Margin Requirement is the deposit required to maintain each open trade on your account. To open a trade you must have sufficient trading resources on your account (cash balance + profit/loss from open trades) to cover the Margin Requirement applicable to that trade. Sufficient net equity must then be maintained in order to keep that trade open.
You can monitor the level of cover you have for your open positions using the Margin Level Indicator on our Trading Platform. Your open positions may be subject to closure under our Margin Close Out policy (see Question 7) if your net equity falls below your Margin Requirement.
Margin Requirement is calculated as a percentage of the position. This percentage (Margin Factor) varies so first you must find the Margin Factor for your specific market. These are listed within the ‘Market Information’ icon which is located next to the market's Trade and Order buttons on our Trading Platform window.
Once you know the applicable Margin Factor, your margin is calculated as follows:
For example, if you want to buy 5,000 Vodafone CFDs (Margin Factor = 10%) and Our Offer Price is 1.49.Margin Requirement = (5,000 x 1.49) x 10% = $745.
Please note: For some markets such as gold, silver, bonds, options and binaries the margin calculations may differ from the examples above.
Your Margin Requirement may be reduced for a particular trade if you have a Stop Loss Order in place.
Certain markets are ‘Orders Aware’ and hence offer a percentage reduction on Margin Factor if you have a Stop Loss Order in place. Information regarding whether or not this applies to an individual market, as well as any reduction in Margin Factor offered, is available within the Market Information sheets on the Trading Platform.
If you have a Stop Loss Order in place and the market is Orders Aware, then your Margin Requirement will be the higher of:
If you have a Guaranteed Stop Loss Order then your Margin Requirement will be the lower of:
For trades when the Margin Factor is expressed as a percentage:Quantity x Our Price x Margin Factor
These are listed within Market Information icon, which is next to the market's trade and order buttons on our trading platform.
If your Margin Level is at or below the Margin Close Out Level, we may close all or any of your Open Positions in markets that are open immediately and without notice at the next available Our Price. You can find your Margin Close Out Level in the Key Service Features document available in the Help section of our trading platform
We strongly recommend that you monitor your margin level carefully as you should not expect to receive a margin call or warning prior to closure. The Margin Level Indicator on the Trading Platform makes this very easy.
You are responsible for monitoring your Margin level, we recommend that you actively do this as you should not expect to receive a margin call or warning prior to closure. The Margin Level Indicator on the trading platform makes this very easy.
This is located in the upper left corner of the Trading Platform and represents the level of cover you have associated with your open positions. It displays one of the three scenarios listed below:
Step Margin is the process by which the amount of initial margin charged per trade may increase depending on the size of your CFD trade. As the size of your total position in a particular market increases, so may the amount of initial margin charged for any additional trades [within the same market].
These occur at specified step margin levels.
To find out more about the Step Margin levels for a particular market, refer to the Market Information area within the Trading Platform.
You can also view our example below using the indicative step margin levels for Company ABC:
Through certain markets, ‘Orders Aware’ margining is available. However, this can only be utilised on the first initial Step Margin. The amount of initial margin charged for any additional trades, on the same market, will not feature ‘Orders Aware’ margining. Information regarding which markets this affects can be found within the Market Information tab on the Trading Platform.
City Index is a trading name of GAIN Capital Australia Pty Ltd.
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The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments. GAIN Capital recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com.au, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. GAIN Capital Australia Pty Ltd (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.