Futures brokers uk

Posted: Seva Manager Date: 20.06.2017

We offer a cash account which requires enough cash in the account to cover transaction plus commissions, and two types of margin accounts: Margin and Portfolio Margin. New customers must select an account type during the application process and can upgrade or downgrade their account type at any time.

A Portfolio Margin account can provide lower margin requirements than a Margin account. However, for a portfolio with concentrated risk, the requirements under Portfolio Margin may be greater than those under Margin, as the true economic risk behind the portfolio may not be adequately accounted for under the static Reg T calculations used for Margin accounts.

Customers can compare their current Reg T margin requirements for their portfolio with those current projected under Portfolio Margin rules by clicking the Try PM button from the Account Window in Trader Workstation demo or customer account. We also offer an IRA Margin account, which allows you to immediately trade on your proceeds of sales rather than waiting for your sale to settle.

You can trade assets in multiple currencies and trade limited option spread combinations. IRA margin accounts have certain restrictions compared to regular margin accounts and borrowing is never allowed in an IRA account.

Futures trading in an IRA margin account is subject to substantially higher margin requirements than in a non-IRA margin account. Margin rates in an IRA margin account may meet or exceed three times the overnight futures margin requirement imposed in a non-IRA margin account 1. Requirements and supported products for each of these accounts are detailed in the Account Types section on the Choosing and Configuring Your Account page on our website.

Margin has a different meaning for securities versus commodities. For securities, margin is the amount of cash a client borrows. For commodities, margin is the amount of cash a client must put up as collateral to support a futures contract.

For securities, the definition of margin includes three important concepts: The Margin Loan is the amount of money that an investor borrows from his broker to buy securities.

The Margin Deposit is the amount of equity contributed by the investor toward the purchase of securities in a margin account. The Margin Requirement is the minimum amount that a customer must deposit and it is commonly expressed as a percent of the current market value.

The Margin Deposit can be greater than or equal to the Margin Requirement. We can express this as an equation:.

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Borrowing money to purchase securities is known as "buying on margin". When an investor borrows money from his broker to buy a stock, he must open a margin account with his broker, sign a related agreement and abide by the broker's margin requirements.

The loan in the account is collateralized by investor's securities and cash. If the value of the stock drops too much, the investor must deposit more cash in his account, or sell a portion of the stock. The Federal Reserve Board and self-regulatory organizations SROssuch as the New York Stock Exchange and FINRA, have clear rules regarding margin trading.

In the United States, the Fed's Regulation T allows investors to borrow up to 50 percent of the price of the securities to be purchased on margin. The percentage of the purchase price of securities that an investor must pay for is called the initial margin.

To buy securities on margin, the investor must first deposit enough cash or eligible securities with a broker to meet the initial margin requirement for that purchase. Once an investor has started buying a stock on margin, the NYSE and FINRA require that a minimum amount of equity be maintained in the investor's margin account. This is called the maintenance margin. When the balance in the margin account falls below the maintenance requirement, the broker can issue a margin call requiring the investor to deposit more cash, or the broker can liquidate the position.

Brokers also set their own minimum margin requirements called "house requirements". Some brokers extend more lenient lending conditions than others and lending terms may also vary from one client to the other but brokers must always operate within the parameters of margin requirements set by regulators. Not all securities can be bought on margin. Buying on margin is a double-edged sword that can translate into bigger gains or bigger losses.

In volatile markets, investors who borrowed from their brokers may need to provide additional cash if the price of a stock drops too much for those who bought on margin or rallies too much for those who shorted a stock. In such cases, brokers are also allowed to liquidate a position, even without informing the investor. Real-time position monitoring is a crucial tool when buying on margin or shorting a stock.

Commodities margin is the amount of equity contributed by an investor to support a futures contract. This can be expressed as a simple equation:. Margin requirements for futures and futures options are established by each exchange through a calculation algorithm known as SPAN margining.

SPAN Standard Portfolio Analysis of Risk evaluates overall portfolio risk by calculating the worst possible loss that a portfolio of derivative and physical instruments might reasonably incur over a specified time period typically one trading day. This is done by computing the gains and losses that the portfolio would incur under different market conditions.

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The most important part how to buy a stock on scottrade the SPAN methodology is the SPAN risk array, a set of numeric values that indicate how a particular contract will gain or lose value under various conditions.

Each condition is called a risk scenario. The numeric value for each risk scenario represents the gain or loss that that particular contract will 5 minute trading binary options youtube system for a particular combination of price or underlying price change, volatility change, and decrease in time to expiration.

Just like securities, commodities have required initial and maintenance margins.

These are typically set by the individual exchanges as a percentage of the current value of a futures contract, based on the volatility and price of the contract. The initial margin requirement for a futures contract is the amount of money you must put up as collateral to open position on the contract. To be able to buy a futures contract, you must meet the initial margin requirement, which means that you must deposit or already have that amount of money in your account. Maintenance margin for commodities is the amount that you must maintain in your account to support the futures contract and represents the lowest level to which your account can drop before you must deposit additional funds.

Commodities positions are marked to market daily, with your account adjusted for any profit or loss that occurs. Because the price of underlying commodities fluctuates, it is possible that the value of the commodity may decline to the point at which your account balance falls below the required maintenance margin.

If this happens, brokers typically make a margin call, which means you must deposit additional funds to meet the margin requirement. We use real-time margining to allow you to see your trading risk at any moment of the day.

Our real-time margin system applies margin requirements throughout the day to new trades and trades already on the books and enforces initial margin requirements at the end of the day, with real-time liquidation of positions instead of delayed margin calls. This system allows us to making money plants vs zombies ipad our low commissions because we do not have to spread the cost of credit losses to customers in the form of higher costs.

The Account Window in Trader Workstation demo or customer account shows your margin requirements at any time. Securities and Exchange Commission SEC and a futures account governed by rules of the U. Commodity Futures Trading Commission CFTC.

futures brokers uk

Whether you have assets in a securities account or in a futures account, your assets are protected by U. In the securities account, your assets are protected by SEC and SIPC rules. In the futures account, your assets are protected by CFTC rules requiring segregation of customer funds. You are also protected by our strong financial position and our conservative risk management philosophy. As part of the Universal Account service, we are authorized to automatically transfer funds as necessary between your securities account and your futures account in order to satisfy margin requirements in either account.

You can configure how you want us to handle the transfer of excess funds between accounts on the Excess Funds Sweep page in Account Management: Margin requirements for each underlying are listed on the appropriate exchange site for the contract.

futures brokers uk

Such systems are less comprehensive when considering large moves in the price of the underlying stock or future. This 'Extreme Margin Model' may increase the margin requirement for portfolios with net short options positions, and is particularly sensitive to short positions in far out-of-the-money options.

We also apply a concentrated margining requirement to Margin accounts. If the concentrated margining requirement exceeds that of the standard rules based margin required, then the newly calculated concentrated margin requirement will be applied to the account.

If you sell a security short, you must futures brokers uk sufficient equity in your account to cover any fees associated with borrowing the security. If you borrow the security through us, we will borrow the security on your behalf and your account must have sufficient collateral to cover the margin requirements of the short sale.

In instances in which the security shorted is hard to borrow, borrowing fees charged by the lender may be so high greater than the interest earned that the short seller must pay additional interest for the privilege of borrowing a security.

Customers may view the indicative short stock interest rates for a specific stock through the Short Stock SLB Availability tool located in the Tools section of their Account Management page. For more information concerning shorting stocks and associated fees, visit our Stock Shorting page.

IB SMInteractiveBrokers. Supporting documentation for any claims and statistical information will be provided upon request. Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations. The risk of loss in online trading best binary options by rating stocks, options, futures, forex, foreign equities, and bonds can be substantial.

Options involve risk and are not suitable for all investors. Before investing in options, read the "Characteristics and Risks of Standardized Options". For a copy visit http: Before trading, clients must read the relevant risk disclosure statements on our Warnings and Disclosures page - http: Trading on margin is only for sophisticated investors with high risk tolerance.

You may lose more than your initial investment. For additional information regarding margin loan rates, see http: Security futures involve a high degree of risk and are not suitable for all investors. The amount you may lose may be greater than your initial investment.

Before trading security futures, read the Security Futures Risk Disclosure Statement. There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays.

When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets. One Pickwick Plaza, Greenwich, CT USA www. Is a member of the Investment Industry Regulatory Organization of Canada IIROC and Member - Canadian Investor Protection Fund.

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Trading of securities and derivatives may involve a high degree of risk and investors should be prepared for the risk of losing their entire investment and losing further amounts. Interactive Brokers Canada Inc. Level 40, Grosvenor Place, George Street, SydneyNew South Wales, Australia.

futures brokers uk

LIMITED is authorised and regulated by the Financial Conduct Authority. FCA register entry number Level 20 Heron Tower, Bishopsgate, London EC2N 4AY www. SuiteTwo Pacific Place, 88 Queensway, Admiralty, Hong Kong SAR www.

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Margin Accounts We offer a cash account which requires enough cash in the account to cover transaction plus commissions, and two types of margin accounts: Securities Margin Definition For securities, the definition of margin includes three important concepts: We can express this as an equation: Securities Initial and Maintenance Margin The Federal Reserve Board and self-regulatory organizations SROssuch as the New York Stock Exchange and FINRA, have clear rules regarding margin trading.

Commodities Margin Definition Commodities margin is the amount of equity contributed by an investor to support a futures contract. This can be expressed as a simple equation: Commodities Initial and Maintenance Margin Just like securities, commodities have required initial and maintenance margins.

Real-Time Margining We use real-time margining to allow you to see your trading risk at any moment of the day. Margin Calculation Basis Available Products Rule-Based Margin System: Predefined and static calculations are applied to each position or predefined groups of positions "strategies". US stocks, index options, stock options, single stock futures, and mutual funds.

Forex; bonds; Canadian, European, and Asian stocks; and Canadian stock options and index options. Exchanges consider the maximum one day risk on all the positions in a complete portfolio, or subportfolio together for example, a future and all the options delivering that future. All futures and future options in any account. Disclosures Futures trading in a SIPP Cash account opened with Interactive Brokers U.

Limited is also subject to substantially higher margin requirements than in a non-SIPP account. In the interest of ensuring the continued safety of its clients, the broker may modify certain margin policies to adjust for unprecedented volatility in financial markets. The changes will promote reduction of leverage in client portfolios and help ensure that clients' accounts are appropriately capitalized.

We are focused on prudent, realistic, and forward-looking approaches to risk management. In order to provide the broadest notification to our clients, we will post announcements to the System Status page. We strongly encourage all clients to monitor this web page for advance alerts regarding margin policy changes.

Note that the credit check for order entry always considers the initial margin of existing positions. Among other things, Interactive may calculate its own index values, Exchange Traded Fund values or derivatives values, and Interactive may value securities or futures or other investment products based on bid price, offer price, last sale price, midpoint or using some other method.

Interactive may use a valuation methodology that is more conservative than the marketplace as a whole. Due to regulatory restrictions, Interactive Brokers does not currently offer margin lending to natural persons who are residents of Australia.

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