CFDs Market Information

Contracts

Cash Contracts

Cash contracts provide a cost-effective solution for short to medium term trading. They do not have an expiry date.  An overnight financing rate is applied for every night that you hold a position open. Because you have only a small percentage of the full value of the trade as margin on deposit, your account incurs a debit or credit for each day that the position is held overnight. Similar to a mortgage on a property, you can put down a deposit and the rest remaining balance you can pay for with an interest only loan from the bank.  In the event of a corporate action or dividend being applied to the underlying market, a cash adjustment may be made to the account to reflect this redistribution of cash. A haircut may be applied to the value of this cash adjustment.

Future Contracts

Futures contracts will expire at a future date.  The price is derived from the relevant underlying product or a related future and will factor in the cost of carry to the expiry date.  No overnight finance charges will therefore be applied to positions held overnight.  Relevant interest rate levels and time to expiry are the key determinants of the cost-of-carry that will be factored into the future contract price.  In the case of equity related futures, we may apply a cash adjustment in the event of corporate actions or dividend payments during the life of the contract to reflect this redistribution of cash if it has not been discounted in the future contract’s price.  A haircut may be applied to this adjustment dependant on several factors for example applicable tax rates, clearing cost to process dividend payments etc. The future contract can be closed at any time before it expires, just as you can with a Cash contract.

General notes

i) All details are correct at time of going to press.
ii) London Capital Group Ltd reserves the right to alter the contract specifications at anytime and to widen spreads in times of excessive market volatility.
iii) All times stated are UK times.

Automatic Stop Loss Order

We will automatically assign a stop loss order to every trade placed on your account. This stop loss is based on 80% of the Initial Margin that is applied to the trade. For instance, if you have £2000 in your account and you trade the UK100 Rolling Daily at £10 per point, the system will automatically allocate a stop loss 120 points away (because the maximum Initial Margin for the UK100 Rolling Daily is 150 and 80% of 150 is 120). You would also have £500 remaining as available funds on your account. Alternatively, if there are insufficient trading resources to cover the maximum Initial Margin, the system will allocate the stop level based upon 80% of the amount that was taken as Initial Margin, which would be the total trading resources available on your account. You may amend your stop loss to whatever level you desire, subject to the minimum stop loss distance for each market and the margin requirements. Although the automatic stop loss does go some way towards limiting your risk on your open trades, you must be aware that all orders including stop losses are subject to slippage and market gaps unless you specify for your stop loss to be guaranteed. The minimum and maximum Initial Margin requirements vary depending on the market.

Initial Margin (IM)

The Initial Margin is the amount of unencumbered trading resources required to open each trade. The minimum IM is the minimum Initial Margin required to open a particular trade. You can calculate the minimum level of funds required to open a new position by multiplying the minimum IM by your stake. For example, the current minimum IM for the UK 100 Index Future is 30, therefore if you wish to trade £5 per point you need a minimum of £150 available funds on your account (30 x 5 = 150). The minimum IM varies depending upon the market.

Guaranteed Stop Orders

Capital Spreads offers Guaranteed Stop Orders. With Guaranteed Stop Orders you can trade safe in the knowledge that, should a market gap through your stop level, you will not suffer any extra losses from the slippage and you will be stopped out at the level you requested. As Guaranteed Stop Orders are a form of insurance against market gaps, they come at a small extra cost. Firstly, there's a premium you have to pay for selecting your mandatory Stop to be guaranteed and secondly, it needs to be placed further away from your entry level than if it was a non-guaranteed Stop. When instructing us to attach a Guaranteed Stop Order to an existing open position, an opening trade, or a new order, we will charge a premium by executing a cash debit to your account. Opting for your Stop to be guaranteed will also recalculate the minimum distance away from your opening trade.
Further details of the premiums and minimum distances can be found in the Market information tables.
Capital Spreads will not quote any markets outside of its opening hours which are generally Sunday 22:00 to Friday 21:15, UK time.

Limited Risk Accounts

Capital Spreads offer Limited Risk accounts. A Limited Risk account helps minimise the risks of trading by associating a Guaranteed Stop Order with all your opening positions. Depending on your level of experience and financial situation you may be steered towards this account when you apply. Once you have some experience you can always contact Customer Support to request to swap your account to a standard account which means you will have the option of placing Guaranteed Stop Orders if you wish but these will not be mandatory.
As mandatory Guaranteed Stop Orders are essentially a form of insurance against market gaps, they come at a small cost. This premium will be debited from your account when you place a trade. You should also note that by opting for a Limited Risk Account your Stop will need to be placed further away from your entry level than if you selected a standard account where Guaranteed Stop Orders are not mandatory.

Short Selling Restrictions

Please be advised that various regulators have imposed short selling restrictions on a small number of the equity markets we quote. This means that you are not allowed to hold sell positions in these markets. Whilst we will attempt to keep you informed of the changes imposed by the regulators, please understand that it is your responsibility to know which shares you can and cannot short.
If you place a trade in contravention to these restrictions we may, solely at our discretion, close any such position without notice to you. We will close positions at either the current quote or at the entry level plus our spread. You will be liable for any loss you might incur as a result of such an action by us and you may also be liable to action taken by the regulator due to your contravention of said regulations.
If you do have a specific query about an individual share, please check with the relevant exchange or you can contact our dealing team who will endeavour to assist you.