Urgent - Spread Betting & FX Government Intervention - Last Chance

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Jason101

Well-known member
Oct 9, 2008
1,357
212
73
#1
The Government (FCA) want to change the law on Spread Betting/CFD's and FX trading. This could mean a ten-fold increase in the margin required to open a position.
The government want to hear your view by the 7th March. This is your last chance to have your say.

They want to change the Required Margins, these changes mean for example that a £10 FTSE bet:

Current margin requirement: £355 margin (0.5% x 10 x 7100)

Proposed margin:

-Clients with more than 12 months’ trading experience: £1775 margin (2.5% x 10 x 7100) and..
-Clients with less than 12 months’ trading experience: £3550 margin (5% x 10 x 7100)

The FCA has produced a quick online form, for you to have your say, here is the link:

https://www.fca.org.uk/cp16-40-response-form

Don't complain about any changes made if you haven't bothered to let them know.
Under the question what company are you from put N/A if you are a retail trader and you don't have to answer all questions.

To have to load my account up with 5-10x the account size to achieve the same results seems excessive to me.
One of my objections is that this will mean the spread bet companies will hold on to more of your money than ever before.
 

troyresearch

Active member
Jan 15, 2001
132
0
26
#3
I couldn't think of which thread to add these comments to, but this seemed like the most appropriate.

Regulatory intervention is required on the practice of temporarily adjusting margin requirements (often x 2, x 3) around event risk.

I accept that CFD / SB providers should be able to manage commercial and market risk.

But the current practice of hiking margin requirements, usually with just a few days' notice, could prove devastating for some clients. Furthermore, these ad hoc changes are becoming increasingly common.

While there's a wholly legitimate, but separate, discussion to be had about managing margin exposure, this practice does need either some change by the industry or regulatory intervention, should that fail.

Margin is just another form of lending - a highly regulated area. Imagine if a bank or credit card company trebled its rate of interest for a period, and provided you with less than the 30 days which the current regulatory environment requires?
 
Apr 3, 2017
3,620
136
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#4
How will these affect options?


Option bought are full price paid , what if you do spreads?