someone plz explaion this to me. i'm such a newbie

C

cashclay

I TRYING TO FIND OUT THE leverage that IB offers for CFDS and this is what they say.please remember i know nothin about the lingo. thank you
Initial Margin Maintenance Margin
IB Share CFDs 1.25 x Maintenance Margin Risk-based calculation described below (minimum 10%)


IB Maintenance and Initial Margin Requirements for IB Share CFDs
IB establishes a risk-based margin for each CFD individually, based on the observed historical volatility of the underlying share. Specifically, IB calculates five historical standard deviations to determine the standard maintenance margin, subject to a minimum margin of 10% (without correlation-based off-sets). The resultant margin rates apply position by position. In the vast majority of cases the minimum margin of 10% is applied.

The following house charges may apply in addition to standard margins:

  • Large Position Charge - If a position is greater than the equivalent of 0.5% of the market capitalization of a share, a large position charge applies. The required margin grows linearly from the risk-based margin to 100% when the share of market capitalization grows from 0.5% to 2%.
  • Short Cheap Stock Charge - A short cheap stock charge is applied for short CFDs on shares with market capitalizations below $500 million. The required margin grows linearly from 30% to 100% as the market capitalization decreases from $500 to $250 million. For market capitalizations between $250 and $100 million, the required margin is 100%, subject to a minimum of $2.50.
 
what does the 1.25 x maintence margin risk talking about. most brokers are very direct," ill give you 10 to 12 xs the leverage. end of the sotry. wtf is is thsi all about
 
I think maintenance margin is defined by your broker for each security. Maintenance margin IMHO is minimum funding required to hold overnight. Multiply that amount by 1.25 and you get your margin call. Meaning that if, while holding a position, your account value drops below that number then your broker liquidate your position.
 
Uh ... I take it this way.
It tells you the number of contracts per margin requirement.
If you have a 10k account and that number tells you margin is 1K.
Then you can take 10 contracts of that securitie since 10K / 1K = 10.
 
Why don't you just call them? They are likely to offer lower leverage then you get now but with lower comm.
 
Because only use small capital usually I am use high leverage 1:400 in my account, my capital usually less than one hundred dollar and use high leveage help me to making many times trading order
 
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