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Margin rates could increase Great stop over trading


Guest oilfxpro

Question

Guest oilfxpro

Margin rates could increase to 5% on major indices and 20% on equities

 

 

The European Securities and Markets Authority (ESMA) is considering some proposals which are highly likely to affect your trading. You have until 5 February to respond to ESMA, and we would strongly encourage you to do so. ESMA does listen to the views of traders and will shape its final decision according to the feedback it receives.

What are the proposals?

ESMA has come out with a number of proposals – aimed at retail clients only – to try to increase conduct standards across the industry. We largely support these changes, but feel the leverage restrictions are disproportionate and too restrictive. ESMA’s leverage proposals include:

30:1 leverage on major currency pairs = 3.33% margin

20:1 leverage on major indices = 5% margin

10:1 leverage on commodities (excluding gold) = 10% margin

5:1 leverage on equities = 20% margin

These restrictions would apply to both spread betting and CFD trading. You can read all the proposals in full here.

How will the proposals affect your trading?

As you can see from the table, these proposals would severely increase the margin required to deal:

Spread betting:

Market – £10/point

Current margin

ESMA proposed margin

EUR/USD

£611

£4073

Germany 30

£660

£6600

Oil – Brent Crude

£1035

£6900

Apple

£8950

£32,800

CFD:

Market

Size

Current margin

ESMA proposed margin

EUR/USD

1 standard lot

$611

$4073

Germany 30

1 standard lot

€1,650

€16,500

Oil – Brent Crude

1 standard lot

$1,035

$6900

Apple

1000 shares

$8,950

$35,800

 

 

It is good for skied, sensible and professional trader's , don't contest it at all.This will clear out the stragglers. It will help stop immediate revenge trades and impulsive reactive trading.

 

 

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