Hello, I have a question regarding IBKR margin requirements for trading with CFDs. I was reading up on it on their website, but couldn't find information, if the margin requierments apply to single CFD position or to net equity. For example, I could be long 100 shares of XYZ and short 100 shares of ABC. Theoretically if both XYZ and ABC grow by 60%, my net equity is unchanged. If the margin rules are applied to single CFD position though, I'm getting margin call on ABC. My question is, is IBKR looking at net equity or at single position?
Fee Comparison Trading Bitcoin on CFD sites vs. Spot-Margin Exchanges vs. Futures Exchanges
When you want to speculate on changes in bitcoin price, there's three main types of places you can achieve this on:
CFD sites - where the 'broker' takes the other side of your trade and behaves more like a bookmaker which manages their risk exposure than an exchange. They often state they have "no fees", but the bid-ask spread and leverage fees can add up.
Spot-margin exchanges - where you are trading with other customers and the exchange takes a fee on trades. The spread varies based on market liquidity and margin varies based on exchange policy and market rates too. But since you are borrowing money on spot, someone has to finance it and you pay interest on the leverage as well, whether it's the exchange or another customer who lends you the funds on margin. You also will pay roughly 0.1-0.3% nominally on trade fees.
Futures exchanges -- similar to spot exchanges but the margin within the contracts is completely free and provided within the contracts itself, not requiring borrowing of any funds to engage in leverage. Whether you are at 2x or 100x leverage, you do not pay any interest/financing charges at all. You and your counterparty in an open position are providing the leverage, and the exchange provides the mechanism to handle people who fall short of margin requirements. Trade fees range from -0.1% to 0.075% per trade.
Bid-Ask Spread (Max Leverage, as % of Initial Margin)
Daily Charge (Max Leverage, as % of Initial Margin)
Socialised Losses?
1Broker (5x)
CFD
0.2%
0.1-0.15%
1%
0.5-0.75%
No
SimpleFX (10x)
CFD
0.23%
0.175%
2.3%
1.75%
No
WhaleClub (10x)
CFD
0.2-0.5%
0.2%
1-2.5%
1%
No
Bitfinex (3.3x)
Spot/Margin
0.01-0.1%
0.01-0.08% (Varies, market based)
0.03-0.3%
0.03%-0.25%
No
Kraken (5x)
Spot/Margin
0.05-0.2%
0.1% (Exchange-provided, not market-based)
0.25-1%
0.5%
No
OKCoin.com (20x)
Futures
0.01-0.05% (Varies, Market based)
0%
0.2-1%
0%
Yes
BitMEX (100x)
Futures
0.02-0.25% (Depends on contract/liquidity)
0%
2-25%
0%
Yes
CryptoFacilities (6x)
Futures
0.05-0.8% (Depends on contract/liquidity)
0%
0.3-4.8%
0%
No
TL;DR Liquid bitcoin futures exchanges offer the lowest cost choice to do leveraged bitcoin trading, and have multiple fee discount advantages over Spot Margin exchanges and especially CFD sites. However, socialised losses ("DPE") are the downside: they are a form of hidden fee themselves against profitable traders who bear the load of system losses. Edit: Fixed SimpleFX max leverage for BTC to 10x not 25x. Also included a warning about socialised losses for trading bitcoin futures at high leverage.
Can anyone share any advice for someone starting out in leveraged trading/margin trading? Spread betting, CFDs, FOREX
I'm starting out investing and think I will try my hand at spread betting as it has tax benefits over CFDs. I know how risky it is and I'm not planning to have more than 10% of my savings exposed at any time. I'll most likely be betting on indexes and I've done quite a bit of analysis of the FTSE 100 but if you have any advice on commodities it would also be welcome.
I'm trading for 11 months with pretty good success. I never traded metals and forex before, just stocks. Today when gold started to consolidate at the last hour, I decided to scalp short it with a large amount, so I opened 100 lots. I haven't realised, in forex 100 (lots) doesn't mean "100 pcs", because I used to stocks and I went full retard without knowledge. Seconds later, I realised it means 10 million dollars (1 lot = 100.000, and I had 500x leverage). It moved up a bit and immediately I was down £4000. I scared as fuck and rather than closing the position quickly I hoped maybe I could close break even. The market closed, and I waited for the Asian session. The gold popped like never before, and I lost all my life savings (£55000) in less than two hours. (including the 1-hour break between sessions). If I count that I lost all my earnings as well, I lost around £85000. Here is the margin call https://imgur.com/a/XY5m4ZA https://imgur.com/a/VSgmCSs https://imgur.com/pRWl5g9 IC Markets closed my position partially in every 1-2 minutes until I shut it myself at £35. You know the rest of the story. I'm depressed, crying and shouting with myself. Yes, I know I was stupid, thanks. I just wanted to share this with you. Edit: WOW THANK YOU, GUYS! I haven't expected this, but you help me. Many of you asked the same questions, I answer it here: - I live in Europe, and we usually trade CFD's, not futures. - Currency in GBP. - As you can see, this account made on IC Markets. They not just allowing you a 500x leverage, it's the default. - You can ask me why I went against the market. Because gold is way oversold? Because I expected institutions would sell their shares before gold is hitting £2000, leaving retails hanging there. Also, as I said, I wanted to scalp, not riding the gold all the way down. If I had a loss of £100, I would close the position immediately. But when I saw the £4000, my heart is stopped, and my brain just freezes. - I went for a revenge trade with my last £2k, and I don't have to say what happened. I uninstalled the app, and I give up trading for a while. - Again, in the past months, I was cautious, I lost a significant sum in March, but I managed to recover. Made consistent gains, always with SL. This is just an example of how easy is to fuck up everything you did. - I didn't come here for some shiny digital medals. I can't tell about my losses to anyone who I know in real life. I would make a fool of myself. - Anyone who attacking me that it is a scam. Well, think what you want. I feel terrible and the last thing is to answer all the messages saying "You fucking karma whore". I don't give a shit about karma.
Oanda margin requirements up by 100s to 1000s percent?
Stupid question, but oanda's margin requirements is in the 100s to 1000s of percent? I know it's the weekend, so I'm not sure if that's the cause. I'm new to the broker and trading, so I'd just like to get a better understanding. Thank you in advance.
16 and trying to learn trading. Why am i only allowed to buy 0.8 shares at 43.94 when I have a £100 in my practice account? Also is the buy price is at $1438.38 is that per share? If so how can I have quantity 0.8 for £43.94? Real nooby question but appreciate the help.
Can someone explain to an idiot (me) how the cost of a trade of CFD, whether it be Forex, oil, crypto etc, is calculated in terms of how much money is required per trade? This is all in a practice account, I just enjoy playing with it. For example the price of Ethereum on T212 is currently around the $311 mark. If I take out the highest quantity of 500, what is the calculation of how much this costs me? I've done so, and the blocked funds in my account are around £6000. I just can't get my head round where £6000 is calculated from 500 units of $311?? Many thanks!
Good and honest trading platform for CFD trading (eu citizen)?
Hi, I cant find one with a good customer support and that does not leave a trail of scam and issues. I only do 1:5 leverage mostly on US stock market. Please help...
The Bottom Line . Advantages to CFD trading include lower margin requirements, easy access to global markets, no shorting or day trading rules, and little or no fees. What is a CFD? 'Contracts for difference', or just CFDs, are tradable products that follow the prices of global financial markets. A CFD allows you to obtain direct exposure to an underlying asset, for example, Gold, UK 100 or EUR/USD, without the need of owning the underlying asset. You will make gains or incur losses as a result of price ... CFD Trading. Invest in Shares Access over 1500 ETFs & equities at rates that are among the most competitive in industry. ... Margin trading gives you full exposure to a market using only a fraction of the capital you’d normally need. Margin is the amount of money you need to open a position, defined by the margin rate. CFD are leveraged product, you don’t need to pay the full value of your exposure in order to trade. Whenever you are trading with CFDs (Contracts for Difference) and you wish to open a position with a given instrument, there will be a required margin of funds in order to open and maintain the position. The funds will appear as blocked while the position remains open and they will be released again once the position is closed.
Margin and Trade Financing; Cost of Holding CFDs: Financing, Charges and Dividends. PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! Margin is the deposit required to fund a trade expressed as ... http://Trader.ge The Pros and Cons of Trading CFDs Advantages - Margin Trading (leverage allows you to control bigger positions than what otherwise would be possible with a normal broker) - No Stamp Duty CFD Margin And Leverage: How It Works 🤷🏿♂️ - Duration: 8:16. UKspreadbetting 4,757 views. ... Make a Living in 1 Hour a Day Trading the 3 Bar Play!! - Duration: 34:34. CFD Margin And Leverage: How It Works 🤷🏿♂️ - Duration: 8:16. UKspreadbetting 3,287 views. ... Day Trading CFD's for 1,286$ in 1 hour - Meir Barak - Duration: 9:26.
