Customers who hold open positions could become liable to pay
margin. Margin is calculated using the formulae detailed in clause
17.1 of our Terms of Service.
For your guidance, here are some worked examples using these
formulae. The first example shows the account will come onto margin
call immediately on any adverse market movement. In view of this,
we politely suggest that a Standard Account holder lodge with us an
additional 25% more than the Margin Requirement if they
choose not to restrict their losses by using Guaranteed Stop
Losses.
Example - Margin with regard to a Financial Spread
Betting Account
Mrs B has a Standard Account with TD Waterhouse Financial
Spread Betting and therefore must deposit sufficient funds before
she trades. Mrs B has deposited a £2,500 cash balance.
Should Mrs B open a position of £10 per point of the UK 100
Rolling Index, she will be entering into a position attracting a
Margin Requirement of £2,500 (£250 x stake).
Should Mrs B’s position deteriorate to the extent that, marked
to market, her open position was incurring losses of £600, Mrs B
would require an additional £600 to cover her margin call.
This is calculated as follows:
|
Cash Balance:
Open Position Losses:
Margin Requirement:
Total Position:
|
£2,500
(£600)
(£2,500)
(£600)
|
Margin and payments Explained
The Total Position of an account determines if a margin
payment is required. A positive Total Position determines the
available funds on the account as available margin. If the Total
Position is negative, funds are required immediately. Positions may
be reduced or additional funds paid to settle the margin call. It
may also be possible to place Stop Losses on certain positions to
reduce the risk and therefore Margin Requirement. Please be aware
that each individual position opened requires a Margin
Requirement.
Please note that it is the responsibility of you the customer,
and not TD Waterhouse Financial Spread Betting, to monitor your
positions and make margin payments to TD Waterhouse Financial
Spread Betting immediately upon margin becoming due.
Margin calls may be made at any time in accordance with clause
17 of our Terms of Service, please pay particular attention to the
entire section.
Margin payments in excess of £10,000 are required by
electronic methods for same day transfer, please refer to clause 17
of our Terms of Service. Customers who send cheques to TD
Waterhouse Financial Spread Betting are able to use these funds to
trade once the cheque has cleared. Cheques can only be used to
cover margin calls below the value of £10,000 and will be credited
once cleared into our bank account. Margin payments in excess of
£10,000 will be required by electronic method for same day
transfers.
Please be aware that if margin payments are not received in
full within 3 business days of a margin call being made, TD
Waterhouse Financial Spread Betting may without notice to you and
in its absolute discretion close any, or all, in whole, or in part,
of your open positions.
TD Waterhouse Financial Spread Betting normally makes margin
calls upon customers by telephone. It is the policy of TD
Waterhouse Financial Spread Betting not to disclose our Company
name or the nature of the call (except that it is a personal call)
when attempting to contact customers by telephone, however we
reserve the right to leave a detailed message, including our
Company name, should we wish to do so.