General
Do you offer fixed or variable spreads?
We don’t offer fixed spreads as we never interfere with market forces or client orders. As such, all products tradable on our platforms are variable spreads.
What are swaps, and what is the difference between positive and negative swaps?
A forex contract expires every two days. Instead of actual delivery of the underlying asset, many traders and investors will ‘rollover’ the contract to extend its trading period. It’s upon this ‘rollover’ that swaps are earned or incurred by the holder of a forex contract. The swap rate is calculated as the interest rate difference between the two nations issuing the currency, and are added to, or subtracted, from the profit and loss for the contract.
A positive swap is where you earn interest from the contract, and a negative swap is where you incur interest on the contract.
For a more detailed explanation, including examples, please see our swap rates page.
What is leverage and how does it affect my account?
As the name suggests, the term “Leverage” was coined because using leverage allows you to trade positions sizes with a fraction of the capital that would be normally be required to trade that specific market.
Leverage allows you to do this by reducing the amount of margin required for each position opened. The higher the leverage you have set the less capital margin you are required to have in your account to place a trade. To learn more about the function of leverage and how it is calculated please visit Leverage and Margin.
Before trading understand how increasing leverage can increase the risks and rewards of a trading.
How can I change the leverage on my account?
You can change the leverage settings on your account by emailing us at [email protected]
The maximum leverage for Retail clients in the UK is 30:1 for Forex. Please visit our Contract Specifications for leverage allowances on other products.
What is the maximum leverage allowed on my account?
Leverage increases the risks and rewards of trading. In essence, the larger your account balance, the larger the risks and rewards become on a trade. For this reason we have maximum leverage levels, which are set to safeguard client assets and ensure liquidity providers aren’t exposed to excessive risk.
The maximum leverage levels for a given account are:
| Instrument |
Max. leverage for retail clients |
Max. leverage for professional clients |
|
Forex
|
30:1 |
400:1 |
|
Indices & Commodities
|
20:1 |
200:1 |
| Cryptocurrencies |
2:1 |
20:1 |
| Equities |
5:1 |
5:1 |
What is margin/margin requirement?
Margin is the amount required to open a new forex position. It is not a fee or a charge to your account – it is an amount set aside from your free equity to support your new trade.
It is the client’s responsibility to maintain sufficient funds in their respective accounts to avoid triggering a margin call at 50% margin level. For more information on margin calls please visit our Fair Execution Policy.
How do I calculate the required margin?
Margin requirements are calculated as follows:
(100,000 units * Number of standard lots)/Leverage * conversion rate to your base currency
For example, for a USD account with 500:1 leverage, if you place a EUR/USD buy order of 0.1 lots (10,000 EUR) @ 1.3632, the calculation would be as follows:
{(100,000 *1.3632)*(0.1)}/500 = $27.26
100,000EUR * 1.3632 = $136,320 (margin required for a standard lot when leverage is 1:1)
$136,320 * 0.1 = $13,632 (margin required for 0.1 lots when leverage is 1:1)
$13,632/500 = $27.26 (margin required for 0.1 lots when leverage is 500:1)
For more information please see our page on leverage and margin explained.
When will a margin call be triggered?
A margin call is triggered when your account’s equity falls below 50% of the required margin. For more information please see our margin call policy page.
What is slippage?
Slippage is the difference between the execution price and the requested price of a pending order or trade. It can be caused by a number of factors, but more commonly by thin liquidity, abnormal volatility and gapping in the markets (where gapping refers to a situation where there is a break between the tradable prices).
Please be advised that slippage is a natural occurrence caused by market forces and is by no means induced by ThinkMarkets. Please refer to our website for more information on our Slippage Policy
Are CFDs easy to trade?
CFDs are complex instruments. To reduce the risk associated with CFD trading, traders are advised to study how CFDs work and practise trading on a demo account before trading with real money.
Are there any risks when trading CFDs?
CFDs are leveraged derivative products that can result in larger than expected losses. To reduce potential losses, we advise studying how to use risk management tools, such as stop loss and take profit, and apply them accordingly for every position. Please check our Key information documents and Full Risk Warning for more details.
Can I lose more money than I deposited?
UK residents are covered by Negative balance protection. You cannot lose more than your invested capital with ThinkMarkets. If your balance becomes negative, it will automatically revert to zero. Please see more details in our Terms and Conditions.
What is a margin call?
A margin call is a warning sent out to traders when their account balance falls below the required level to maintain the margin of the open positions. To prevent a margin call, traders are required to deposit more funds or close some positions. If no action is taken and the account balance falls further, ThinkMarkets may liquidate open positions automatically. For more details, please check our Margin Call Policy page.