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When you Spread Bet, you do not pay the full underlying value of the trade. However, before you trade, you are required to deposit money into your trading account. This is what is called 'initial margin' or 'notional trading requirement' (NTR). Initial margin rates do vary between instruments. These are calculated as a percentage of the overall value of the trade, typically between 1% and 10%.
For example, a trade that requires a 10% margin, having deposited only £10,000 you can hold positions worth a total of £100,000. You would therefore gain ten times leverage on the money deposited in your account. However, it’s important to remember that the full value of any running losses must be met daily. This may result in you being contacted to deposit additional funds to support a position. This is known as ‘variation margin’.
We aim to offer some of the most Competitive margins available in the market and typically margins are 10% or lower for individual shares. We use NTRs to margin all Equity Indices, Foreign Exchange, Commodities, Bullion and Treasury bets. |
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