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Help Calculating Margin on Bitcoin CFD (Demo account user)


Guest lc123

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Guest lc123

I have been trading shares in my ISA for a couple of years and now want to progress to CFD. Have opened a Demo account to learn for a few months, but after a couple of days I am struggling with the margin calc.

I bought 1 contract at $8234. Margin requirement (I believe) is 20% so initial margin is $1647.

Current value is $7987 so in a loss position. My stop is at $7457 so risk if taken out is $777 (from initial position).

I believe that as the price has reduced my initial margin has also reduced to $1597?

How do I calc the margin maintenance to add to the initial?

Total margin in the account is stated at around £3040 ($3982 at 1.31 FX).

This seems too high but don't understand. What am I missing?

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BTC at 8234 margin is 1647 - yes if it's at 20%

BTC at 7987 margin is 1597 - yes if it's at 20%

"How do I calc the margin maintenance to add to the initial? " << what does this mean? please can you rephrase? do you mean cost of holding overnight? There's some info here on that https://www.ig.com/uk/bitcoin-btc

retail margin has now changed as per ESMA >> https://www.ig.com/uk/help-and-support/spread-betting-and-cfds/fees-and-charges/what-are-igs-bitcoin-spread-bet-product-details which I think is what you're referring to and why it's so high.

 

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Guest lc123

Thanks for the reply. No I wasn't referring to the overnight fees.

My understanding is that there are 2 elements to margin. Firstly the initial margin (deposit) which I understand. Secondly the maintenance margin (also called variation margin). This is in case the market moves against you and are are at risk of incurring losses.

I thought the maintenance margin was calculated as follows.

1. Initial deposit x slippage factor. In this case $1597 x 50% = $799 PLUS

2. Loss incurred if stopped out  of $777 (from first post).

This gives total maintenance of $1576 (799+777) (£1198 at FX 1.31)

 

If I take my initial margin of $1597 and maintenance of $1576 I get $3173 which is £2411 (at 1.31 FX)

My account says margin of £3040 and cant understand what I am missing.

 

 

 

 

 

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Guest PandaFace

BTC is margined at 50% now so that’s why it’s so large. £3040 is about $4000 which is 50% of the BTC ~$8000 price. So it works out.

You also need to be able to cover the loss on an account, yes, but that isn’t in the margin. 

Maybe @JamesIG knows

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Guest PandaFace
39 minutes ago, lc123 said:

Thanks. Didn't realise it was as simple as 50% of current price. Much appreciated. 

Was in the link @cryptotrader posted above with all the other margin requirements :) 

theyve gone up because of esma 

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