Jump to content
Sign in to follow this  

ESMA leverage caps

Recommended Posts

Guest Dave

Hi

Recently started with IG Index. Wanted to place a bet on a $10 share, at £100 a point. I had deposited $10,000 in my account to fund this bet. Since you can't go into negative equity this limits my risk to losing $10K.

When I tried to place the bet I had an error saying things along the line that the exposure was too high for the margin? 

Consequently I manually adjusted the bet down incrementally until I get to $15 a pip at which point the IG platform allowed me to place the bet. The price moved in my favour by 70 points and I made a profit of $1,050 based on the capped bet of $15 per pip. But I should have made $100 x 70 = $7,000. So the cap cost me $6,000

This cap on leverage is incredibly costly, annoying and I can't see how it is calculated? I know people will say it is there to protect the small investor, but if I calculate what I can afford to lose and bet accordingly I do not need a nanny state limiting my bets.

Question: please can you give an example how to calculate the maximum bet based on a formula and the restrictions of the levarge cap.

Question: What effective ways are there to increase your leverage? i) deposit more money in your account? ii) open an international spread bet account where ESMA regulations don't apply? Etc etc? Please provide details.

Thanks

Dave

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

×
×