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Margin Call clarity,


dynamitedean

Question

Hello there,

 

With 900 plus trades on Oil CFDs' decided to look at spread betting for the tax aspect. Coming from ETORO. I have a question , ETORO is automatically defaulted to a stop loss of 50% editable of course if you want lower than this then of course you need to add money . Reading IG stuff, something about 75% of money invested you get a margin call. 50% it closes like ETORO and any one else would.

 

SO , this 75% bit Im not clear in their notes, is this saying that if the money you have in the game is -25% you get an email from IG ''margin call'', and if you maintain this for 24hrs they ''may '' close your position and if this is maintained over the weekend they may close some or all positions. A lot of maybe's and trip wires here. 

 

I may have got the wrong end of the stick here but -25% sounds a lot to a person trading shares but to us ''oilys'' with leverage  this is semi normal for me  - it is a 1 in 5 event. 

 

thanks to anyone to clear this up.

DD

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Hi @dynamitedean,

Please click here to check our Margin call policy and a short video explaining this.

Example. 

Cash balance = £1000

You place a trade which requires = £200

Equity = Cash balance +/- Profit/loss

In a nutshell we will start closing your positions when the Equity will be less than 50% of Margin (Equity < £100 of margin requirement). In this example you would need to have a running loss of ~ £900.

Cash Balance £1000 - £900 Loss = Equity £100 

I hope this helps,

Jakub

 

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To supplement what is said above, which is very informative, notification occurs even at 99% of margin, which I didn't know:

Will I get notified?

There are two points at which we will aim to notify you that you are on margin call, before we start automatically closing positions.

 

When your equity drops beneath… We will endeavour to…
99% of margin Send you a notification email
75% of margin Send you a second notification email*
50% of margin Start automatically closing positions

 

*If your equity level moves below 75% multiple times on a single margin call, we won’t send you multiple notifications.

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