Thursday, August 8, 2013

Margin Policy

Our Margin Policy protects you against adverse market movements by closing your positions if they risk causing losses which your account equity balance can’t sustain.
Outlined in a clear and transparent manner in section 14 of our Customer Agreement, the policy explains when positions will be automatically closed; when they will be considered to carry too much risk. This is particularly relevant in times of market volatility.
When the market moves against you, the equity balance on your account may not be sufficient to cover the maintenance margin of your open positions and/or working orders. If there are insufficient funds in your account, we may close some or all of your positions or working orders to protect you from losses, so it’s in your interest and ours to ensure sufficient funds remain in your account for positions to stay open.

Your responsibility

While we may make a ‘Margin Call’ via email to alert you if your account balance needs to be topped up to prevent positions being automatically closed, we are under no obligation - and we are sometimes unable - to do so.
It is your responsibility to manage the balance on your account to maintain the margin required for open positions and working orders.
The automatic closure under the circumstances above occurs to ensure clients do not make losses greater than they can afford.

FX - Limited Risk Options

You can now trade daily Limited Risk Options on major forex pairs.

Limit your potential risk but not your potential profit

Only available to our Singapore clients, Limited Risk Options are a new way of taking a position on forex pairs such as EUR/USD.
They have either a predetermined ceiling or floor built in to limit your risk to a value known upfront. You choose your floor or ceiling from a list of available levels when you open the trade. There is no added cost for this; it is built into the price of the product.
As the products have either a ceiling (for a sell position) or a floor (for a buy position), they let you cap your potential loss but not your potential profit, controlling your risk in a manner similar to using Stop orders. Unlike Stop orders, the floor or ceiling on a Limited Risk Option cannot be changed on open positions.
Forex - Limited Risk Options

Keep your positions open

Another key difference between these products and traditional Stops on other products is that a market trading through a floor or ceiling on a Limited Risk Option won’t stop out your position.
Rather, it remains open until you close it, or until it expires at 11pm that night, Singapore time.
This means that even if the price moves against you and breaks through your floor or ceiling, your position will stay open and benefit from any subsequent change in the market there might be in your favour, until 11pm that night.
Regardless of price movements, you are free to close your position at any time up until one minute prior to expiry.

Peace of mind

Limited Risk Options provide the peace of mind of knowing that your position will not get closed at a worse price than the resistance level – the floor or ceiling - stated at the time of opening the position.

Trailing Stops risk managment

Trailing Stops

   
Trailing Stops move the level of your Stop on your position, in line with market improvements.
As Non-Guaranteed Stop orders, Trailing Stops are free of charge, and they can be added, deleted or amended on positions at any point before they are closed.
Equally, however, the protection they provide is limited in that they carry no guarantee to protect your position against slippage should the market gap. That level of protection is only available through Guaranteed Stops.

How Trailing Stops work

The unique benefit of these Stops is that they automatically adjust – in incremental stages and on conditions which you have set – to mirror market movements.
So you needn’t watch the market and adjust your Stops when markets are moving in your favour, as a Trailing Stop does it for you. In this manner they help to lock in the profits on your trade, without requiring constant attention and amendments from you.
Of course, as these are Non-Guaranteed Stops, you can amend Trailing Stops on your open position - or even remove them - at any point.

Setting up a Trailing Stop

To use Trailing Stops, you must first activate them on your account on the trading platform. To do this, simply:
  • Go to Preferences (in My Account)
  • Select 'Allow Trailing Stops'
  • Accept the special terms and conditions
  • Click 'Set Preferences'
You will now find a Trailing Stop check-box on your Deal Ticket for most forex trades, and selected indices and commodities.

Non-guaranteed Stops risk management

Non-guaranteed Stops
   
Non-Guaranteed Stop orders let you trade with the peace of mind that your position will be closed if the market trends against your position.
A key difference from Guaranteed Stops is suggested in the title; Non-Guaranteed Stops carry no guarantee of protection against slippage should the market gap. This means that your position could be closed at a worse price than your Non-Guaranteed Stop level.
Unlike Guaranteed Stops, however, Non-Guaranteed Stops can be added to - and removed from - open positions at any point, not just on opening a trade. Their level can also be moved while the position is open, regardless of whether the underlying market is open or closed at the time. And they are free of charge.

Flexibility

Non-Guaranteed Stops provide the flexibility to alter your trading strategy on open positions, as the market moves.
You could add a Stop order to limit your risk of losses while you take your eye off the market for some time, or increase the level of your Stop order if the market has moved in your favour, for instance.

Guaranteed Stops risk management


Guaranteed Stops

Providing protection from sharp market movements against you, a Guaranteed Stop on your position ensures it will be closed at the price you state, with no slippage.
Guaranteed stop orders
The security and peace of mind of a Guaranteed Stop incurs a small cost, referred to as our Limited Risk Premium. Effectively an insurance premium, this cost has been reduced to start from just 0.8 pips on forex products.

Price lowered

The reduced pricing structure of Guaranteed Stops is as follows:
  • Forex - From 0.8 pips
  • Shares - From 0.3% of the transaction value
  • Indices - From 0.1 points
  • Commodities - From 0.2 points
The margin requirement for Limited Risk trades – those with Guaranteed Stops – is equal to the value at risk if the Guaranteed Stop is triggered, plus 10% to cover any holding costs, for example funding or dividend requirements.

Margin requirement

Guaranteed Stop
 
In this respect, the margin shown in the Deal Ticket confirms not only the margin requirement, but also the potential loss of the trade due to market movements. This is displayed in the relevant underlying currency and your preferred currency, in a clear, transparent and upfront manner.
Guaranteed Stops can only be added to the trade when it is opened, and you are free to change the level of the Guaranteed Stop until the trade is closed.
Bear in mind that you are also responsible for retaining sufficient funds in your account to cover incidental costs for funding and holding positions overnight, for example, and interest and dividend adjustments, should these apply.

Rebates for High Volume Forex Traders

If you're an active trader dealing large volumes each month, it's likely you are eligible for automatic rebates.
High volume traders are eligible for automatic rebates on all forex pairs, if they trade over 5000 standard lots (or equivalent) each calendar month.

Am I eligible?

Everyone's eligible for automatic rebates, provided they meet the volume threshold in a month's trading. There are no forms to fill in - just keep trading as normal and if you meet the high-volume level, we will automatically pay the rebate direct to your IG account. Simple - no fuss, no hassle, we do everything for you.

How much do I save?

Automatic rebates are available for all forex trading, with the monthly rebate is realised on your account in USD.
Forex rebates
No. of standard lots (or equivalent) Rebate per lot
On the first 5000 US$0.50
On the next 20000 US$0.75
25001 plus US$1.00

Forex savings example


Please note that the period over which monthly rebates are calculated begins and ends with the start of the calendar month in UK time. As forex markets are traded 24 hours, there will be a short period at the start and end of each month when the rebate period is not in synch with the calendar month in Singapore, due to the time difference with the UK.

Competitive Rates

We charged at some of the most competitive spreads and commission rates available, with all costs made clear before you trade.

What we charge and why
Please see below for an overview of our charges.
Our transparent prices page outlines our commitment to providing upfront prices and no hidden costs.

Spread and commission

CFD Spreads
 
Our share are offered at the underlying market price without any mark-up. We simply charge a small commission to open and close your position.
Our other markets – such as forex, indices and commodities  - are provided commission-free. All you pay is a spread, added to the underlying market price.

Funding

CFD Funding
 
If you keep a position open overnight, we charge a small funding fee.
For share and standard cash index trades, this cost is based on the relevant interbank rate (e.g. SIBOR) plus/minus our low finance rate of 2.5%, depending on whether the position is long or short. The interbank rate used is based on the currency you're trading in. For non-standard MYR-denominated, or mini shares contracts, the fee is the one-month interbank rate +/-3%.
For forex positions kept open overnight, this fee is the 'tom-next' rate plus an admin charge of no more than 0.3% on either side of the tom-next spread.

Currency conversion

Currency Trading ConversionYour profit or loss is converted into the currency you set up on your account, at a rate not worse than 0.3% from the mid-price at the time.

No administration charges

We have no hidden admin charges, such as margin call or one time platform fees $250. Our pricing approach is clear and transparent.
We charge a monthly inactivity fee of $250 on the first of the month if no trading activity has occurred for two years or more, provided you have a positive balance on your account. ‘Trading activity’ is defined as opening or closing a position, or updating an open position.

External fees

We pass on a 2.1% payment-processing fee, We do not mark this up, we simply pass it on.
We also charge a data fee for access to live exchange price data, on a charge-and-refund basis whereby it is refunded if you place a nominal, minimum number of trades per month. You can view further details in My Account > Data Feeds after you log in to our trading platform.

Borrowing charges

With short share positions, we may pass a borrowing charge to you if we incur such a charge when we open a trade in the underlying market. Our dealers can explain in advance whether such a charge will apply, and we will pass any such charges on with no mark up.

Limited risk

Our guaranteed stops – which provide the best possible protection from market movements against you – are available for a small charge, starting from 0.8 pips on forex.