CFD Help

[Kryzz]

Just curious regarding CFD's and margin requirements etc. For example, if i go long with 1000 OXR CFD's at 2.50, that would equal $2,500, at a 5% margin, the initial margin required would be $125 plus any fees etc.

Say i have $250 in my account, $125 of which is now gone, if the share price moves against me to 2.30, do i actually have to pay any money out of my account, or just have enough money to cover that amount. so .20 x 1000 cfds =$200, as i only have $125 in my account, i am $75 short. So i would have to deposit an exta $75 into my account to have enough to cover the price change, is this a 'margin call'? So would the $200 stay in my account or would it have to be paid somewhere, is my main question.

Thanks in advance.

 

[Trembling Hand]

In the above example you will most likely be liquidated before your account goes negative.

 

[ThingyMajiggy]

They would let you know a fair few times, then you would either sell part of your position to cover the requirement....or as you say pay some money into your account yourself. But they usually have a minimum amount you can have in your account anyway, so they might exit you out if you dip below it long enough with no action being taken.