Can I transfer existing shareholdings to IG?
Yes. If you have an IG share trading account, you can transfer existing shareholdings to your IG account for free. If you do not currrently have an IG share trading account, you can open one with no minimum balance or log in to add it to your existing IG account.
Please note that if you are running a net loss on your CFD account and the net loss exceeds the amount of cash, you will also be placed on margin call (regardless of the available collateral).
How does collateral work?
The service works by offsetting some of the value of physical stock held on your share trading account against the deposit requirement of your CFD account. To allow for the possibility of price movements, the value of your holdings is discounted when calculating the amount of collateral that you can use.
Typically, the discount varies between 5% and 50%, depending on the volatility and liquidity of the individual stock. Our shares list provides information on the collateral rates for each share.
Any cash held on your share trading account can also be used as collateral on your CFD account, at 100% of the value. The collateral value can only be used to cover the margin requirement on your CFDs, and not any running losses.
Does collateral cover running losses?
No. Collateral can only be used on your CFD account to cover deposit requirements for open positions. Collateral cannot be used to cover running losses, so you will need to ensure that there are sufficient funds in your account to cover any such losses. If the running losses on your CFD account exceeds the amount of cash held on the account, your account will be in a margin call.
Can I use collateral to open CFD positions in the same stock?
If you are using physically held shares in a company as collateral for a long CFD position in the same stock, the positions will be aggregated when calculating the margin tiers. This means that the physical and CFD positions will be considered holistically to determine your total position size and how this fits into the defined tiers.
Conversely, if you open short margin positions in the same stock, the margin and physical positions will be tiered separately, with no offsetting between the two.
Is the ‘collateral value available’ figure real-time?
Yes, the collateral value will be real-time. This means the value of the assets in your share trading account that will be available to you, the ‘collateral value’, will fluctuate according to the price movement(s) of the stock(s) held in your share trading account.
Can I move cash or stock on the share trading account?
If you hold cash in your share trading account and it is being used to maintain open positions on your CFD account, you will not be able to withdraw these funds until this cash is no longer being utilised as collateral. To do this, you may be required to fund your CFD account, or your share trading account, or close some open positions on your CFD account, as necessary.
If you hold instruments in your share trading account that are being used to maintain open positions on your CFD account, you will be able to instruct the sale of those instruments, provided your collateral value does not fall below the amount of margin required to fund the open positions on your CFD account. This is because when instruments are sold, the resulting cash should have a collateral value greater than the collateral value of the stock, as there is no haircut on the value of cash held.
What happens if I default on my CFD account?
You will be liable for any debit balances on your CFD account in accordance with the terms of your customer agreement. By linking your accounts, you have given us the right to liquidate instruments held in your share trading account to apply to debit balances incurred on any of your CFD account.
We also have rights of set-off under your various customer agreements, which would allow us to offset the proceeds of sale of instruments held in your share trading account against the debit balances of any other accounts you hold with us.
We are under no obligation to pay any money to you if that would reduce your credit balance (less amounts owed to us in relation to that account) to less than the amounts owed to us.
Remember that Pro Level 1 clients with collateral enabled are not eligible for negative balance protection. For avoidance of doubt, negative balance protection is not a feature available to Pro Level 2 clients. For more information, please refer to our Pro website.
At what point will my account be on margin call if I am using collateral?
If the collateral value plus net equity (cash balance +/- profits/losses) falls below the total deposit required for open positions on your CFD account, your account will be on margin call.
Please note that if your CFD account is on margin call, we may without further notice cut back or close all or any of your open positions. We will try to contact you when extra funds are required, but can make no commitment to do so. This may cause losses greater than the funds on your account. Please get in touch if you’re ever unsure whether your positions are at risk of being closed out.
Is collateral available to corporate and trust accounts?
Yes, we do offer collateral for corporate and trust accounts, but not for self-managed superannuation funds.
Got a question? Call us on 1800 601 799 or +61 3 9860 1799.