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Margin when P&L is locked problem


geasssos

Question

Hi, 

I am having some trouble with understanding the Margin for my CFD account. 

If I long and short the same currency for same amount (lock the P&L), the used margin should be less than if I long the same amount only. This is true for my demo account but not for my Live account (the used margin is doubled if lock the P&L) Why is that?

 

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You're up against stupid ESMA and FCA rules that are supposed to protect the retail trader but actually hinder them and cause greater losses by forcing you out of positions you could have ridden if your margin wasn't massively used up on both sides of a net neutral low-risk trade with a maximum possible loss rather than an open-ended one. 

 

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i think the FCA recognise the fact that traders can have a collateral when leverage/margins are given, and its just that IG does not implement it for retail traders. keeping your margins on both sides of trade is happy days risk management for the broker. 

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