In spread betting,
margin refers to the deposit you need to put down to open a position - it's essentially a "good faith" deposit rather than the full value of your trade.
How Margin Works
Margin requirement is typically expressed as a percentage. For example:
- If a spread betting provider requires 5% margin on FTSE 100
- And you want a position worth £10,000
- You'd only need to deposit £500 (5% of £10,000)
Key Points About Margin
Initial Margin: The amount needed to open a position
Maintenance Margin: The minimum balance required to keep a position open
Margin Call: When your account balance falls below the maintenance margin, requiring additional funds
Margin Requirements Vary By:
- Asset type (shares typically 20%, indices 5-10%, forex 3-5%)
- Volatility (more volatile assets require higher margins)
- Account size (larger accounts may get preferential rates)
Reputable UK Spread Betting Providers
- IG Group: Market leader with competitive margin rates
- CMC Markets: Known for tight spreads and reasonable margins
- City Index: Offers margin rates from 3.33%
- Spreadex: Good for sports spread betting
- ETX Capital: Competitive margins on major indices
Risk Warning
Margin amplifies both profits and losses. You can lose more than your initial deposit, so always use stop losses and risk management tools provided by licensed operators.