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You may be aware that ESMA (European Securities and Markets Authority) has announced major changes that will be implemented on the 1st August 2018. These changes will last for a period of 3 months from the 1st August 2018, and may be extended for a further 3 months. The changes will have a substantial impact on your trading with ICM Capital.

ICM Capital has a long standing tradition of keeping our clients fully up to date and well informed in an open and transparent manner. We have therefore summarised below the key changes that ESMA has announced that will apply to all CFD brokers in Europe, including ICM Capital.

  • Leverage limits on the opening of a position between 30:1, and 2:1; depending on the price volatility of the underlying asset.
    • 30:1 Major currency pairs;
    • 20:1 Non-major currency pairs, gold and major indices;
    • 10:1 Commodities other than gold and non-major equity indices;
    • 5:1 Individual equities and other reference values;
    • 2:1 Cryptocurrencies
  • A 50% margin close out rule applied on account, which means that as soon as a client’s equity reaches 50% of the used margin, all open positions will be automatically stopped out.
  • A ban on applying credit bonuses on retail accounts, as well as any other monetary and/or non-monetary benefits paid to retail clients (apart from research and information tools).

If you would like to read the full ESMA publication on its product intervention measures then please click here

How will it impact me?

As a result of the changes effective from 1st August 2018, there are potential risks you should be aware of, and these are the following:

  1. The margin required for most instruments will be increased for your existing and new positions, for example if you are 1 lot (contract size 100,000) long on Major FX e.g. EURUSD and the current margin required is approx. 500 EUR as of 1st August 2018 that would be increased to approx. 3300 EUR 
  2. Your MT4 account may be subject to automatic stop outs of your open positions, if your equity falls below 50% of your required margin; and
  3. New orders may be rejected due to insufficient funds on your MT4 account.

You may want to consider adjusting your trading strategies or ensuring that your have enough funds on your account by 1st August 2018.

If you would like to enquire further then you can contact our Client Services team at ICM Capital.

Disclaimer
ICM Capital will not and cannot be held liable for any actions you take as a result of anything you read here. ICM Capital does not provide personal investment advice and is not authorised to conduct such an activity. All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, expressed or implied herein, are for informational purposes only and should not be construed as personal investment advice. Conduct your own due diligence, or consult an authorised financial advisor before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.

CFD’s and Spot FX are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.45% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs and Spot FX work, and whether you can afford to take the high risk of losing your money. Read More
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