CFDs - Margin and Payments

Margin Trading requires you to deposit a small percentage of the underlying value of the investment you wish to deal in, rather than paying the full purchase price of the asset. This means you can increase your exposure to an underlying asset from the same capital outlay. As a result, you can multiply your potential return, giving you far greater profits or losses, than if you were to trade the underlying asset directly.

Margin Requirement:

Margin Requirement is the amount of money you need to deposit with us in order to place a Trade and maintain that position. 
When you place the Trade you must have sufficient net equity (cash and unrealised Profit & Loss) to pay the Margin Requirement for that Trade, as well as the commission (if applicable) and/or any charges, including the spread.

Margin Level

The Margin Level is the ratio of your Net Equity to Total Margin.

Example, you have a Cash Balance of £1,500 and you are losing £200, your Net Equity is £1,300. Your open position has a Margin Requirement of £1,000. Your Margin Level is £1,300 / £1,000 = 130%.

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 should not expect to receive a margin call or warning prior to closure. We therefore strongly recommend that you strictly monitor your margin level.

Please note that it is your responsibility, and not that of Halifax CFDs, to monitor your positions.

You will be notified of the Margin Close Out Level in the Key Service Features.

Important Points

Please be aware that each individual position you hold has a Margin Requirement. You must maintain the Margin Requirement percentage, in addition to any losses on the CFD.

You can improve your Margin Level to prevent it reaching the Margin Close Out Level by adding funds or reducing your exposure.

1) Increase your Account Balance
Introducing funds into your account will improve your Net Equity and therefore your Margin Level. If you need to transfer funds into your account, please ensure you leave plenty of time to guarantee your payment arrives in your account, as we cannot be held responsible for any delays in payments being credited. The fastest way to pay is by depositing funds online, but you can also contact us by telephone to make payment. Please refer to the payments page on our Trading Platform for more information.

2) Reduce your Total Margin
It is possible to reduce your Total Margin by fully or partially closing certain Open Positions. By reducing your position exposure, you decrease your Total Margin, which means your Margin Level will then increase.

You should always ensure that your Margin Level remains above the Margin Close Out Level. The price of your Open Positions can often change quickly and by large percentages, bringing your Margin Level close to or below the Margin Close Out Level should the price move against you.

To avoid closure of your Open Positions, we recommend that you closely follow your Open Positions and Margin Level and keep surplus funds in your account to ensure you cover any potential market movement.

Find out how to apply now for a CFD account, please make sure you have read and understood the key features of this account before you apply.