Our system of tiered margining on CFDs enables clients to benefit from our lowest margins on the majority of positions.
What is tiered margining?
Tiered margining enables us to set margin rates that reflect and best fit the size of your aggregate position in a particular market. The majority of positions will attract our lowest margin rates, reflecting the liquidity of the market at smaller deal sizes. The largest positions may require a higher margin, as it is more difficult to trade out of these positions quickly.
How does it work?
Your initial margin will be determined using a table of four incremental tiers. The margin rate will increase progressively as your aggregate position moves up from one tier to the next. However, only the portion of your position that falls into a higher tier will be subject to its increased margin rate.
The range of the four tiers differs to suit each market, and the margin rate varies according to the type of account you hold.
Example: tiered margining for ANZ shares
The table below shows how tiered margining applies to ANZ shares.
|Tier 1||Tier 2||Tier 3||Tier 4|
|Position size (shares)||Up to 40,000||40,001-240,000||240,001-5,500,000||5,500,000+|
As a Trader or Select account holder, if you hold a CFD position of 30,000 ANZ shares, your initial margin will be 5%.
If you are a Trader Account holder with a 50,000 ANZ shares position, your initial margin will be determined as follows:
- 40,000 at 5% (Tier 1)
- 10,000 at 20% (Tier 2)
This equates to a weighted average margin rate of 8.0%, which is significantly lower than the outlay required for an equivalent share purchase in the underlying market.
A full list of affected markets and their applicable margin tiers can be found below.
You can find the Tiered Margin reqiurements from the Get Info dropdown section within each market in our trading platform.
Remember that the size of your overall position, and not the level of the initial margin, dictates your profit and loss. It is possible for losses to exceed your initial margin.
* For the purposes of Tiered Margining, your aggregate position includes your non-Controlled Risk open positions and orders to open.