CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
A margin call is what happens when the amount of equity you hold in your account falls below the margin required to keep your trades open.
We aim to follow the process outlined below, and will send margin call notifications wherever possible.
If your equity drops below 100% of the required margin, you’ll receive a margin call.1 You will no longer be able to open new trades or place orders.
If your equity to margin ratio drops below 75%, you’ll receive a second margin call.1 You still will not be able to open new trades or place orders.
If your equity falls to 50% or less of the margin amount required, our automatic margin close-out process will be initiated.
The Scenario
The Margin Call Process
The price of Company A shares falls to $78. This means the value of your position declines to $3,900 (50 x $78), and your equity becomes $2,400 ($1,400 remaining on the position, plus the additional $1,000 in your account). Your current equity-to-margin ratio is therefore 96% ($2,400 / $2,500 x 100). This means you’ll receive your first margin call, as your equity is below 100% of the $2,500 required margin.
Imagine that Company A’s share price goes down further, taking the value of your position to $3,300. Your equity is now estimated at $1,800 ($800 remaining on the position, plus the additional $1,000 in your account). This is 72% of the required margin, which is below our second margin-call threshold of 75%. You’ll therefore receive a second margin call.
If the value of your position falls below $2,750, your equity will have dropped below 50% of the required margin (below the $1,250 equity level). Our margin close-out process will begin and your positions will start being closed automatically.
When your loss-making positions grow to the point where you only have enough equity to cover 50% of your losses, our margin close-out process starts automatically to protect you from spiralling losses. Please note the automatic margin close-out process is a regulatory requirement, and cannot be deactivated.
The automatic close-out applies in the following order until your equity is above 50% of the margin requirement.*
*Please note that not all markets are open at the same time, so a profitable trade may be closed before a losing one.
There are some sensible steps you can take when trading to lessen the possibility of receiving a margin call.
Ensure there is sufficient equity in your account to act as a buffer if the markets move against you
Trade a variety of different asset types to spread out your risk
Keep an eye on market prices, either manually or by using the tools available on our platform such as price alerts and watchlists
Apply stop-losses and take-profits to your positions to stay in control of your exposure
Once you’ve received a margin call, you can take these actions to bring your margin up to 100% of the amount we require.
1 Communication around margin calls.
Please note that we can’t guarantee to contact you when you’re on margin call. It’s your responsibility to ensure there are enough funds on your account at all times to cover your margin requirement, and we’re under no obligation to keep you informed about this. Any attempt to contact you will be as a courtesy only, and may be by telephone, email or text message.
Markets can move very quickly, which may mean that we are unable to contact you before your positions get closed. If your equity drops from above 100% of margin to below 50% in less than five seconds, for instance, we will not be able to contact you and your positions will be at risk of being closed.
2 Please note that basic stop-losses are not guaranteed and can be subject to slippage. You can choose to place guaranteed stops to place an absolute limit on your losses, but these will incur a charge if triggered. You can see these charges on our charges and fees page.
Contact us:call +33 187654090
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