Tiered Margining
Our system of Tiered Margining for CFDs enables clients to benefit from our lowest margins for the majority of positions.
Initially rolled out on shares, where it reduced the margin on over 4000 stocks, Tiered Margining has now been rolled out to our index and forex CFDs.
What is tiered margining?
Tiered Margining enables us to offer you margin rates that reflect the size of your aggregate position in a particular share. This means that the majority of positions will attract our lowest margin rate, reflecting the liquidity of the market at smaller deal sizes. The largest positions may require a higher margin, as it is more difficult to trade out of these positions quickly.
How does it work?
Your initial margin will be determined using a table of four incremental tiers. The margin rate will increase progressively as your aggregate position moves up from one tier to the next. However, only the portion of your position that falls into a higher tier will be subject to its increased margin rate.
The range of the four tiers differs to suit each market.
Example: tiered margining for Golden Agri-Resources
The table below shows how Tiered Margining applies to Golden Agri-Resources shares. Before the introduction of Tiered Margining, the standard margin on Golden Agri-Resources shares was 20%.
| Tier 1 | Tier 2 | Tier 3 | Tier 4 | |
|---|---|---|---|---|
| Position size (shares) | Up to 4,850,000 |
4,850,001- 29,100,000 |
29,100,001- 60,000,000 |
60,000,001+ |
|
Margin rate |
10% | 25% | 50% | 90% |
If you hold a CFD position of 4,500,000 Golden Agri-Resources shares, your initial margin deposit will be 10%.
If however you are trading 6,000,000 Golden Agri-Resources position, your initial margin will be determined as follows:
- 4,850,000 at 10% (Tier 1)
- 1,150,000 at 25% (Tier 2)
More information
A full list of affected markets and their applicable margin tiers can be found below:
The current Tiered Margin requirements for each market can be seen on the trading platform. Simply use the Get Info option on the dropdown menu for the market concerned.
Alternatively, if you would like us to calculate the margin requirement for a given position, please call Helpdesk who will be happy to advise.
Remember that the size of your overall position, and not the level of the initial margin, dictates your profit and loss. It is possible for losses to exceed your initial margin.
CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial investment, so please ensure that you fully understand the risks involved.