Managing your risk
CFDs come with a unique set of risks. Negative balance protection, which is available on your offshore account only, keeps your account secure against debt1 – take control of further risk using our tools, and ensure you’re well-informed with our range of educational resources.
Call 010 500 8624 or email newaccounts.za@ig.com to talk about opening a trading account. We're around 24 hours a day from 9am Saturday to 11pm Friday.
Contact us: 0105008624
What are the risks?
The risk |
Why it happens |
Ways we help |
| Losing more than your deposit on the trade. | CFDs are leveraged meaning you only need to put up a fraction of your trade’s value to open it. So you could lose – or win – much more than your initial deposit. | You can mitigate risk and lock in profits by setting an automatic stop or limit, to define the level you'd like your trade closed at. Find out more about stops and limits |
| Losing more than the money on your account. | Sometimes your positions may close and leave you with a negative cash balance on your account – putting you in debt to us. | Thanks to negative balance protection which ony applies to offshore accounts, we bring negative offshore accounts back to zero at no cost to you.1 |
| Having your positions closed unexpectedly, resulting in you losing money. | You need a certain amount of money in your account to keep your trades open. This is called margin, and if your account balance doesn’t cover our margin requirements we may close your positions for you. | Keep an eye on your always-visible running balances in our platform or app, and add more funds if they’re needed. Find out more about balance snapshots |
| Sudden or larger-than-expected losses (or gains). | Markets can be volatile, moving very quickly and unexpectedly in reaction to announcements, events or trader behaviour. | As well as setting stops, you can also be notified of significant movement by setting a price or distance alert, giving you the choice of whether or not to react. Find out more about alerts |
| Having an order (an instruction you give us, to open or close a trade for you when the market hits a certain level) filled at a different level to the one you requested. | When a market moves a long way in an instant – or ‘gaps’ – any orders you have placed may be filled at a worse (or better) level than the one you requested. This is called slippage. | Use guaranteed stops for watertight protection against slippage on orders to close. They're free to place, with a small premium payable only if your stop is triggered. Find out more about guaranteed stops |
Protect yourself in our platform
Protect against adverse movements for free
Set a stop-loss to close your position automatically if the market moves against you. There’s no trigger charge, but no guarantee of protection against slippage – so your position could be closed out at a worse level if the market gaps.
Choose exactly where your trade closes
Attach a guaranteed stop to your position, and it’ll always be closed out at exactly the price you specified. What’s more, you’ll only pay for your stop if it’s triggered. If this happens, our guaranteed stop premiums still offer the best value in the market for most major indices and FX pairs.
Benefit from negative balance protection
If your offshore account goes into a negative balance, we will bring it back to zero at no cost to you.1
Take profit automatically
Set a limit order in line with your profit target, and we’ll close your position for you when the price hits your chosen level.
Don’t miss out on profits
Place a trailing stop when you open your trade and it will move with your profit. If the market turns, your position will close out at your trailing stop’s new level. So you can lock in profits without the need to monitor your position and adjust your stop.
Like regular stop-losses, trailing stops don’t protect against slippage.
Stay on top of market movement
Set price and price change alerts, and we’ll notify you by text or email when a market reaches your specified price, percentage or points change.
Our award-winning apps mean you can react to these opportunities immediately, wherever you are.
Always know your profit and loss
Keep an eye on the always-visible balance snapshot in our platform, and react quickly if the market moves against you. You can deal out almost instantly to protect a profit or minimise a loss.
Protect against adverse movements for free
Set a stop-loss to close your position automatically if the market moves against you. There’s no trigger charge, but no guarantee of protection against slippage – so your position could be closed out at a worse level if the market gaps.
Don’t miss out on profits
Place a trailing stop when you open your trade and it will move with your profit. If the market turns, your position will close out at your trailing stop’s new level. So you can lock in profits without the need to monitor your position and adjust your stop.
Like regular stop-losses, trailing stops don’t protect against slippage.
Choose exactly where your trade closes
Attach a guaranteed stop to your position, and it’ll always be closed out at exactly the price you specified. What’s more, you’ll only pay for your stop if it’s triggered. If this happens, our guaranteed stop premiums still offer the best value in the market for most major indices and FX pairs.
Stay on top of market movement
Set price and price change alerts, and we’ll notify you by text or email when a market reaches your specified price, percentage or points change.
Benefit from negative balance protection
If your offshore account goes into a negative balance, we will bring it back to zero at no cost to you.1
Always know your profit and loss
Keep an eye on the always-visible balance snapshot in our platform, and react quickly if the market moves against you, and deal out almost instantly to protect a profit or minimise a loss.
Take profit automatically
Set a limit order in line with your profit target, and we’ll close your position for you when the price hits your chosen level.
Practise trading risk-free
Open a free demo account to practise trading on £10,000 and R1,000,000 in virtual funds, without any risk to your capital or obligation to open a full account.
Other ways we help
Built-in risk protection
To help protect you from excessive losses, we’ll sometimes close your positions if your account equity (cash balance +/- running profit/loss) doesn’t cover your margin requirement. This is known as being on margin call. However, we can’t always apply this protection and you shouldn’t rely on us doing so. It’s sensible to maintain adequate funds in your trading account to avoid potentially being closed out.
If your offshore account balance does fall below zero for any reason, we’ll bring it back up to zero at no cost to you.1
Watch the video to find out more about margin call.
Trade with reduced minimums
Build your confidence while you get used to trading with us, by dealing with reduced minimum deal sizes for a limited time when you open an account. We offer reduced minimums on CFD trades.
Learn to combat risk
Become a better trader, and learn more about managing risk, by working through free interactive courses on IG Academy, as well as live webinars.
FAQs
How does a stop-loss order work?
When you place a stop-loss order, sometimes referred to simply as a ‘stop order’, you’re instructing your broker to execute a trade on your behalf at a less favourable level than the current market price.
You’ll usually do this to limit your losses on a position, in the event that the market moves against you. Set your stop-loss at a certain level, and your broker will close your position for you when the market hits that level – so you don’t need to watch the markets constantly.
It’s worth remembering that stop-loss orders do not protect against slippage resulting from markets ‘gapping’, or moving a large distance in a split second due to unforeseen external influences. You can ensure your trade is executed at exactly the level specified by using a guaranteed stop. With IG they’re free to place, and carry a small premium if triggered.
If you’re placing a stop-loss order on a long trade – a trade where you’ve bought a market in the expectation that its price will go up – your stop-loss order will be an instruction to sell at a worse price than the one you opened your trade at. Conversely, a stop-loss order on a short trade (where you’re selling a market) is an instruction to buy at a worse price than you opened at.
Where you place your stop-loss depends on how much risk you’re prepared to take on. Watch our video to learn three popular strategies for deciding stop placement, and using them to manage your risk.
What's meant by 'risk' in trading?
In trading, ‘risk’ refers to the possibility of your choices not resulting in the outcome that you expected. This can take the form of a trade not performing as you’d thought it would, meaning that you make less – or indeed, lose more – than originally anticipated.
Trading risk comes in a range of forms. The most common is ‘market risk’, the general risk that your trades might not perform based on unfavourable price movements – affected by a range of external factors like recessions, political unrest and so on.
Traders are usually prepared to take on some degree of risk in order to participate in the markets, and hopefully make their trading profitable over time. How much trading risk they’ll take on depends on their strategy, and the risk-reward ratio they’ve set for themselves.
It’s therefore important to recognise how much capital you can stand to risk, both on a per-trade basis and as a whole over time.
You can learn more about balancing risk and reward to create an effective trading strategy in IG Academy, our online hub for learning resources.
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Protect your capital when trading on our range of powerful platforms and apps.
1 Negative balance protection applies to trading-related debt on your offshore account only and is not available to professional traders.
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