Margin Increase

[cate]

Hi,

 

I haven't had an email from IG, but notice when I open a dealing ticket that the margin requirements for a FTSE mini contract has gone from about £70 to about £240. I can understand why given the pick up in volatility, but was surprised to see it happen without warning.

 

Does anyone know how long we can expect it to last?

 

Thanks!

Cate

[cate]

James, just a quick question about the margin when you open a new position. If I have a long position and I take out an equal size short as a temporary "hedge" rather than closing the long, would I be hit by the margin increase? I mean in the past if a long needed £70 margin, when you added a short which also needed £70 margin there was no extra required because the pair netted out. In fact the total margin for the pair was reduced to about £10. In this case, if I'm looking at £70 margin on my existing position and £240 margin on the "hedging" new one, what happens to the margin requirement for the pair?

 

I know this is a messy way to trade, but I find it helpful sometimes to take a short term trade in the opposite direction to my main position, and the platform has always allowed it.

 

Thanks! 

[Guest Yo123]

When margin requirements increase will this increase daily interest payments for overnight positions? Can anyone answer

[JamesIG]

Hi  - thanks for your question. The euro and US indices should have been reverted back to the 0.5% starting rate as of yesterday at about 3pm. If this isn't the case on your account please give us a call. 

[mark27]

Hi

 

I have noticed that on the market data page, germany30 has returned to a margin of 0.5%  but it is still on 1% if I make a trade.Can you tell me if it is going to stay on 1% or revert back 

 

Thnaks 

Mark

[xnox]

As an IG client, I expect an email or notification of a change in margin to open new orders. In advance, if possible, or at least post-factum. Is there a feed for these changes? RSS / blogs / twitter / special forum thread / whatever? An answer to a community question is not acceptable way to notify that this is legitimate change, rather than a platform bug.

[cate]

Thanks !

[JamesIG]

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wrote:

When set up your pending order on the day before the margin increase and the trend hit it and you do not even have a clue for any margin changes on the hours after 12 midnight how you gonna count this ?

Do not want to argue

just this time IG were wrong: CON'T INCREASE THE MARGIN WITHOUT NOTE !!!

---

Hi  - if you set a working order and are margined at 0.5%, we raise margins as we have done today, THEN your original order is triggered... your open position will be margined at the original value of 0.5%.

[JamesIG]

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wrote:

James, just a quick question about the margin when you open a new position. If I have a long position and I take out an equal size short as a temporary "hedge" rather than closing the long, would I be hit by the margin increase? I mean in the past if a long needed £70 margin, when you added a short which also needed £70 margin there was no extra required because the pair netted out. In fact the total margin for the pair was reduced to about £10. In this case, if I'm looking at £70 margin on my existing position and £240 margin on the "hedging" new one, what happens to the margin requirement for the pair?

 

---

Hi  - apologies about the late reply. 

 

If you have a 'force open' to have a long and short, then you will be margined at 10% of each leg. So if the original margin was 70 and the second 240 on the hedge, you'd be margined at £7 and £24. I hope this clarifies things. 

[tosh]

When set up your pending order on the day before the margin increase and the trend hit it and you do not even have a clue for any margin changes on the hours after 12 midnight how you gonna count this ?

Do not want to argue

just this time IG were wrong: CON'T INCREASE THE MARGIN WITHOUT NOTE !!!

[JamesIG]

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wrote:

oilfxpro

can you please state, where have you seen definition for high volatility or have you ever signed under any

,,Term and cond." that if Dow or S&P500 lost 1600pips and 4% of the day session , on the next morning you leverage going to decrease resp. margin will increase ?

Because i am sure no one have ever seen such stuffs

---

Hi - this will be in the terms and conditions. Furthermore this has only effected new positions which you choose to open and wouldn't have effected the margin requirements on any additional positions. You will be able to see margin requirements on every deal ticket when you fill it in, and there is no obligation to open a position with these reduced leverage settings. These are in place specifically to reduce the likelihood of a client falling into a negative equity or debt. 

[tosh]

oilfxpro

can you please state, where have you seen definition for high volatility or have you ever signed under any

,,Term and cond." that if Dow or S&P500 lost 1600pips and 4% of the day session , on the next morning you leverage going to decrease resp. margin will increase ?

Because i am sure no one have ever seen such stuffs

[JamesIG]

If you are ever trying to work out how to manually calculate margin requirements on an asset please make sure you check out the IG.com website where we have a full overview and worked example of how to calculate. For example on indices you can check here, however I have also included it below. 

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wrote:

Can you give an example of differences in margin , please  on GBP 10  dax daily?

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Well, if DAX is quoted at 12,500 and you're looking at £10/pt then notional value would be £125,000. Assuming no stop...

 

0.5 % is £625

1.5 % is £1,875

 

[Guest oilfxpro]

Traders should not be over leveraging , allows allow for margin increases in time of high volatility/extreme events.Margin increase is normal.

[tosh]

It is unlikely IG not to worn about the new leverage

but it happened to me too this morning

Some time just sorry does not works when losing money because of ,,we miss to tell you "or some like that....

 

 

[Guest oilfxpro]

Can you give an example of differences in margin , please  on GBP 10  dax daily?

[JamesIG]

Hi all - just to let you know that we've decreased the leverage on new index positions based on the recent volatility in the market. To confirm this will increase the deposit required to open a new position (but won't effect any old or existing positions). Margin have been increased on indices by 1% (i.e. DAX has gone from 0.5% to 1.5%). I shall let you know when this has reverted.