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Margins

Our tiered margining system means we can offer rates that remain competitive while reflecting the size of your position and associated liquidity of the market.

What is margin? 

Margin trading gives you full exposure to a market using only a fraction of the capital you’d normally need.

Margin is the amount of money you need to open a position, defined by the margin rate. 

For example: if you were to buy £1000 of shares through a traditional broker, you’d need to pay the full £1000 upfront to own them (plus the associated broker charges).

As a CFD is a leveraged product, you don’t need to pay the full value of your exposure in order to deal. Instead, you’ll only need to put up a fraction of your total exposure to open your position.

There are two types of margin to consider:

Initial margin

The initial margin is the minimum amount you’ll need to put up to open a position. It is sometimes called the deposit margin, or just the deposit.

Maintenance margin

The maintenance margin, also known as variation margin, is extra money that we might need to request from you if your position moves against you. Its purpose is to ensure you have enough money in your account to fund the present value of the position at all times – covering any running losses.

Things to remember

  • Ensure you have enough funds in your account to cover both margin and losses.

  • Limit potential losses and reduce your margin requirement by using stops (tier one only).

Our margin requirements

Here's a summary of our tier one margin requirements for some of our most popular markets. For all tier one margins, you can reduce your margin requirement with the use of stops. 

See each market's charges and costs for individual margin rates.

Shares

Shares CFDs
Apple 5%
Barclays PLC 5%
BHP Billiton PLC (LSE) 5%
GlaxoSmithKline PLC 5%
Vodafone Group PLC 5%

Forex

Forex CFDs
EUR/USD 0.5%
GBP/USD 1%
AUD/USD 0.5%
EUR/JPY 0.5%
USD/CHF 1.5%

Indices

Stock index CFDs (margin
per contract)
FTSE 100 £230
 
Wall Street $500
 
Germany 30 €700
 
Hong Kong HS50 HK$3500
 
Japan 225 $250
 

Commodities

Commodities CFDs
Spot gold 1%
Silver (5000oz) 1.5%
High Grade Copper $1175 per contract
US Light Crude $650 per contract
Brent Crude $750 per contract

How are shares margins calculated?

No stop

Number of shares x share price x margin percentage

E.g. 1000 Vodafone shares at a price of £1.94:

1000 x 1.94 x 5% = £97 margin

Stop

(Margin for equivalent trade with no stop x slippage factor) + value per point* x stop distance

E.g. 1000 Vodafone shares at price of £1.94, with a non-guaranteed stop 3 points away:

(£97 x 30% + (£10 x 3) = £59.10 margin

* Note: 100 UK shares = £1 per point, 100 US shares = $1 per point, 100 Euro shares = €1 per point etc

Guaranteed stop

Value per point x stop distance + limited risk premium

E.g. 1000 Vodafone shares at a price of 194, with a guaranteed stop 11 points away and 0.3% limited risk premium (1000 x £1.94 x 0.003 = £5.82):

£10 x 11 + £5.82 = £115.82 margin

Margin requirements for positions with non-guaranteed stops are capped at the amount of margin for no stop (ie. if the stop is wide then the calculations used may give a higher margin requirement than the calculation for no stop. If this happens then we limit the margin to the amount required for the same position with no stop).

How are FX margins calculated?

No stop

Number of contracts x contract size x price x margin percentage

E.g. 2 contracts GBP/USD:

2 x £100,000 x 1.53470 x 0.25% = $767.35

Stop

(Margin for equivalent trade with no stop x Slippage Factor) + (Number of contracts x value per pip x stop distance)

E.g. 2 contracts GBP/USD with a non-guaranteed stop 20 points away:

($767.35 x 20%) + (2 x $10 x 20) = $553.47 margin

Guaranteed stop

Number of contracts x value per point x stop distance + limited risk premium

E.g. 2 contracts GBP/USD with a guaranteed stop 20 points away and 1-point limited risk premium:

(2 x $10 x 20) + ($20 x1) = $420 margin

Margin requirements for positions with non-guaranteed stops are capped at the amount of margin for no stop (ie. if the stop is wide then the calculations used may give a higher margin requirement than the calculation for no stop. If this happens then we limit the margin to the amount required for the same position with no stop).

How are index margins calculated?

No stop

Number of contracts x margin per contract

E.g. one contract of FTSE 100:

1 x £230 = £230 margin

Stop

(Number of contracts x slippage amount per contract) + (number of contracts x contract size x stop distance)

E.g. 1 contract FTSE 100 with a non-guaranteed stop 12 points away:

(1 x £46) + (1 x £10 x 12) = £166 margin

Guaranteed stop

Number of contracts x contract size x stop distance + limited risk premium

E.g. 1 contract FTSE 100 with a guaranteed stop 12 points away and 1-point limited risk premium:

1 x £10 x 12 + 1 = £130 margin

Margin requirements for positions with non-guaranteed stops are capped at the amount of margin for no stop (ie. if the stop is wide then the calculations used may give a higher margin requirement than the calculation for no stop. If this happens then we limit the margin to the amount required for the same position with no stop).

How are commodities margins calculated?

No stop

Number of contracts x contract size x price x margin percentage

E.g. one contract of Oil - US Crude:

1 x $10 x 3350 x 1% = $335

Stop

(Deposit requirement for no stop x slippage factor %) + (number of contracts x contract size x stop distance)

E.g. one contract Oil - US Crude with a non-guaranteed stop 12 points away:

($335 x 50%) + (1 x $10 x 12) = $287.50 margin

Guaranteed stop

Number of contracts x contract size x stop distance + limited risk premium

E.g. one contract Oil - US Crude with a guaranteed stop 90 points away and 4-point limited risk premium:

1 x $10 x 90 + 4 = $940 margin

Margin requirements for positions with non-guaranteed stops are capped at the amount of margin for no stop (ie. if the stop is wide then the calculations used may give a higher margin requirement than the calculation for no stop. If this happens then we limit the margin to the amount required for the same position with no stop).