Utilising margin can be a great way of making your money work harder, as you can make profits that are usually only possible with a much larger investment. But with that benefit comes the risk of suffering greater losses if your trade moves against you, including the risk of losing more than you have in your account.
In order to help prevent this from happening, we have a margin policy in place whereby your positions can be closed by us if you don’t have sufficient funds to keep them open.
How do I see my margin requirements?
To find out how much margin we currently require to keep your trades open, take a look at the top of screen on the trading platform. There are two figures to keep an eye on here:
- Equity is the amount of funds you have in your account plus or minus any profit or loss
- Margin is the amount of equity we require to keep your trades open
If the markets move against you, your level of equity will fall. If your equity falls beneath the amount required for margin, your ‘available to deal’ figure will drop into a negative and you’ll be on what is referred to as a margin call.
What can I do if I am on a margin call?
Your positions will now be at risk of being closed out, and you will have two options to prevent that from happening.
- You can add funds to your account, increasing your equity and covering the margin requirement.
- You can reduce your margin requirement by closing positions
If you do neither of these things, our margin policy states that we can then close the positions on your behalf to stop you from incurring a negative balance.
However, our margin policy
is not a guarantee against this scenario. So if you’d like to ensure that your position is closed at the level you specify, you can use a guaranteed stop.
Learn more about IG's margins