[CFD] Upcoming Increase in Margin Requirements - postponed for 01.12.2020

@obrienciaran Did you manage to solve this issue with the zero funds?

I have free funds available on CFD after closing some positions. The amount is visible on the ā€œportfolio chartā€ but the withdrawal screen shows ZERO sum.

@ammilea & @Rick.nebbeling Did you managed to withdraw? I am having the same issue. Plenty of funds but ZERO sum on withdrawal screen.

I did not. apparently it can take two days. Which has never happened to me before, but conveniently it happens right before the big day on Tuesday!

Producing a calculator is a nice idea. However, I am puzzled.

Suppose I had deposited 9000 and used 1000 as margin on shares worth 5000 at 1:5. Margin status indicator is at

[Total funds]/([Total funds] + [Blocked funds])

= 9000/(9000 + 1000) = 90%

Margin requirement changes to 1:2. Now 2500 is need as blocked funds and so revised margin status is at

= 9000/(9000+2500) = 78.3%

I do not need to add any money if I am happy with a target margin status of 78%.

Now compare the calculator. It says I need to add 1300. What am I misunderstanding?

Or suppose I have an unprofitable position with 900 total funds and 1000 blocked funds. Margin indicator is at

0.5 [Total funds]/[Blocked funds]

= 0.5 x 900/1000 = 45%

Now I add 1500, say. Blocked funds under the new 1:2 margin requirement is 2500, and margin indicator is

0.5 x (900+1500)/2500 = 48%

But according calculator what I get for adding 1500 is only 45%.

I did yes. Only available during market opening times today. Also successfully managed to deposit funds :woman_facepalming:t2:

Ah ok thanks. During market hours I was able to use the free funds on CFD for trading, but they were not available for nor withdrawal nor transfer to INV account for me. Find it strange. Let see what happens next week. :face_with_monocle: :roll_eyes:

A sensible potential reason. If only T212 had given this kinda detail.

Does anybody know how long this increase is going to last for?

No, Iā€™m afraid not. There havenā€™t even been any rough estimates.

The change from 1:5 -> 1.2 is essentially x2.5 your blocked funds. So if you set your current margin and target margin to the same value, you will see the ā€˜resultā€™ is just x2.5 your current blocked funds.

Therefore, the increase you need is (x2.5 your blocked funds - your blocked funds.)

Some people wanted to see how much theyā€™d need for a lower margin though. So I took this resulting value, divided by the users current margin to get 1%, and multiplied by their target margin to give them their target margin percent.

There are other variables at play of course like market movement, spread etc.

In your example, youā€™re at 90% margin. Do nothing, donā€™t deposit any additional funds, and once the leverage change comes in, you will end up under 78% margin. To stay at 78% margin, you need to deposit an extra 1300. Ignoring eating into free funds but maintaining your account ratio values rather.

Richard, I often see you on this forum with great knowledge. Iā€™m a data scientist and not a financial guy at all, put together this calculator in an hour, and am happy to be given more guidance to refine it.

As I said, I put this together in no time at all. It may be beneficial to consider the value of free funds to make it more robust. It may not be needed to deposit at all. Users may have enough to cover the cash needed. This calculation could be dropped in rather than having users upload cash to maintain the status quo which may not be necessary.

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What if you have mixed stocks and commodities
Does this still apply how would I work out how much is blocked by stockā€™s

This matches @Richard.Wā€™s example. It describes what happens if you do nothing.

This contradicts the statement above. It says you need to add 1300 to get to 78%.

@Richard.Wā€™s point is that the calculator should show that you need to add 0 to ā€œend up atā€ 78% because youā€™ll already be there after the margin change.

Can you clarify what you mean by this? It may explain why the calculator result is different from @Richard.Wā€™s expectation.

Are you aware that the margin calculation is:

As you can see, there are 2 separate cases: above and below 50%. Does your calculator handle them both?

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I am a bit unclear about some of the figures shown in the app (I donā€™t use the web interface very often).

My understanding is that the ā€œBLOCKED FUNDSā€ figure is simply the sum of the margin of each position.

The margin of each position can be viewed by opening the position and going to the INFO tab.

The margin is calculated by multiplying the quantity (number of units), the current share price, the margin percentage and the exchange rate (if relevant)

Can somebody explain to me why the margin, and consequently the blocked funds, needs to reflect the current share price rather than the original share price?

Iā€™ve never understood this, so I feel like Iā€™m missing some fundamental aspect of CFDs. To me, it is counterintuitive that your blocked funds increase/decrease when your gains increase/decrease.

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This article may sum it up a little better than I could articulate of a morning:

Essentially itā€™s due to the leveraged effects on borrowed money.
Pay attention to the % differences in the article below.
In years prior - traders could lose more money than they put in their account, due to this magnified effect of leveraged borrowed money, but luckily now they stopped this for retail clients, so you can only lose what you put in. So your margin grows or shrinks in direct relation to the current stock price.

Why Is Buying Stocks on Margin Considered Risky?.

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I agree that new margin requirement is 2.5 times old one. But it is the margin slider indicator position that is important when people need to know if they need to take action. The formula to refine the calculator are in my previous answer above.

Suppose I have an unprofitable position with 900 total funds and 1000 blocked funds. Margin indicator is at

0.5 [Total funds]/[Blocked funds]

= 0.5 x 900/1000 = 45%

Suppose I add 1350, say. Blocked funds under the new 1:2 margin requirement is 2.5 times, so 2500, and margin indicator is

0.5 x (900+1350)/2500 = 45%

So addition of 1350 is sufficient to maintain same margin indicator positionā€¦ One need not add as much as 1500.

To avoid closing positions, which happens at 25%, I need to add at least 350

0.5 x (900+350)/2500 = 25%

Mind you, I am not expert in this, but so far as I have been able to deduce from previous staff posts these are the way margin indicator positions are calculated.

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It doesnā€™t makes sense, and in that article didnā€˜t answer this that the price in calculation should be the price at the moment that position opened, itā€˜s crazy they increase and decrease it, in case of increase they force you to have more money in acc and in case of decrease when the price is falling you will get a lower price before it closes automatically. Isnā€˜t this manipulation? And apart from that now I see they two different formula to calculate the margin, I mean this isnā€˜t right! 212 is playing unfair!

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:man_shrugging: Sorry canā€™t be more clear than above.
I donā€™t trade CFDā€™s so I donā€™t want to issue wrong advice & cause confusion.
Iā€™m sure a member of staff can guide you through this step by step.
Alternatively, browse this thread as I think this has been covered at some point.

@ David or @ Tony.V - will be able to clarify iā€™m sure.

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Agreed.

As I mentioned, this calculator was put together in a rush to show people how much they needed to upload to maintain the current status of their account in light of the impending changes, with regard to blocked funds and the ratios based on this.

I can absolutely refine it to show what is ā€˜sufficientā€™, this could be a better indicator.

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Again, same thing, I was working off blocked funds. So you have a given margin, you want to be at the same margin. Thatā€™s 2.5x blocked funds.

(2.5)(blocked funds of 1000) - (blocked funds of 1000) = 1500.

Again, I can add in some refinement here. I need to have my breakfast first though :wink:

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