Frequently Asked Questions
Contracts for Difference
We have included a list of our most frequently asked questions about Contracts for Difference.
- What is a Linked Limit order?
A Linked Limit is a Limit order that is linked to an open position.
If that open position becomes closed for any reason then the Linked Limit order will cease to exist.Example:
You place a trade to sell 10 Wall Street CFDs at 10680, and you enter a Linked Stop Loss at 10700, and a Linked Limit at 10620.
If the position is closed before either of your orders are triggered, then both the Linked Stop Loss and Linked Limit will automatically be closed. If the Linked Stop Loss is triggered, the position will be closed and the Linked Stop Loss will automatically be closed.
Similarly if the Linked Limit is triggered then the position will be closed and the Linked Stop Loss subsequently cancelled. - How do I calculate Margin Requirements?
Margin Requirement is the amount you must deposit to place a trade. In order to place a Trade you must have enough Net Equity (cash and unrealized profit) to cover the Margin Requirement for that trade.
The Margin Requirement is calculated in the following way:.
Margin Requirement = Margin factor x Quantity
Margin Factor - is the percentage or number of units set for a Market.
Quantity - means the amount of units traded in a Market. The quantity is often referred to as the "stake" or "trade size".
Margin factors for shares are calculated according to the share's liquidity, market sector and capitalization.
The calculations for Margin Requirements can change in relation to other open positions you hold or depending on the Product you are trading. Please make sure you are aware of the Margin Requirement applicable before you open each trade.
You can find the current Margin Factor for a particular market by looking at the Market Information tab on the Trading Platform. Alternatively you can contact Customer Services Team.
- Why do I pay a daily Financing Fee?
When you open a CFD position you in effect are borrowing the total value of the trade minus the Margin Requirement that you are required to deposit in the account prior to the trade being accepted.
For example if you open a long position for €10,000 and you are required to deposit a Margin Requirement of €1,000. The financing charge you pay is to cover the cost of borrowing the difference i.e: €9,000 (€10,000 - €1,000).
- Do I get charged commission for buys and sells?
Yes. The opening and closing trade is effectively two separate trades, and therefore you are charged commission for each trade.