Can't understand why Margin keeps increasing way more than 2x if requirement is 1:5... What is this?

🤝 Help
1

So I checked my account since some days, and after noticed all the settings on my trading212 platform were changed. I added the margin tag again, and it is what I noticed…

(This happened with all my positions but here is an example)

19 November I opened 1 position with Tesla at this price:

Screenshot of it’s values taken around 3 December (already after you changed margin requirements to 50%):

Now, here it is the screenshot at the current levels:

Can someone explain to me why margin increased? From what I understand if I open a position of one CFD @ 495.68$ and margin requirement is 50%, shouldn’t margin be 247.84$ (half the price) ?
Seeing the platform since I opened the position of the example above, margin increased by +45.43$ since I opened it on 19 November until 3 December…. and now increased +178,01$ since I bought it!

Can someone explain what’s going on please? Shouldn’t be Blocked Funds who change overtime because of swap fees instead of margin? Margin continues to rise, although the price I bought it remains obviously the same…

2

The reason is the fact that the margin is not a static value. It gets calculated according to the current market price, using the formula:

(Quantity * Current market price) * margin %

The interest has nothing to do with the blocked funds. It gets deducted from the free funds’ area.

1 Like
3

Hi Rumen, thank you for answering. I get it know. Yesterday I noticed that already, it’s 50% of market’s price.

If free funds turn to zero, in that case where are swaps deducted from?

Best regards

4

When there are no more free funds left, the interest is deducted from the blocked funds.

5

Like I thought. Thank you once again.