Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

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New to IG: +35 318 009 95362
Existing clients: +35 318 009 95364
Email: newaccounts.uk@ig.com

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Managing your risk

Barriers, turbo24s, spread bets, CFDs and vanilla options come with a unique set of risks. You can take control of these using our risk management tools, and ensure you're well informed with our range of educational resources.

What are the risks?

The risk

When might it happen?

Why it happens Ways we help
Losing more than the money on your account.
  • When spread betting
  • When trading CFDs
  • When selling vanilla options

You can’t lose more than the money on your account when buying barriers, turbo24s or vanilla options, as you put up the maximum risk to open your trade.

Sometimes your positions may close and leave you with a negative cash balance on your account – putting you in debt to us.

Thanks to negative balance protection, we bring negative accounts back to zero at no cost to you.1

Losing more than it cost you to open your trade.
  • When spread betting
  • When trading CFDs
  • When selling vanilla options

You can’t lose more than you paid to open when buying barriers, turbo24s or vanilla options, as you put up your maximum risk when you place your trade.

When you trade CFDs, spread bet or sell vanilla options to open, you only need to put up a fraction of your trade’s value – the margin. So while you can win – much more than your initial deposit, you can also make mych greater losses.

You can mitigate risk and lock in profits with spread bets, CFDs by setting an automatic stop or limit, to define the level you'd like your trade closed at.

Find out more about stops and limits

Having your positions closed unexpectedly, resulting in you losing money.
  • When spread betting
  • When trading CFDs
  • When selling vanilla options

When you buy barriers, turbo24s or vanilla options, you pay all that’s needed to keep your position open upfront. Barriers and turbo24s may close automatically, but only ever at the knock-out level you choose.

You need a certain amount of margin in your account to keep your CFD, spread bet or sold vanilla trades open. If your account balance doesn’t cover our margin requirements we may close your positions for you.

Keep an eye on your always-visible running balances in our platform or app, and add more funds if they’re needed.

Find out more about balance snapshots

Sudden or rapid losses (or gains).
  • When spread betting
  • When trading CFDs
  • When trading barriers, turbo24s, and vanilla options

Markets can be volatile, moving very quickly and unexpectedly in reaction to announcements, events or trader behaviour.

The higher the leverage you’re using on a trade, the faster any loss or gain will grow – although your maximum loss will be limited to your initial outlay when buying barriers, turbo24s or vanilla options.

As well as setting stops, you can also be notified of significant movement on your spread bet or CFD trade by setting a price or distance alert, giving you the choice of whether or not to react.

Find out more about alerts

Having an order (an instruction you give us, to open or close a trade for you when the market hits a certain level) filled at a different level to the one you requested.
  • When spread betting
  • When trading barriers, turbo24s and CFDs
  • When selling vanilla options

Orders to open and close aren’t available for vanilla options.

When a market moves a long way in an instant – or ‘gaps’ – any orders you have placed may be filled at a worse level than the one you requested. This is called slippage.

Use guaranteed stops on spread bets and CFDs, or your knock-out level on barriers and turbo24s, for watertight protection against slippage. Guaranteed stops are free to place, with a small premium payable only if your stop is triggered.

Find out more about guaranteed stops

What is leverage?

Leverage enables you to gain a large exposure to a financial market while only tying up a relatively small amount of your capital. In this way, leverage magnifies the scope for both gains and losses.

Is leveraged dealing risky?

When buying barriers or vanilla options, you pay your maximum risk to open your position in the form of an option premium. This is usually smaller than buying the underlying asset outright, and is the maximum amount you could lose should the market turn against you.

Turbo24s are similar, in that your initial outlay to buy the security is also your maximum loss.

When selling vanilla options, you receive the premium upfront, which is your maximum profit. If the market moves against you, you could lose far more than this premium.

For spread betting and CFDs, even though you only put up a relatively small amount of capital to open a position, your profit or loss is based on the full value of the position. Therefore, the amount you gain or lose could be relatively large compared to your initial outlay.

Protect yourself in our platform

Protect against adverse movements for free

Set a stop-loss to close your CFD position automatically if the market moves against you. There’s no trigger charge, but no guarantee of protection against slippage – so your position could be closed out at a worse level if the market gaps.

Choose exactly where your trade closes

Attach a guaranteed stop to your CFD position, and it’ll always be closed out at exactly the price you specified. Barrier options and turbo24s have this guaranteed stop built in, in the form of the knock-out level.

What’s more, you’ll only pay for your stop if it’s triggered. If this happens, our guaranteed stop premiums still offer the best value in the market for most major indices and FX pairs.

Don’t miss out on profits

Place a trailing stop when you open your CFD trade and it will move with your profit. If the market turns, your position will close out at your trailing stop’s new level. So you can lock in profits without the need to monitor your position and adjust your stop.

Like regular stop-losses, trailing stops don’t protect against slippage.

Take profit automatically

Set a limit order in line with your profit target, and we’ll close your position for you when the price hits your chosen level. Available on barriers, turbo24s and CFDs.

Stay on top of market movement

Set price alerts, and we’ll notify you by text or email when a market reaches your specified price.

Always know your profit and loss

Keep an eye on the always-visible balance snapshot in our platform, and react quickly if the market moves against you, and deal out almost instantly to protect a profit or minimise a loss.

Benefit from negative balance protection

Regulations ensure that if your balance does go negative, we’ll be obligated to bring it back up to zero at no cost to you.1

Other ways we help

Deal with reduced minimums

Build your confidence while you get used to trading with us, by dealing with reduced minimum deal sizes for a limited time when you open an account.

We offer reduced minimums on spread bets, options and CFD trades.

Find out more

Built-in risk protection

To help protect you from excessive losses, we’ll start closing your positions if your account equity (cash balance +/- running profit/loss) falls to 50% or less of your margin requirement. However, we can’t always apply this protection immediately and you shouldn’t rely on us doing so. It’s sensible to maintain adequate funds in your trading account to avoid potentially being closed out.

This protection is unnecessary for turbo24s, since your maximum risk is paid upfront and all potential fees are inherent in the turbo price. The cost of overnight funding is accounted for by a small daily adjustment to your knock-out level.

Watch the video to find out more about margin call.

Managing your risk FAQs

When you place a stop-loss order, sometimes referred to simply as a ‘stop order’, you’re instructing your broker to execute a trade on your behalf at a less favourable level than the current market price.

You’ll usually do this to limit your losses on a position, in the event that the market moves against you. Set your stop-loss at a certain level, and your broker will close your position for you when the market hits that level – so you don’t need to watch the markets constantly.

It’s worth remembering that stop-loss orders do not protect against slippage resulting from markets ‘gapping’, or moving a large distance in a split second due to unforeseen external influences. You can ensure your trade is executed at exactly the level specified by using a guaranteed stop. With IG they’re free to place, and carry a small premium if triggered.

If you’re placing a stop-loss order on a long trade – a trade where you’ve bought a market in the expectation that its price will go up – your stop-loss order will be an instruction to sell at a worse price than the one you opened your trade at. Conversely, a stop-loss order on a short trade (where you’re selling a market) is an instruction to buy at a worse price than you opened at.

Where you place your stop-loss depends on how much risk you’re prepared to take on. Watch our video to learn three popular strategies for deciding stop placement, and using them to manage your risk.  

In trading, ‘risk’ refers to the possibility of your choices not resulting in the outcome that you expected. This can take the form of a trade not performing as you’d thought it would, meaning that you make less – or indeed, lose more – than originally anticipated.

Trading risk comes in a range of forms. The most common is ‘market risk’, the general risk that your trades might not perform based on unfavourable price movements – affected by a range of external factors like recessions, political unrest and so on.

Traders are usually prepared to take on some degree of risk in order to participate in the markets, and hopefully make their trading profitable over time. How much trading risk they’ll take on depends on their strategy, and the risk-reward ratio they’ve set for themselves.

It’s therefore important to recognise how much capital you can stand to risk, both on a per-trade basis and as a whole over time.

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1Negative balance protection is a requirement of the European Securities and Markets Authority (ESMA), and applies to trading-related debt only. It is not available to professional traders.