Make the most of your shareholdings - use up to 95% of their value as margin to cover your CFD trades
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- About IG
With our collateral service you can use up to 95% of the value of the holdings in your account, instead of cash, to cover margin requirements on your CFDs.
Your shareholdings remain intact and retain their full value; you simply use a percentage of their worth as collateral to fund shorter-term trades.
Free up funds in your investment portfolio to open short-term trades
Use up to 95% of the value of your shares as collateral
Hedge against currency exchange risk when trading international equities
Protect your portfolio from falling markets with short CFD positions
First you'll need both an IG share trading account and a CFD account.
You can then link your CFD account to your share trading account from within the web-based platform.
Once linked, you can use a percentage of the value of your shareholdings as collateral to cover the margin on your CFDs. How much depends on the make-up of your portfolio.
Importantly, you can only use your shareholdings to cover the initial margin on your CFDs. Any running losses will need to be covered by the available cash in your margined account.
We endeavour to make sure you have the opportunity to cover any realised CFD losses with cash.
If you do not deposit additional funds to cover a losing CFD trade, we will follow our normal process of closing the trade and informing you that your account is in debit.
We will only take control of your shares if your account remains in debit after we have gone through our normal fund transfer request process.
Please ensure you have enough cash in your CFD account, or transferable cash, to cover any losses you may incur.
Got a question? Call us on 1800 601 799 or +61 (3) 9860 1799.
Generally you can use 75% - 95% of the value of your shareholdings as collateral, depending on the liquidity of the shares.
See our shares list for the collateral values associated with each share.
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 the stock is discounted or ‘haircut’ when calculated for collateral purposes.
Typically, the discount varies between 5% and 50%, depending on the volatility and liquidity of the individual stock. Please refer to the stock haircut rates for further information.
Any cash held on your share trading account can also be used as collateral on your CFD account, at 100% of the value.
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 to avoid bringing your account into margin call.
Can I use collateral to open CFD positions in the same stock?
If you are using physically held shares in a company to collateralise 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.
On the contrary, 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 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 value greater than the collateral value, as cash has no haircut.
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.
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.
When using IG’s collateral service your share portfolio is at risk. We reserve the right to liquidate any stock held on your share trading account to offset any debit balance incurred on any of your other IG accounts.