If the capital in your account isn’t enough to keep your trades open, you’ll be put on margin call.
Here’s a guide to what happens next.
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.
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 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 0800 409 6789 for information on what to do.
Standard trading accounts will be triggered for position closure when your equity drops beneath 50% of your margin requirement.
For professional accounts, there are typically four 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.
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, if you are a professional client, 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.
There are two points at which we will aim to notify you that you are on margin call, before we start automatically closing positions.
|When your equity drops beneath…||We will endeavour to…|
|99% of margin||Send you a notification email|
|75% of margin||Send you a second notification email*|
|50% of margin||Start automatically closing positions|
*If your equity level moves below 75% multiple times on a single margin call, we won’t send you multiple notifications.
However, it is important to note that markets move fast, which may mean that we are unable to contact you before your positions get closed. If your equity drops from above 100% of margin to below 50% in less than five seconds, for instance, we will not be able to contact you.
Please keep in mind that you’ll only be able to use our collateral service if you have qualified for a professional account.
If you’re using the contents of your share portfolio as collateral to cover your margin requirements in your leveraged account, then we can allow equity to drop to -50% of your collateral level before we start closing positions. We can’t guarantee that level, though, so you may find positions are closed before or after your equity reaches -50%.
If you remain on margin call for 24 hours then positions will still be automatically closed, and your positions will still be at increased risk on a Friday.
It’s always important to remember that our margin policy is not a guarantee against your capital running into negative territory. For this reason, it’s important to use tools like guaranteed stops to ensure that your positions are closed at the level you specify. A guaranteed stop will incur a charge if it is triggered.
Find out more about risk management.
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