Our margin requirements
Trading on margin can be a useful way of making your capital go further, enabling you to make profits far in excess of traditional trades without having to commit to a larger deposit. But it also comes with the risk of much larger losses, which can even exceed the amount of capital in your account.
To help prevent this from happening, we have a margin policy where we can close your positions automatically if you don’t have the funds to keep them open.
You will need to, at all times during which you have any open transactions, ensure that your account balance is equal to at least the initial margin that is required for all open transactions. Any shortfall between your account balance and your total initial margin requirements, you will be required to place additional funds into your account. These funds will also be due and payable to us immediately on your account balance falling below your margin requirement.
In making any calculation of the Margin payments that we require from you we may, at our absolute discretion, have regard to your overall position with us including any of your net unrealised losses (ie losses on open positions).
For full details, please refer to Term 15 of the Margin Trading Customer Agreement.
What is a margin call?
Margin call is the term for when the equity on your account – the total capital you have deposited plus or minus any profits or losses – drops below your margin requirement. You can find both figures listed at the top of the IG platform.
At this point, your positions become at risk of being automatically closed in order to reduce the margin requirement on your account. You can also go into a margin call on the weekend for markets that are open.
You can rectify the situation yourself in one of two ways: deposit enough funds to increase your equity above the margin requirement, or close positions to reduce it. Or if you need more advice, call our dedicated support team on +65 6390 5118 for information on what to do.
When will my positions get closed?
Typically, there are three scenarios in which your positions will get automatically closed. However, we can’t always apply this protection and you shouldn’t rely on us doing so.
- If your equity drops beneath 50% of your margin requirement
- If you remain on margin call constantly for 48 hours
- If you are on margin call during periods of increased volatility, or periods when we anticipate increased volatility
Our margin requirements are subject to change. If they increase on one or more of your positions then your current equity may not be enough to keep positions open.
Finally, it is important to remember that we could close you out at any time when you are on margin call. It is your responsibility to have enough funds on your account to fully cover the margin requirement of your open positions.
Will I get notified?
We are not under any obligation to keep you informed when you are on a margin call. However, if we do so, we may contact you by telephone, post, fax, email or text message.