MARGIN REQUIREMENTS AT CFDS

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A risk-based margin requirement is determined individually for each CFD based on the observed historical volatility of the underlying stock. More specifically, five historical standard deviations based on 30 days of historical price data are calculated to determine the standard minimum margin, subject to a minimum margin of 10% (excluding correlation-based offsets). The resulting margin requirements are applied position by position (per position). In most cases, a minimum margin requirement of 20% is applied.

In certain cases, IB may, at its sole discretion, apply special margin rates to individual CFDs that are higher than the rates determined using the standard methodology.

The following in-house margin requirements may apply in addition to the standard margin requirements:

• Charges for large positions: If you hold a position that exceeds 0.5% of the market capitalization of the stock, a large position fee will be charged. The margin requirement increases linearly to 100% when the share of market capitalization increases from 0.5% to 2%.
• Costs for short positions for low-priced stocks: An additional fee is charged for short positions in CFDs on stocks with a market capitalization of less than USD 500 million. The margin requirement increases linearly from 30% to 100% when the market capitalization decreases from USD 500 million to USD 250 million. For market capitalization between USD 250 million and USD 100 million, the margin requirement is 100%, subject to a minimum fee of USD 2.50.

In cases where a portfolio consists of a small number of CFD positions or if the two largest positions have a dominant weight, a concentration fee will be applied instead of the standard minimum margin requirement described above.

IB performs a stress test on the portfolio by inducing a drawdown equal to 30% on the two largest positions and 5% on the remaining positions. The total loss is used as the minimum margin requirement if it is greater than the standard requirement.

The initial deposit is composed of the minimum deposit + 10%.

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The following minimum margin requirements apply to index CFDs:

• The overnight minimum deposit for the connected future, adjusted according to size.
• Subject to an overall minimum of 5% or 5 historical standard deviations, the higher value shall apply.
• The resulting requirement is reduced by 50% during the liquid trading hours of the linked future. The full application of the margin requirement begins 15 minutes before the end of liquid trading hours.

Note

* Significant currency pairs are all combinations consisting of the following currencies: USD, EUR, JPY, GBP, CAD and CHF. Other combinations are for example: AUD.USD, SGD.CNH.

Are you a retail client and would like to be reclassified as a professional client? Please log in to the client portal and follow the path > Settings > Account settings > MiFID client category (Gear).