Guaranteed Stop Margin

[IGMan]

A real backward step introducing new margin calculations for guaranteed stops. If I do £5 a point on the Dow with a guaranteed stop of 20 the margin was always 100 plus the premium of 1.8 giving £109. Now it is £548 to place the same trade.

 

This really makes it uncompetitive and a very bad move from IG.

 

Disappointed that we are faced with another blocker.

[ChrisWa]

Hi 

 

We appreciate your comments and this will be submitted to the feedback team. 

 

To provide you with some further information, we have made these changes due to the current situation we are facing with tougher regulations in the leveraged environment. In your example if we use the original Guaranteed stop margin, then the leverage on the position is approximately 1000-1. 

 

Unfortunately, we will no longer be allowing the minimum margin requirements by using guaranteed stops, we are effectively enforcing minimum leverage restrictions. 

 

Thanks.

Chris

[Lola]

If it's a guaranteed stop how is it leveraged at 1000-1.

Surely this is the point of the guaranteed stop?

[JamesIG]

Sorry for letting this one slip though the net and not getting back to you. You may have had your question answered via our Helpdesk, but I just wanted to follow up on this here. 

 

I do appreciate that the value required to open a position may have increased, however what we are specifically focusing on here is the leverage, rather than the financial risk on a trade. 

As per the previous question if you were to have a GStop 20 points away on a Wall Street trade (assuming it's trading at 21,800) you would have a leverage of 1090:1 whilst without the GStop you would be margined at 200:1 which is obviously less. It maybe easier to show this via a calculation below. 

 

20 pt stop level / 21,800 market price = 0.0009174

1 / 0.0009174 to bring this into a leverage value = 1090

Therefore 1090:1

(alternatively you can just do notional divided by deposit (£5 x 21,800) / (£5 x 20 points) which gives the same value

 

This leverage value what we are focusing on bringing in line, rather than the financial risk on the position. I hope this clarifies things. 

[Sjwcfc123]

Sadly, this no longer works for me. A Guaranteed Stop should be what it implies and we pay the premium to have GS's. Having to deposit £ 500 for a £5 with a 6 point stop makes no sense whatsoever.

 

My spreadbetting days are numbered as I don't have mountains of cash to deposit into IG's bank account.

[IGMan]

I agree.

 

I have scaled back my trading significantly since the new rules were introduced and I suspect many others have too.

[Chrisblu1]

Not sure how this excellent post is deemed to be solved - just because you respond doesn't mean a thing if you don't hear or listen to your clients.......

[Kodiak]

"Having to deposit £ 500 for a £5 with a 6 point stop "

 

those were the good old days?

[Creatick]

Hi,

 

In USD/CHF, i see the Stop Margin at 457 points, compared to other Currency Pairs being between 4-8 points. When i try USD/CHF in Demo account, it shows normal 4 points. Why is there so much of difference between Demo Account and Real money account?

 

Thanks,

Sanjay.

[PandaFace]

It’s manipulated by their government so much I guess they think there’s a risk of volatility.