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Funds required with guaranteed stop


OuluChris

Question

Hi,

Assume I want buy a product that has a 20% deposit factor. I buy the equivalent of £500 so my margin is £100 (I'm ignoring the additional percentage applied to gauranteed stops to make the numbers easy to add up).

I set my guaranteed stop 20% below the current price.

If I have exactly £100 in my account the position opens but leaves my account with £0 available. If the price then falls 10% I would (in theory, ignoring margin calls) have -£50 available.

So, my question is, is the "apparent" funds required to be in my account actually the deposit factor PLUS the losses to the position of the stop loss? In the example above that would require £200 to be deposited.

Thanks,

 

Chris

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