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Initial margins

Traders in ASX equity CFDs are required to put up an initial margin for each contract they trade. This applies to both buyers and sellers.

Initial margins protect the clearing house from risk resulting from a negative movement in the value of a position as a result of a change in overnight market prices. The initial margin is typically set at a level designed to cover reasonably foreseeable losses on a position between the close of business on one day and the next.

The amount of initial margin for each contract varies according to the price volatility of the underlying. Please refer to the initial margin rates for current ASX minimums. Initial margin rates are expressed in dollars by the ASX however your broker may charge a premium or express it as a percentage.

Examples

ASX equity CFDs

ASX BHP Billiton CFDs have an initial margin of $3.75 per contract. If 1,000 BHP CFDs were traded at $50.00 then the initial margin would be $3,750.

ASX index CFDs

ASX S&P/ASX 200 CFDs have an initial margin of AUD295.00 per contract. If 10 ASX S&P/ASX 200 CFDs were traded at 6700 then the initial margin would be AUD2,950.

ASX FX CFDs

ASX AUD/USD CFD have an Initial Margin of USD3.00 per contract. If 1,000 ASX AUD/USD CFDs were traded at $0.9472 then the initial margin would be USD3,000.