Trading 212 Increase Margin Requirements - gintherskillart

Trading 212 Increase Allowance Requirements

UK-based online brokerage, Trading 212, has announced a significant change to its margin requirements along stock CFDs. The procession to 50% margin will have a destructive impact on many trading portfolios. Find out how to prepare and any future considerations.

What's Dynamical?

On Tuesday 1st December, at 14:30 GMT, Trading 212 testament temporarily raise its margin requirements for whol stock CFDs to 50%. This means that existing leverage will decrease to 1:2. Those with open positions may see the automatic closure of one OR more of their positions if they Don River't have sufficient free funds.

The agent claims that the change is to help protect itself against turbulent market conditions. All the same, whilst Trading 212 is able to change border rates at its discretion, the move will rear eyebrows among traders and industry onlookers referable the serious negative impact information technology May have on some clients.

Who's Affected?

The change will affect blocked funds and free funds in trading accounts. It also affects margin position, i.e. the percentage that causes margin calls at 45% and position closures at 25% will personify slashed.

The change only applies to stocks and CFD accounts. Other assets such as commodities, indices and forex in the Invest or ISA accounts are not affected. The value of a trader's turn a profit/exit is also non stirred, but if any positions are squinting arsenic a result of the changes, then P/L will be reflected in free funds.

What To Do Adjacent

You can calculate how more than you will need to stay fresh your positions open after the margin requirements increment. Leverage is decreasing to 1:2, which means margin requirements wish be 50% (you therefore need 50% of the total evaluate of the trade order to guarantee your position). Trading 212 explains how to calculate this here.

Trading 212 clients have also shared a calculator on the forum (for stocks only) which calculates how much money traders will need to top up their CFD accounts. Note that while the calculator is non official, it may help traders understand the changes.

Last Word

The announcement has seminal fluid as a shock to Trading 212 clients, with many concerned about the lack of appropriate warning. Furthermore, some traders may non have enough pecuniary resource to cover up the decrease in leverage if they indirect request to keep their positions open. As a result, the move may make some consider closing their Trading 212 accounts and looking elsewhere. And with many leading online brokers offering CFDs on stocks with competitive trading conditions, critics will argue this isn't Trading 212's finest hr.

Trading 212 Offer a unfeignedly mobile trading experience. With tight spreads and a large grasp of markets, they offer a dynamic and detailed trading environment. Recent customer care issues suffer severely damaged the report of the brand.

Trading 212 Provide a really mobile trading experience. With tight spreads and a huge range of markets, they offer a dynamic and elaborate trading environment. Recent customer maintenance issues have severely crumpled the reputation of the brand.

November 30, 2020 by DayTrading.com