Deposit margin definition

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Deposit margin has a particular significance in relation to IG's platform. Here, we define deposit margin in general investing and explain what it means to you when trading with IG.

Deposit margin is the amount a trader needs to put up in order to open a leveraged trading position. It can also be known as the initial margin, or just as the deposit.

It is one of two main types of margin needed to hold an open a leveraged position. The other is called maintenance margin. The amount needed as a deposit margin depends on the derivative being used and the market being traded. Markets with higher volatility will tend to require a higher deposit margin.

Deposit margin example

You want to open a CFD trade on 1000 shares of DBS, when DBS shares are trading at $14 and DBS has a deposit margin requirement of 10%. The total value of your position is $14000, so the margin required is $1400 (10% of 1000*14).

With IG

CFDs are leveraged products, and as such will require a deposit margin. We tier our margin requirements depending on the size of your trade. Margins will also vary due to the market being traded, and whether guaranteed stops are used.

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