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Guaranteed Stop Margin


IGMan

Question

A real backward step introducing new margin calculations for guaranteed stops. If I do £5 a point on the Dow with a guaranteed stop of 20 the margin was always 100 plus the premium of 1.8 giving £109. Now it is £548 to place the same trade.

 

This really makes it uncompetitive and a very bad move from IG.

 

Disappointed that we are faced with another blocker.

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9 answers to this question

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Hi 

 

We appreciate your comments and this will be submitted to the feedback team. 

 

To provide you with some further information, we have made these changes due to the current situation we are facing with tougher regulations in the leveraged environment. In your example if we use the original Guaranteed stop margin, then the leverage on the position is approximately 1000-1. 

 

Unfortunately, we will no longer be allowing the minimum margin requirements by using guaranteed stops, we are effectively enforcing minimum leverage restrictions. 

 

Thanks.

Chris

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Sorry for letting this one slip though the net and not getting back to you. You may have had your question answered via our Helpdesk, but I just wanted to follow up on this here. 

 

I do appreciate that the value required to open a position may have increased, however what we are specifically focusing on here is the leverage, rather than the financial risk on a trade. 

As per the previous question if you were to have a GStop 20 points away on a Wall Street trade (assuming it's trading at 21,800) you would have a leverage of 1090:1 whilst without the GStop you would be margined at 200:1 which is obviously less. It maybe easier to show this via a calculation below. 

 

20 pt stop level / 21,800 market price = 0.0009174

1 / 0.0009174 to bring this into a leverage value = 1090

Therefore 1090:1

(alternatively you can just do notional divided by deposit (£5 x 21,800) / (£5 x 20 points) which gives the same value

 

This leverage value what we are focusing on bringing in line, rather than the financial risk on the position. I hope this clarifies things. 

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Sadly, this no longer works for me. A Guaranteed Stop should be what it implies and we pay the premium to have GS's. Having to deposit £ 500 for a £5 with a 6 point stop makes no sense whatsoever.

 

My spreadbetting days are numbered as I don't have mountains of cash to deposit into IG's bank account.

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Hi,

 

In USD/CHF, i see the Stop Margin at 457 points, compared to other Currency Pairs being between 4-8 points. When i try USD/CHF in Demo account, it shows normal 4 points. Why is there so much of difference between Demo Account and Real money account?

 

Thanks,

Sanjay.

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