Customisable margin
Dial your leverage up or down.
Margin is a powerful tool that allows you to invest without tying up large percentages of your own capital. We offer a flexible approach to margin when you trade CFDs with CMC Markets. Gone are the days of being forced to take on a fixed margin rate - now you can choose how much you want to borrow, if anything, for each position. You can easily dial up or down the amount you’d like to borrow from us for each transaction. You can invest using no leverage (you fund the whole position), or invest with full leverage, the decision is yours.
For longer term investments it sometimes makes sense to use a lower financing rate and use more of your own money, this has the benefit of lowering your overnight holding costs. If you choose to outlay the entire amount of the position (financing rate of 0%) the financing cost will be zero.
Overnight financing costs
Holding costs apply only to the borrowed amount, not the total position size. When it comes to costs, we provide complete transparency, with holding costs charged daily and visible within the account history just after 17:00 New York time. You can view these costs in the Account menu under History. Click on the icon next to Trade finance, see image below, to view a full breakdown of costs.
Example of a CFD trade
Buy example
Buy one CFD on the UK100 at a price of 6000.00. The default financing level is at 99%, meaning you only have to put forward 1% of the total size of the position as initial margin.
Total Exposure = Price x Number of CFDs
Total Exposure = 6000.00 x 1
Total Exposure = £6,000
Initial Margin = Total Exposure x Margin
Initial Margin = £6,000 x 1%
Initial Margin = £60
Therefore, for a £60 deposit, you will control a £6,000 position. Your profit or loss will be relative to the total position size and is not limited to the £60 initial margin.
You have effectively borrowed £5,940 from CMC Markets to fund this trade, therefore you will incur a daily borrowing cost on this amount if you hold the position after 17.00pm New York time.
Buy example
You decide to lower your risk by borrowing less to open this trade. Again you decide to buy one CFD on the UK100 at 6000.00, but this time you dial down the financing level to 80%. This means that you will put forward 20% of the total size of the position as initial margin.
Total Exposure = Price x Number of CFDs
Total Exposure = 6000.00 x 1
Total Exposure = £6,000
Initial Margin = Total Exposure x Margin
Initial Margin = £6,000 x 20%
Initial Margin = £1,200
Therefore, for a £1,200 deposit you will still control a £6,000 position. Your profit or loss will be relative to the total position size and is not limited to the £1,200 initial margin.
You have now effectively only borrowed £4,800 to open this trade, therefore you will incur a daily borrowing cost on this amount if you hold the position after 17.00pm New York time.
Sell example
Sell 800 CFDs in UK company QWE, at £10.00. The default financing level is at 95%, meaning you only have to put forward 5% of the total size of the position as initial margin.
Total Exposure = Price x Number of CFDs
Total Exposure = £10.00 x 800
Total Exposure = £8,000
Initial Margin = Total Exposure x Margin
Initial Margin = £8,000 x 5%
Initial Margin = £400
Therefore, for a £400 deposit you will control an £8,000 position. Your profit or loss will be relative to the total position size and is not limited to the £400 initial margin.
You have effectively borrowed £7,600 to open this trade, therefore you will incur a daily borrowing cost on this amount if you hold the position open after 17.00pm New York time.
Sell example
You decide to lower your risk by borrowing less to open this trade. Again you decide to Sell 800 CFDs in UK Company QWE, at £10.00, but this time you dial down the financing level to 50%. This means that you will put forward 50% of the total size of the position as initial margin.
Total Exposure = Price x Number of CFDs
Total Exposure = £10.00 x 800
Total Exposure = £8,000
Initial Margin = Total Exposure x Margin
Initial Margin = £8,000 x 50%
Initial Margin = £4,000
Therefore, for a £4,000 deposit you will control an £8,000 position. Your profit or loss will be relative to the total position size and is not limited to the £4,000 initial margin.
You have effectively borrowed £4,000 to open this trade, therefore you will incur a daily borrowing cost on this amount if you hold the position after 17.00 New York time.