Maintance Margin for spread betting

[Nightwing]

I am trying to calculate how much margin I would need to raise if a trade were go against me,   For instance if opened a buy order of Amazon at 9317 @£1.5 a point the margin needed would be 9317*1.5*20% = 2795.1

 

If the stock price decreased to 9000, I would be sitting on a losss of 1.5*317=475.5.  Can someone tell me how much margin I will have?  It  doesn't make sense to me?

[OfentseIG]

27 minutes ago, Nightwing said:

Hi @OfentseIG

 

Does this mean at " long on 100 shares of company ABC" the share price would need to fall 2 points for a loss of $200?  So as well as having to cover $200 loss and would need to cover loss of $200 from my deposit?

 

In total $40  for a 2 point loss?

 

 

Hi @Nightwing 

Assuming that you are trading $1 pp, it would have to fall by $2 (equivalent to 200 points on the spread bet account) to get a loss of $200. 

The formula for P/L is:

P/L = (Closing Price - Opening Price) x size 

Therefore, 

$200 = (X - 500) x 100 shares     

Since you are on the spread bet account, and 100 shares is equivalent to $1pp and $500 in points is 50,000 then the formula would be:

$200 = (X - 50000) x $1    

All the best, OfentseIG

[OfentseIG]

18 hours ago, Nightwing said:

I am trying to calculate how much margin I would need to raise if a trade were go against me,   For instance if opened a buy order of Amazon at 9317 @£1.5 a point the margin needed would be 9317*1.5*20% = 2795.1

 

If the stock price decreased to 9000, I would be sitting on a losss of 1.5*317=475.5.  Can someone tell me how much margin I will have?  It  doesn't make sense to me?

Hi @Nightwing

I can give you another example from our website to make things easier. Maintenance Margin looks at the available funds in your account not locked in the trade. 

Let’s say you want to go long on 100 shares of company ABC, which are currently trading at $500. This means that the full value of your position is $50,000. However, because you’re trading on leverage, you only need to put up an initial deposit of 20%. Your margin deposit is therefore $10,000 ($50,000 x 20%).

You have $10,000 in your account when you decide to place the trade, which is enough to cover your margin requirement. But if the money in your account falls – as a result of your position losing money – you would be placed on margin call immediately. This is because you do not have any additional funds with which to cover your losses.

To keep your position open, you would need to top up your account to get your balance above $10,000. The amount of money you’d be required to deposit is your maintenance margin. If your balance fell to $9800, for example, you’d need to add $200 to your account.

All the best, OfentseIG

[Nightwing]

Hi @OfentseIG

 

Does this mean at " long on 100 shares of company ABC" the share price would need to fall 2 points for a loss of $200?  So as well as having to cover $200 loss and would need to cover loss of $200 from my deposit?

 

In total $40  for a 2 point loss?

 

 

[Nightwing]

meant in total $400 not $40

[Nightwing]

So what happens to the inital margin and amount available?    Does this mean the margin increase as the position moves against your position?  If so by how much and when this increase/decrease happen?

[Nightwing]

So what happens to the inital margin and amount available?    Does this mean the margin increase as the position moves against your position?  If so by how much and when this increase/decrease happen - is there a treshold @OfentseIG?  Also much of the margin/deposit is lost?

Edited November 23, 2022 by Nightwing
additional question