What are the collateral rates and what are they based on?
The Collateral Rate assigned to a CFD depends largely on the volatility and liquidity of the underlying security. The current Collateral Rates applicable to standard long and short CFD positions range between 5% and 40%. CFDs with Guaranteed Stop-Loss (GSL) protection require Collateral equal to the lesser of: • the gap between the price of the underlying security and the GSL Level; or • the amount of Collateral required for the same CFD Order or position that did not have GSL protection. This can reduce the Required Collateral Amount for a CFD position which has GSL protection to as little as 1% of the CFD Value, although the investor must pay a GSL Premium when placing the GSL Order.
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