Frequently asked questions - CFD Trading

Can't find an answer to your question here? Please feel free to contact us.

Your account

Q1: What do I do if my personal details change?

If your address or other details change, please login to your account and update your details online.  Alternatively you can contact us.

Q2: How do I transfer funds into my account?

You can transfer funds into your account using the following methods:

• Using a credit card: We accept Visa or MasterCard. Firstly, you need to register a credit card with us by calling customer services. Once you have registered a card with us you will then be able to deposit funds online. Once your credit card has been registered by phone you can make a secure payment online via the Internet Trading Platform, alternatively you can always speak to our Client Services Team and make payments by phone. All phone payments are securely processed by CyberSource.
• By cheque or money order: Send a cheque or money order made payable to City Index:

City Index
GPO Box 5464
Sydney NSW 2001

To assist with processing, please ensure your Account Number is written on the reverse side of the cheque. Please note that cheques can take up to 10 business days to clear.

• By electronic fund transfer: Please use the following details.

• Using BPAY

		Biller Code: 19513	Reference: Your 10-digit City Index CRN as appears on your Statement*

* For initial deposits, please contact Client Services on 1800 354 182 or 61 2 9270 3682 to obtain your Customer Reference Number (CRN).

Q3: How do I transfer funds out of my account?

In order to transfer funds out of your account, you will need to call customer services.

To protect our clients from identity fraud, we will only return funds to clients via the same method they were received.

For example, if you deposit funds into your account via your debit card, funds will be returned to you via the same debit card, which must be registered on your account.

Trading CFDs

Q4: What does trading as principal mean?

In conventional share trading clients will deal through a broker who places their trade with a range of market makers. The stockbroker is acting as an agent, searching out the best price for their client.  This is not the case with CFD trading. In this instance you are dealing with the provider and are contracting directly with them.

Q5: How long can I hold a CFD for?

There is no expiry for a CFD trade, but please remember that if you hold a long position you will be charged overnight funding.

Orders

Q6: How do I place a guaranteed stop loss order?

You can leave a guaranteed stop when you open your position, either online or by phone.  You will be charged a small premium for placing your guaranteed stop.

Q7: What is a linked stop loss order?

A linked stop loss is a stop order that is put in place to limit the risk of a market moving against a current open position. If the open position is closed, either by an opposing trade or order activation, then the linked stop loss order ceases to exist.

Q8: What is a linked limit order?

A linked limit is a limit order that is linked to an open position.  If that open position becomes closed for any reason then the linked limit order will cease to exist. 

Q9: Can I amend stop loss orders when the market is closed?

Yes. You are not able, however, to amend Guaranteed Stop Loss orders while the market is closed.

Q10: Can I amend/cancel orders and if so, how?

You can amend or cancel an Active Order by entering the 'Active Order' tab on the trading platform.  Please note you can amend or cancel a Limit Order outside of trading hours, but not stop loss orders.

Q11: Are orders active when markets are closed?

Orders are only monitored and executed during City Index trading hours (not necessarily underlying market trading hours).  In the case where a market continues to trade outside of City Index hours we will execute any triggered orders at the first available price in our opening hours which may be different to the order level. However, if the market has moved beyond the trigger level and returned by the time that City Index re-opens, the order may not be executed.

Margins

Q12: What is Margin Requirement?

Margin Requirement is the deposit required in respect of each open bet on your account. When you place a trade you must have enough funds to cover the Margin Requirement applicable to that trade. You must also maintain the Margin Requirement deposit level above any profits/losses on your account.

Q13: How do I calculate Margin Requirements?

Margin Requirement is calculated as a percentage of the position.  Please make sure you are aware of the Margin Requirement applicable before you open each trade, these can be found in the CFD Market Information Sheets (PDF).

Q14: How do I find out what the Margin Requirement is on an individual stock?

Full details of Margin Requirement and charges can be found in the CFD Market Information Sheets (PDF). If you are unsure of Margin Requirements for a particular market/stock you should always call the dealing desk. This allows you to confirm that you have enough funds to cover margin before placing a trade.

Q15: Will my profitable positions offset losses on my negative ones?

Yes, open profits or losses are both taken into account when calculating margins.

Q16: How do I calculate if I am on a margin call?

Your margin is determined by the Total Position on your account. If this figure is negative, the funds required to bring it back to a positive figure is your margin call. This is calculated by using the following formula:

Account Balance - Total Margin Requirement + Open Profits - Open Losses = Total Position

Q17: Who is responsible for monitoring my margin?

It is your responsibility to monitor your positions and to ensure you have sufficient funds in your account to cover them, however we may attempt to assist in making you aware if funds are required. We are not obliged to make a margin call but will usually make attempts to contact you.

Q18: What are the rules for payment of margin?

Margin calls are due immediately, however clients may be given 3 working days to pay margin calls under $25,000 following a position move against you. This timescale is based upon the time your positions move onto margin call regardless of contact with us. There may also be other circumstances where margins are required the same day. Client accounts which go into negative equity will be required to pay immediately. Otherwise, open positions will be closed.

Q19: Might I have to make more than one margin payment in a day?

Yes. In highly volatile markets this might be necessary.

Q20: What happens if I can’t pay my margin call?

Please contact us if you believe you will have difficulty meeting your margin call. If you are unable to provide sufficient funds to meet your margin call then you may have to close some or all of your positions in order to bring you off margin. It may also be possible to reduce the margin call by placing stop losses.

Trading Costs

Q21: Why is there a charge to hold the position open when I have paid a commission?

You only pay a financing charge if you hold a long position. This is because CFDs are a margined product. You only deposit a fraction of the overall value of the trade (typically 10%), allowing you to make a much larger potential investment than if you were buying the shares. So for example, $1,000 would be needed to buy a CFD representing $10,000 worth of shares. You are effectively 'borrowing' the $9,000 difference, hence the financing charges.

Q22: Do I get charged commission for buys and sells?

Yes. The opening and closing trades are effectively two separate trades, and therefore you are charged commission for each trade.

Dividends

Q23: Do I receive dividends the same way as shares?

CFDs are subject to a dividend adjustment intended to replicate the net dividend payment applicable to the ordinary share. A dividend adjustment is credited to long positions and debited from short positions held at the close of business on the day before the ex-dividend date. Payment is credited or debited to your account on the ex-dividend date.