Margin Calls on Demo accounts?

[Snorky]

I am wanting to find out if IG Markets will margin call or stop you out of a position if you fall below the margin maintenance? 

I have been FX trading on the demo account for 3 odd months and hasn't happened yet so unsure of the demo is a true simulation of live CFD trading?

[ArvinIG]

1 hour ago, Snorky said:

I am wanting to find out if IG Markets will margin call or stop you out of a position if you fall below the margin maintenance? 

I have been FX trading on the demo account for 3 odd months and hasn't happened yet so unsure of the demo is a true simulation of live CFD trading?

Hi @Snorky,

The Margin call rules should apply to the Demo account.

https://www.ig.com/au/help-and-support/cfds/margin/what-is-margin-call



It is your responsibility to keep an eye on the margin requirement as we might not be able to reach out if a market drastically change.

I hope that it helps!

All the best - Arvin

[Mikey]

Hi Folks, newbie here.

Just the thread I was looking for...

I'm new to spread betting and I want to figure out the dreaded margin call pit fall before I start using real money, hence I've been dabbling with the demo account.

Yesterday I entered a random trade to try and trigger a margin call trade close (50%) but it doesn't seem to work? I wanted to get the thoughts of the community just to see if my logic works out on what I think should have triggered it...

Funds: £500

Natural Gas: 2644

Size / Long: £1.85

Opening Margin: £489.14

Just taking into account whole numbers on the price, 2644, 2643, 2642 etc. on my calculation the margin call sell off should have occurred at 2498...

Funds: £500

Natural Gas 2498

Size / Long: £1.85

Current Margin: £462.13

P/L: -£270.10

Equity: £229.90

50% of £462.13 = £231.07

Equity has dropped below 50% of margin...

This all happened yesterday... Natural Gas ended up dropping to £2454.50 so shouldn't that trade have closed out?

Thanks in advance for any input.

Cheers

 

[OfentseIG]

4 hours ago, Mikey said:

Hi Folks, newbie here.

Just the thread I was looking for...

I'm new to spread betting and I want to figure out the dreaded margin call pit fall before I start using real money, hence I've been dabbling with the demo account.

Yesterday I entered a random trade to try and trigger a margin call trade close (50%) but it doesn't seem to work? I wanted to get the thoughts of the community just to see if my logic works out on what I think should have triggered it...

Funds: £500

Natural Gas: 2644

Size / Long: £1.85

Opening Margin: £489.14

Just taking into account whole numbers on the price, 2644, 2643, 2642 etc. on my calculation the margin call sell off should have occurred at 2498...

Funds: £500

Natural Gas 2498

Size / Long: £1.85

Current Margin: £462.13

P/L: -£270.10

Equity: £229.90

50% of £462.13 = £231.07

Equity has dropped below 50% of margin...

This all happened yesterday... Natural Gas ended up dropping to £2454.50 so shouldn't that trade have closed out?

Thanks in advance for any input.

Cheers

 

Hi @Mikey

Your calculations are correct. 

Equity: £229.90

50% of £462.13 = £231.07

That means your equity dropping below 50% of margin would put your account on margin call. As soon as your Equity = Margin, the positions close out to bring your available funds to a positive number. 

I believe margin call system on demo accounts has been disabled for administrative purposes.

All the best, 

OfentseIG

[Mikey]

1 hour ago, OfentseIG said:

Hi @Mikey

Your calculations are correct. 

Equity: £229.90

50% of £462.13 = £231.07

That means your equity dropping below 50% of margin would put your account on margin call. As soon as your Equity = Margin, the positions close out to bring your available funds to a positive number. 

I believe margin call system on demo accounts has been disabled for administrative purposes.

All the best, 

OfentseIG

Thanks for coming back to me 😀 

https://www.ig.com/uk/help-and-support/spread-betting-and-cfds/margin/what-is-margin-call

Just reading through the notes, I see you're technically on a margin call at 99%? So to use my example again if the price dropped 10 points to 2634 presumably that's when I'd be on margin call?

P/L: -£18.50

Margin: £487.29

Equity: £481.50

Equity is at 98.8%...

Am I right in saying that would trigger a notification email to say I'm on margin call... Then at 75% (2566)  I would get another warning... Then at 50% (2498) is when my position would be automatically closed?

Or do the email warnings at 99 / 75% only apply to professional accounts?

I'm assuming, being on a standard account, I can stay on margin over 24 hrs and over weekends, so long as I don't get my positions closed by the 50% equity rule?

When you said, "As soon as your Equity = Margin, the positions close out to bring your available funds to a positive number."

I'm assuming you meant Equity = 50% of Margin? Can you pls clarify.

Many thanks again,

Mike

[OfentseIG]

17 hours ago, Mikey said:

Thanks for coming back to me 😀 

https://www.ig.com/uk/help-and-support/spread-betting-and-cfds/margin/what-is-margin-call

Just reading through the notes, I see you're technically on a margin call at 99%? So to use my example again if the price dropped 10 points to 2634 presumably that's when I'd be on margin call?

P/L: -£18.50

Margin: £487.29

Equity: £481.50

Equity is at 98.8%...

Am I right in saying that would trigger a notification email to say I'm on margin call... Then at 75% (2566)  I would get another warning... Then at 50% (2498) is when my position would be automatically closed?

Or do the email warnings at 99 / 75% only apply to professional accounts?

I'm assuming, being on a standard account, I can stay on margin over 24 hrs and over weekends, so long as I don't get my positions closed by the 50% equity rule?

When you said, "As soon as your Equity = Margin, the positions close out to bring your available funds to a positive number."

I'm assuming you meant Equity = 50% of Margin? Can you pls clarify.

Many thanks again,

Mike

Hi @Mikey

The emails sent out when a client's account gets to 99% and 75% apply for all accounts. That is correct, for UK standard/retail accounts, the only rule that applies is the 50% rule so you can stay in margin call for more than 24 hours. As long as your Equity is more than 50% of your margin, we won't close you out. These rules are different for UK professional accounts. 

Positions only close if Equity = 50% of Margin 

For example, if your Margin is  £1000, and your Equity  £500 (due to running losses), the positions will close until Equity > Margin. 

Thanks, OfentseIG