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Thread: CFD Help

  1. #1
    shaun Kryzz's Avatar
    Join Date
    May 2008

    Default CFD Help

    Just curious regarding CFD's and margin requirements etc. For example, if i go long with 1000 OXR CFD's at 2.50, that would equal $2,500, at a 5% margin, the initial margin required would be $125 plus any fees etc.

    Say i have $250 in my account, $125 of which is now gone, if the share price moves against me to 2.30, do i actually have to pay any money out of my account, or just have enough money to cover that amount. so .20 x 1000 cfds =$200, as i only have $125 in my account, i am $75 short. So i would have to deposit an exta $75 into my account to have enough to cover the price change, is this a 'margin call'? So would the $200 stay in my account or would it have to be paid somewhere, is my main question.

    Thanks in advance.

  2. #2
    Can be found on the bid Trembling Hand's Avatar
    Join Date
    Jun 2007

    Default Re: CFD Help

    In the above example you will most likely be liquidated before your account goes negative.
    Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? -Hunter S. Thompson

  3. #3

    Default Re: CFD Help

    They would let you know a fair few times, then you would either sell part of your position to cover the requirement....or as you say pay some money into your account yourself. But they usually have a minimum amount you can have in your account anyway, so they might exit you out if you dip below it long enough with no action being taken.

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