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Margin with stop loss


angusmck

Question

When using a stop loss the margin should generally be reduced, but the margin shown on the platform stays the same as when there is no stop loss in place.

For example, if placing a spread bet on the FTSE 250 at price of 17000, for £1 per pip movement the margin is £1 x 17000 x 10% = £1700

If adding a stop loss at 100 points away (so 16900), with slippage factor of 20% the margin should be (1 x 17000 x 10% x 20%) + (1 x 100) = £340 + £100 = £440. But when I add the stop loss the margin stays at £1700.

Can anybody shed some light on this?

Thanks

Angus

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2 hours ago, angusmck said:

When using a stop loss the margin should generally be reduced, but the margin shown on the platform stays the same as when there is no stop loss in place.

For example, if placing a spread bet on the FTSE 250 at price of 17000, for £1 per pip movement the margin is £1 x 17000 x 10% = £1700

If adding a stop loss at 100 points away (so 16900), with slippage factor of 20% the margin should be (1 x 17000 x 10% x 20%) + (1 x 100) = £340 + £100 = £440. But when I add the stop loss the margin stays at £1700.

Can anybody shed some light on this?

Thanks

Angus

Hi, yes that was the first interpretation of ESMAs new regulations back in 2018 but has since changed to be that only guaranteed stops not normal stops can be considered for the margin calculation;

https://www.ig.com/uk/charges/margin   see pop up 'how margin is caculated'.

image.png.4d69ffd685a3a784e7c0f9adf20f9ffe.png

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