Jump to content
Sign in to follow this  

Margin collected... on working orders?!

Recommended Posts

I am using demo spread betting account and I have opened a bunch of limit/stop working orders against FTSE100 futures contract.

I have set them to be good until end of week, and they are within +/- 500pts of the current trading level.

Despite none of them triggered, my balance overview already shows "Margin incurred" which to me seems odd, given that the working orders have not be executed yet. Conceivably, if one order out 100 is executed I can end up in margin call situation - what will happen then? Will IG be closing open position or cancelling working orders? Is it normal for margin to be charged on working orders?

Share this post


Link to post

Hi 

 

Thanks for your question.

 

Yes, it is normal for margin to be used on working orders. This is due to the fact that if the order gets filled, you will need this cash available to cover the margin. If you have open positions and working orders, all using up margin, and end up into a margin call, then our standard procedure would be to delete the working orders first, in an attempt to release funds without needing to adjust any live positions.

 

If we did not apply any margin to the working order, it would be possible to then use up all available funds in your account on open positions, whilst also having working orders waiting to be filled. If you then get filled on the working orders this could then put your account straight into a margin call situation, and as you open new positions with the working order, your other positions get closed off due to the margin call.

 

In order to avoid this situation, by using funds as margin for working orders, you know what your true available funds figure is, taking into account any potential order fills.

 

I hope this explains things and if you have any further questions please get in touch.

 

Regards,

 

Simon

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  

  • Member Statistics

    • Total Topics
      13,065
    • Total Posts
      66,531
    • Total Members
      88,756
    Newest Member
    Britthen
    Joined 23/11/20 17:03
  • Posts

    • Good article (new) on strategy planning and testing from Steve Burns. https://www.newtraderu.com/2020/10/25/how-to-create-backtest-and-optimize-a-trading-strategy/ "A trading strategy is the process used to enter and exit positions in a market based on quantified signals on when to buy and sell. A trading strategy will have trading plan to express a methodology that defines a trader’s return goals, risk tolerance, and time frame. A successful strategy should have an edge expressed in how trades are entered and managed to maximize gains and minimize losses."
    • (not the cost of Covid-19 but the cost of the govt's disastrous response to a virus that's no more deadly than the common flu) The REAL cost of Covid-19: RUTH SUNDERLAND's terrifying dossier exploring the full economic damage will make you ask... can we afford to keep the brakes on Britain? National debt more than £2 trillion, equivalent of year’s output by entire country  Borrowing from April to October was £170 billion higher than period in 2019  Bank of England believes unemployment rate will to peak at around 7.75 per cent https://www.dailymail.co.uk/news/article-8975765/The-true-cost-Covid-19-Read-RUTH-SUNDERLANDs-terrifying-dossier-economic-damage.html?ito=amp_twitter_share-top
    • Dax and Dow M15;
×
×