This may be a dumb question but where IG shows 4 tiers for margin rates on the FTSE 100 index, how exactly are the 'position sizes' calculated? I assumed 'position size' was equivalent to total exposure but that doesn't make sense given the thresholds shown below (from IG's product pages):
Tier
Position size
Margin
1
0 - 200 GBP
5%
2
200 - 1000 GBP
5%
3
1000 - 2000 GBP
10%
4
2000 + GBP
15%
So if I was +£1 long on the FTSE DFB at an opening price of say 5,500, then my initial exposure to the FTSE would be £5,500 right? But then what is my 'position size'?. It can't be £5,500 or I would already be attracting margin of 15% with only a small position. What am I missing here?
