CFDs Market Information

Contracts

Cash Contracts

Cash contracts provide a cost-effective solution for short to medium term trading. They do not have an expiry date.  An overnight financing rate is applied for every night that you hold a position open. Because you have only a small percentage of the full value of the trade as margin on deposit, your account incurs a debit or credit for each day that the position is held overnight. Similar to a mortgage on a property, you can put down a deposit and the rest remaining balance you can pay for with an interest only loan from the bank.  In the event of a corporate action or dividend being applied to the underlying market, a cash adjustment may be made to the account to reflect this redistribution of cash. A haircut may be applied to the value of this cash adjustment.

Future Contracts

Futures contracts will expire at a future date.  The price is derived from the relevant underlying product or a related future and will factor in the cost of carry to the expiry date.  No overnight finance charges will therefore be applied to positions held overnight.  Relevant interest rate levels and time to expiry are the key determinants of the cost-of-carry that will be factored into the future contract price.  In the case of equity related futures, we may apply a cash adjustment in the event of corporate actions or dividend payments during the life of the contract to reflect this redistribution of cash if it has not been discounted in the future contract’s price.  A haircut may be applied to this adjustment dependant on several factors for example applicable tax rates, clearing cost to process dividend payments etc. The future contract can be closed at any time before it expires, just as you can with a Cash contract.

General notes

i) All details are correct at time of going to press.
ii) London Capital Group Ltd reserves the right to alter the contract specifications at anytime and to widen spreads in times of excessive market volatility.
iii) All times stated are UK times.

Maximum Computer Generated Stop Level (Max CGSL)

The Max CGSL is the Maximum Computer Generated Stop Level. This is the maximum figure used to automatically allocate a stop loss on newly opened positions. The trading system will assign a stop level based on 80% of the CGSL if there are sufficient funds on the account. For instance, if you have £2000 in your account and you trade the UK 100 CFD at £10 per point, the system will automatically allocate a stop loss of 120 points (because the Max CGSL for the UK 100 CFD is 150 and 80% of 150 is 120) and you would also have £500 remaining as available funds on your account. Alternatively, if there are insufficient funds to cover the Max CGSL, the system will allocate the stop level based upon 80% of the available funds (see following details). The Max CGSL varies depending on the product.

Minimum Initial Margin Requirement (Min IMR)

The Min IMR is the Minimum Initial Margin Requirement. You can calculate the minimum level of funds required to open a new position by multiplying the Min IMR by your stake. For example, the current Min IMR for the UK 100 Index Future is 30 – the stop will be set to 80% of Min IMR which is 24points in this example. Therefore, if you wished to trade £5 per point, you would need a minimum of £150 available funds on your account (30 x 5 = 150). The Min IMR varies depending on the product. 

Capital CFDs' Stop Loss Policy

Capital CFDs automatically creates a Stop Order for every trade opened. This Stop is based EITHER on 80% of the CGSL OR on 80% of the available funds on your account. You may amend your Stop to whatever level you desire, assuming you have sufficient unencumbered funds available in the account, and that your required stop is outside the minimum stop order distance allowable for that market. Although this Stop does go some way towards limiting your risk on your open trades you must be aware that all orders including Stops are subject to market gaps unless you specified for your Stop to be guaranteed (see below and clause 7 in the Terms and Conditions).  

Guaranteed Stop Orders

Capital CFDs offers Guaranteed Stop Orders. With Guaranteed Stop Orders you can trade safe in the knowledge that, should a market gap through your stop level, you will not suffer any extra losses from the slippage and you will be stopped out at the level you requested. As Guaranteed Stop Orders are a form of insurance against market gaps, they come at a small extra cost. Firstly, there's a premium you have to pay for selecting your mandatory Stop to be guaranteed and secondly, it needs to be placed further away from your entry level than if it was a non-guaranteed Stop. When instructing us to attach a Guaranteed Stop Order to an existing open position, an opening trade, or a new order, we will charge a premium by executing a cash debit to your account. Opting for your Stop to be guaranteed will also recalculate the minimum distance away from your opening trade.
Further details of the premiums and minimum distances can be found in the Market information tables.
Capital CFDs will not quote any markets outside of its opening hours which are generally Sunday 22:00 to Friday 21:15, UK time.

Limited Risk Accounts

Capital CFDs offer Limited Risk accounts. A Limited Risk account helps minimise the risks of trading by associating a Guaranteed Stop Order with all your opening positions. Depending on your level of experience and financial situation you may be steered towards this account when you apply. Once you have some experience you can always contact Customer Support to request to swap your account to a standard account which means you will have the option of placing Guaranteed Stop Orders if you wish but these will not be mandatory.
As mandatory Guaranteed Stop Orders are essentially a form of insurance against market gaps, they come at a small cost. This premium will be debited from your account when you place a trade. You should also note that by opting for a Limited Risk Account your Stop will need to be placed further away from your entry level than if you selected a standard account where Guaranteed Stop Orders are not mandatory.

Notes on Individual Shares

i) In respect of dividends, an adjustment to your account shall be made with reference to any dividend or distribution attributable to any relevant security on which a trade is based and shall be made and calculated as follows:

a. where your Position would result in a credit to your account (for example a Buy position in an equity which goes ex-dividend) we shall adjust the account balance in your favour by the gross dividend adjusted with applicable haircut percentage of Gross dividend (Standard adjustment for UK shares is 80% of Gross dividend), and multiplied by the Transaction Size; or

b. where your Position would result in a debit to your account (for example a Sell position in an equity which goes ex-dividend) we shall adjust the account balance in our favour by the gross dividend adjusted by the applicable haircut percentage(Standard charge for UK shares is 100% of Gross dividend), and multiplied by the Transaction Size.

ii) On expiry of equity trades of less than £30,000 total notional value the settlement price will be based on the closing bid or offer price of the trade plus or minus the LCG spread on that trade depending on the customer’s position (if the customer has a Long Position on expiry the settlement price will be the bid of the share in the market at expiry time minus the spread and if he has a Short Position on expiry the settlement price will be the offer of the share in the market at expiry plus the spread).

iii) On expiry of an equity trade greater than £30,000 total notional value, LCG shall settle the trade at either the average price of the underlying share in the last hour of trading of the last dealing day on a fair and reasonable, in the assessment of LCG, bid/offer spread plus or minus the relevant LCG spread or at the price achieved by LCG in removing its hedge on the relevant trade during the course of the final business day of the relevant expiry date plus or minus the relevant LCG spread or at the closing bid/offer spread price in the relevant underlying market plus or minus the relevant LCG spread.

Rollover of Futures Contracts

Rollover terms on all markets are available with Capital Spreads. To avail yourself of any rollover concessions you must indicate to LCG 45 minutes before the expiry of the relevant contract that you wish to roll. LCG will rollover futures contracts as follows:

1. For equities, LCG will close the existing trade spread free (at just the underlying market price) and offer the subsequent quarter at half of the spread.
2. For all other contracts, LCG will close the trade at our mid-point and offer the subsequent quarter at the current LCG quote.

Notes

i) LCG closes the existing trade on rollover of futures contracts and subsequently opens a new trade on the next month/quarter

ii) Any profits or losses incurred are realised on rollover of futures contracts.

Cash Contracts

Cash contracts may incur a debit or credit for each day that they are held overnight. If you hold an open position at the day’s session close, time then any relevant overnight financing charges will be applied to this position.
If you are long of a market, this equates to real market cash exposure and so interest may be charged on this cash value for each day that the position is held open overnight. If you are short of a market, an interest return may be paid on these equivalent cash funds.
The overnight financing can be calculated as follows:

F = ( (p / u) x s x i) / b
F = overnight financing
p = closing price
u = unit risk
s = size
i = applicable interest rate (RFR +2% for long positions or –2% for short positions)
b = day basis (365)

Notes on Equity and Index trades

i) The Relevant Funding Rate (RFR) is generally equivalent to the base rate of the underlying currency of the country of the market concerned.
Long positions on may be debited financing (RFR plus 2%). Short positions may be credited financing (RFR minus 2%). For example, the RFR for a short position in Google would be based upon the base rate (Fed Funds Rate) of the USA minus 2% (e.g. 3.25% - 2% = 1.25%).

ii) The unit risk is the smallest movement on the relevant contract.

iii) Dividend adjustments are credited to long positions and debited from short positions held after the close of the day’s trading session on the business day before the ex-dividend date. Payment adjustments are debited or credited to your account before the ex-dividend date. Dividend adjustments may also apply to index positions.

Notes on Spot currency trades

The Relevant Funding Rate (RFR) for Spot FX trades is generally equivalent to the base rate of the second currency minus the base rate of the first currency in a currency pair.
For example, the first currency in the currency pair GBP/USD is sterling and the second is the US dollar. Therefore, the corresponding RFR for GBP/USD may be calculated as follows:
3.25% (USD) minus 4.50% (GBP) = a negative interest rate of minus 1.25% or – 0.0125.
The difference between the interest rates of currencies may be a negative number which may result in an overnight financing charge for short positions or an overnight financing payment for long positions.
The rates used for the examples above are indicative and are not necessarily representative of correct rates