Margin and Leverage

  • All of the information below is also available in our Margin Guide. 

    Q1) What is a Margin Requirement?

    Margin Requirement is the deposit required to maintain each open trade on your account. To open a trade you must have sufficient trading resources on your account (cash balance + profit/loss from open trades) to cover the Margin Requirement applicable to that trade. Sufficient net equity must then be maintained in order to keep that trade open.

    You can monitor the level of cover you have for your open positions using the Margin Level Indicator on our Trading Platform. Your open positions may be subject to closure under our Margin Close Out policy (see Question 7) if your net equity falls below your Margin Requirement.

    Q2) How can I calculate Margin Requirements?

    Margin Requirement is calculated as a percentage of the position. This percentage (Margin Factor) varies so first you must find the Margin Factor for your specific market. These are listed within the ‘Market Information’ icon which is located next to the market's Trade and Order buttons on our Trading Platform window.

    Once you know the applicable Margin Factor, your margin is calculated as follows:

    • If the Margin Factor is expressed as a number: Margin Requirement = Quantity x Margin Factor.

    For example, if you want to open a Wall Street (Margin Factor = 400) position as a spread bet with a £10 stake.
    Margin Requirement = £10 x 400 = £4,000.

    • If the Margin Factor is expressed as a percentage:
      Margin Requirement = (Quantity x Our Price) x Margin Factor.

    For example, if you want to buy 5,000 Vodafone CFDs (Margin Factor = 10%) and Our Offer Price is 1.49.
    Margin Requirement = (5,000 x 1.49) x 10% = £745.

    Please note: For some markets such as gold, silver, bonds and options the margin calculations may differ from the examples above. More examples can be found in our Margin Guide.

    Q3) How can I reduce my Margin Requirement?

    Your Margin Requirement may be reduced for a particular trade if you have a Stop Loss Order in place.

    Q4) How do Stop Loss Orders affect my Margin Requirement?

    Certain markets are ‘Orders Aware’ and hence offer a percentage reduction on Margin Factor if you have a Stop Loss Order in place. Information regarding whether or not this applies to an individual market, as well as any reduction in Margin Factor offered, is available within the Market Information sheets on the Trading Platform. 

    If you have a Stop Loss Order in place and the market is Orders Aware, then your Margin Requirement will be the higher of:

    • Standard Margin Requirement multiplied by the Orders Aware Margining minimum percentage. 

    And

    • Difference between the specified Stop Loss Order price and Our Price at the time, multiplied by Quantity.   

    Q5) How do Guaranteed Stop Loss Orders affect my Margin Requirement?  

    If you have a Guaranteed Stop Loss Order then your Margin Requirement will be the lower of:

    • a) For trades when the Margin Factor is expressed as a number:
      Quantity x Margin Factor

    For trades when the Margin Factor is expressed as a percentage:
    Quantity x Our Price x Margin Factor

    And

    • b) Difference between the specified Guaranteed Stop Loss Order price and Our Price at the time, multiplied by quantity.

    Q6) How do I find out the Margin Requirement for an individual stock?

    These are listed within Market Information icon, which is next to the market's trade and order buttons on our trading platform.

    Q7) What is Margin Close Out and how do I find my Margin Close Out level?

    If your Margin Level is at or below the Margin Close Out Level, we may close all or any of your Open Positions in markets that are open immediately and without notice at the next available Our Price. You can find your Margin Close Out Level in the Key Service Features document available in the Help section of our trading platform

    We strongly recommend that you monitor your margin level carefully as you should not expect to receive a margin call or warning prior to closure. The Margin Level Indicator on the Trading Platform makes this very easy.

    To find out more about the Margin Close Out Level, please refer to Section 11 of our Terms and Policies.

    Q8) Who is responsible for monitoring my Margin?

    You are responsible for monitoring your Margin level, we recommend that you actively do this as you should not expect to receive a margin call or warning prior to closure. The Margin Level Indicator on the trading platform makes this very easy.

    Q9) What is the Margin Level Indicator?

    This is located in the upper left corner of the Trading Platform and represents the level of cover you have associated with your open positions. It displays one of the three scenarios listed below:

       

    • Scenario 1: If your Margin Level Indicator is greater than 200%, this will show as > 200%. This means that you have more than double the amount of funds needed to keep your positions open.
    • Scenario 2: If your Margin Level falls below 200%, the margin level will display a percentage between 80% and 200%, depending on the ratio.
    • Scenario 3: Should your Margin Level fall below 80%, you do not have enough funds (including open positions’ profits or losses) in your account to cover your Total Margin. Consequently, depending on your Margin Close Out level, automatic closure of your open positions may be triggered. A warning symbol will be displayed next to the Margin Level if it drops below 80% 

    Q10) How does the Step Margin feature work?

    Step Margin is the process by which the amount of initial margin charged per trade may increase depending on the size of your spread bet or CFD trade. As the size of your total position in a particular market increases, so may the amount of initial margin charged for any additional trades [within the same market].

    These occur at specified step margin levels.

    To find out more about the Step Margin levels for a particular market, refer to the Market Information area within the Trading Platform.

    You can also view our example below using the indicative step margin levels for Company ABC:

     

    Spread bet stake size  CFD stake size  Initial Step Margin 
    £0-£10 0-1,000 5%
    £10-£100 1,000-10,000 10%
    £100-£500 10,000-50,000 15%
    £500+ 50,000+ 20%

     

    Therefore, if you were to place a Buy Spread Bet of £5 per point, you would be charged an initial margin of 5%. If you were to place an additional Buy Spread Bet of £12 per point in the same market, your total stake size in that market is now £17 per point. 

    This means that for your total Spread Bet position in this market, the first £10 per point is being charged at the initial step margin of 5%; however the remaining £7 per point is charged at the second step margin of 10%.

    Q11) Does Step Margin affect my ‘Orders Aware’ margining?

    Through certain markets, ‘Orders Aware’ margining is available. However, this can only be utilised on the first initial Step Margin. The amount of initial margin charged for any additional trades, on the same market, will not feature ‘Orders Aware’ margining. Information regarding which markets this affects can be found within the Market Information tab on the Trading Platform.