Margin is the amount of money you have to set aside on your trading account as collateral in order to be able to open a leveraged financial spread betting position. Margin requirement varies by market and is expressed as a proportion of your position value.
Margin is not a cost as the money is merely an amount held on deposit as security on the trade in the event that the markets move against you. The initial margin requirements (IMR) for each market group can be found in our Product Information Guides as well as on the XDeal trading screen. These requirements are reviewed regularly and are subject to change. You can calculate the margin required for a particular trade by multiplying the mid-price of the market by the % IMR and further multiplying this by your stake. Take a look at the example below to see how this would work when opening a Bank of Ireland position:
| Bank of Ireland mid-price |
895 |
| Stake per point |
€10 |
| Margin Required |
15% |
| Margin needed in your account |
895 * 0.15 * €10 = €1,342.5 |
Margin Calls
As margin requirement is expressed as a proportion of your position value it fluctuates as the price of the traded contract changes. A margin call can occur when you are required to deposit additional funds to ensure your account valuation is above the required margin level to support your open positions. The amount required in this situation is calculated as follows:
| Account Valuation |
€X |
| Current Margin in Use (IMR) |
- €Y |
| Additional Margin Required: |
€Y-X |
You can monitor your account online on the Account Summary page of the XDeal trading screen – the important figure here is Trading Resources. If this figure has gone into negative territory you have gone into margin. When this happens you have several options:
- Deposit more funds into your account to cover your open positions (find out how to do this here).
- You can close some or all of your positions to free up your trading resources.
- You can reduce the size of some or all of your positions to free up your trading resources.
It’s important to note that any margin calls you may receive from Delta Index must be dealt with promptly in order to maintain your positions. As markets can move fast and positions may go against you, clients should ensure that they always have enough funds to cover open positions. Delta Index cannot guarantee phone calls to alert you to your margin requirement and your position may be closed if we do not hear from you.
If you have received a margin call and after reviewing your account you find that the markets have moved in your favour and you are no longer in margin we require no further action on your part in this situation. However, you may consider it appropriate to free up some trading resources, through any of the options mentioned above, to prevent your account from going into margin again.
For more information on margin calls please see our Terms and Conditions.
Questions?
If you have any queries on margin and how it affects your trading with us, feel free to call our Client Team on 1850 88 20 20 who will be happy to answer any questions.