Margin, calls and stops
There is no stake to lose on a spread position, so something else has to stand between the position and an unbounded loss. That something is margin: a deposit held against the position, measured every time the market is re-quoted, and capable of ending the trade before the event does.
How a requirement is built
Firms publish a requirement per market, usually as a multiple of the money per point, sometimes with an extra component for markets whose index can jump in one event. The multiple is not a maximum loss and it is not the amount you can lose — it is the amount the firm wants held before it will carry the position.
| Market type | Requirement of this shape | £5 per point means |
|---|---|---|
| Short-dated, single match | a fixed multiple of the money per point | 10 × £5 → £50 deposited |
| Market whose index can jump (cards, shirt numbers) | a larger multiple, or a multiple plus a range component | 20 × £5 → £100 deposited |
| Long-dated (season or series) | a percentage of the notional value of the position | 15% of a £1,300 notional → £195 deposited |
Note what the first row does and does not say. A £50 deposit on a £5-per-point position is not a £50 loss limit: a ten-point adverse move costs £50 and a thirty-point adverse move costs £150, which the £50 deposit does not cover. That is what a margin call is for.
A call, step by step
the index moves against the position by 15 points, quote 14–17
unrealised loss = (14 − 29) × £5 = −£75
equity at that moment = £50 − £75 = −£25
the requirement is unchanged at £50, so the shortfall is 50 − (−25) = £75
if £75 is not provided in the firm's window, the position is closed at the quote
closing at 14 realises −£75 and leaves the account £25 in deficit
Two facts about that sequence are worth separating. The first is that the call is mechanical: it is arithmetic measured on the mark, not a decision about the customer. The second is that a deficit can remain after closing, and what happens to a deficit is a matter of the firm's terms — whether it is a debt, how it is pursued and whether the account is blocked are all contractual. Nothing on this page changes that, and the honest summary is that the position was already beyond the deposit before anyone called.
What a stop-loss does and does not promise
A stop instruction asks the firm to close a position if the index reaches a level, and it is the most misunderstood control on the product because the phrase contains the word “stop”.
It gives the firm a standing instruction, so a position is not left to be watched by hand. On a market that moves in small increments, a stop at a sensible distance does exactly what a reader expects: the position is closed near the level and the loss lands near the intended figure.
It cannot guarantee the level. A spread index can jump: a goal is worth ten points at once, a red card twenty-five, and a market can be suspended around an event, so the index may pass the stop between two quotes. Where it does, the closure happens at the price then available, not at the stop. Some firms offer a guaranteed version — the guarantee is priced, through a wider pair, an upfront fee or both.
The three mechanisms that end a position
- You close it You trade the other side of the pair. The realised figure is the mark at that moment, and both charges described on the cost page have been paid.
- You are closed out A margin call is not met within the firm's window, or the equity falls below the requirement and the firm's terms allow it to act immediately. The position ends at the price available, which is not chosen by the reader.
- It settles The event completes and the index is compiled once. No decision is needed, and the make-up is the final number — see settlement.
The order in which these arrive is not a matter of preference. Firms' terms typically allow closure without notice when the requirement is breached, and a suspension of the market is not a pause in the obligation: it is a period in which the position cannot be closed at all, which is the specific danger the risk page quantifies.
The link below is the disclosed sponsored link, and it is the only commercial element on this page. Nothing here recommends a firm, a margin multiple, a market or a stop level.
Open the partner accountThis desk explains how margin is measured and what happens when it is breached. It does not explain how to size a position to avoid a call, how to add money to hold a losing position, or how to time a stop so that it fills at the level it was set at — those depend on the market and the moment, and the second one is a route into a loss larger than the account. Never commit money you cannot afford to lose, and never deposit to defend a position you would not open again today.