Why did my trade close unexpectedly?

When trading with a spread betting and CFD account, you need to regularly monitor your account’s balances to ensure you have enough funds to cover your margin requirements. A margin call occurs when the equity of your account – total capital you’ve deposited plus or minus any profits or losses – drops below your total margin requirement. If your equity level falls below 50% of the margin required, your position(s) will be automatically forced closed either – fully or partially – until you have enough margin in your account. Your account balances can be found as follows:

How do I avoid a margin call?

Ensure you’ve deposited more than sufficient funds to cover the margin requirements and withstand market movements

Close some open positions or reduce your position size to decrease your margin requirements

Margin call calculation example:

Say you deposited £10,000 into a CFD account and have five open positions. The margin requirement to maintain these positions is £5500.

If you’re currently at a total loss of £6000, your remaining equity available is £10,000 - £6000 = £4000. This is below the margin requirement of £5500 by £1500 which means your account is in a margin call. If the markets continue to go against you, our systems will automatically trigger an order to close your position(s) if your equity falls below 50% of the margin required (£5500 x 50% = £2750).

Please note: this information is intended as a generic example, and is subject to change at any point. It may not apply in every scenario.

Stop-losses and limits are great tools to manage risk or lock in profits on a spread betting or CFD account. This is done by choosing levels you wish to automatically trigger a closing order of an open position. The most common reason for trades being closed unexpectedly is due to choosing stop or limit levels from the chart while using the incorrect price setting, resulting in the spread not being accounted for.

There are three chart price settings to choose from, as shown below:

We show the mid-price by default, which is the halfway point between the bid and ask price.
It is, however, important to bear in mind the mid-price isn’t used to open or close a position. Instead, the following applies:

Due to market movements, bid and ask prices continuously fluctuate at different rates resulting in the spread widening and narrowing. This means if you’re monitoring a position using the incorrect price chart, your trade may get closed at a level higher or lower than the level shown on the chart because of the spread.

Another factor you need to consider is slippage which is usually caused by rapid price changes in volatile markets, or a lack of liquidity. Standard stop-losses and limits are automatic triggers of a market order, meaning you may receive a better price (positive slippage) or a worse price (negative slippage).

Find out more on how to analyse a trade that has closed and check for slippage.

A corporate action is an event approved by the firm’s board of directors that could bring a material change to a public company and affect its stakeholders. Examples of common corporate action events are stock split is, rights issues, stock dividends, spin-offs and takeovers.

Information on past, ongoing and future corporate action events are usually publically available on the company’s investor relations webpage. We usually send updates via email of any corporate actions that may materially affect any open positions. To ensure no corporate action events are missed, we suggest subscribing to investors relations notification emails if offered by the company or regularly checking their investor relations webpage.

If you have an open position with a company performing a compulsory corporate event (meaning you have no choice in participating) such as a stock split or consolidation, we’ll automatically make any account adjustments for you to reflect any required changes. To do this, we’d close your original position at a level of zero, then open a new position at an adjusted price and size proportional to the ratio of the split/consolidation. Click here to find out more about how different corporate actions affect positions.

For voluntary corporate action events like open offers or rights issues, our corporate actions team will send notification emails to shareholders including the details of the event, as well as your participation options. You may notice a new position reflecting the details of the corporate action such as the name of the company and decision deadline – this temporary position will close automatically after the corporate action has been completed.

Please note: this information is intended as a generic example, and is subject to change at any point. It won’t apply in every scenario.

Forwards and futures contracts are commonly used for trading commodities, indices and forex markets. They have a pre-determined expiry date and rollover time which can be found in the ‘info' section of the deal ticket as shown below:

If you keep a forwards or futures position open through to the expiry date and time, your position will automatically close and any profits or losses will be realised. Assuming you haven’t changed your automatic rollover settings, we’d then automatically open a new position in the next available contract to maintain your exposure to the market. If you don’t want continued exposure to the market and instead would like to exit your position at expiry, then you’ll need to disable automatic rollover from the ‘settings’ tab in your My IG dashboard.

Click here to find out more about automatic rollover instructions.