GBP/USD Margin Rates increased from 0.9% to 1.8%

[CPC69]

I found this morning that IG have increased the margin requirement for trading GBP/USD from 0.9% to 1.8% overnight without any notice.

Has this happened to anyone else and is there an explanation, apart from the the obvious volatility increase?

[CPC69]

I've just seen an update from James and it looks like the margin rate increase is due to volatility. However, he doesn't state whether it is temporary or a permanent increase.

 

[247trader]

don't you get "...this will likely be reduced once market volatility has decreased, however we are unable to put a timeframe on that as it's based on the underlying market conditions." ??

Short term for sure.

[CPC69]

3 minutes ago, 247trader said:

don't you get "...this will likely be reduced once market volatility has decreased, however we are unable to put a timeframe on that as it's based on the underlying market conditions." ??

Short term for sure.

Yes I get that... but its good to clarify. Also, the increase is not across the board, i.e. non-pro traders are not affected and I understand that they incur higher margin rates anyway.

[Caseynotes]

Hi @CPC69 & @247trader, I take it that's the professional margin rate, is there a similar adjustment to the retail margin rate.

I presume you are talking about an email? the microsoft outlook email system has been crashing for around 8 hours and many (all?) can't access emails atm.

Maybe @JamesIG or someone from IG could post something on the forum?

[Mercury]

Retail margin unchanged @Caseynotes.  The only advantage of the changes to retail margins is that they are already fairly high so no need to change them for ST volatility I assume.  IG @JamesIGcan you confirm this approach?

[Caseynotes]

Thanks @Mercury, I only just noticed the blue banner above with the memo in after I posted. It never gets my attention that, maybe they should change the colour to something a bit more attention grabbing.

[Mercury]

Yeah, me too @Caseynotes.  Flashing neon or something maybe...  But you can check the margins by opening a ticket on the regular IG platform and clicking a buy or sell with a £ number.  It wont trigger a position until you click "place deal".

[CPC69]

Its interesting that some other brokers haven't increase their margin rates. Trading 212 have confirmed this morning that their GBP/USD rates are still: 0.33% float/0.5% fixed for pro clients and 3.33% for Retail clients.

[JamesIG]

Hi all - the margin floor has change to 2% for all professional and retail non-ESMA. As stated above this is likely to last going into 10PM tonight for new positions only, and will be reevaluated on Monday. This is of course subject to change and based on the underlying landscape. 

1 hour ago, Caseynotes said:

Thanks @Mercury, I only just noticed the blue banner above with the memo in after I posted. It never gets my attention that, maybe they should change the colour to something a bit more attention grabbing.

Noted. Blue is generally used for informational updates (and we try and stay clear of red etc which can look like errors or issues). I'll try something else. 

[har]

On ‎16‎/‎11‎/‎2018 at 13:00, JamesIG said:

Hi all - the margin floor has change to 2% for all professional and retail non-ESMA

It is clear what you mean by margin floor, and it makes perfect sense - when the margin floor is 2%, the professional rate is 1.8%. If the margin floor were ever to rise above 3.33%, retail margin would have to increase.

The problem is that I have been assured that there is no such thing. There is only the professional rate and the retail rate, they are set independently and not related to anything else.  Neither of them was 2%.

Is there still a margin floor under the hood?