CFDs are traded on margin. This means that you are able to leverage your investment by opening positions of larger size than the funds you have to place as margin collateral.
The margin is the amount reserved on your trading account to cover any potential losses from an open CFD position. Please also note that it is possible that a loss may exceed the required margin when trading on leverage.
Margin requirements vary from instrument to instrument and can be changed at any time to reflect market conditions. Clients will be notified in advance where possible for larger re-ratings or changing of margin requirements for very popular instruments.
Margin requirements by CFD type and instrument are always listed under the CFD Trading Conditions on the trading platforms but can also be seen below.
Please note that Saxo Capital Markets reserves the right to increase margin requirements for large position sizes, including client portfolios which are considered to be of very high risk or where market conditions require such increases.
It is your responsibility to ensure that the required margin collateral, as listed in the Account Summary on the trading platforms, is maintained at all times. If the funds in your account fall below this margin, you will be subject to a margin call where you must either:
- Reduce the size of the open margin positions and/or
- Provide more funds (margin collateral) to the trading account.
When the required margin exceeds your margin collateral, you are at risk of a stop-out. In such a circumstance, Saxo Capital Markets is entitled to close ALL your margin positions on your behalf.