International brokerage group Alpari has announced that it will implement changes to its CFD margin requirements on February 5, in an effort to create an easily identifiable set of trading conditions for its traders.
The brokerage has reorganized its CFD asset offerings into categories, which will be classified as Commodity CFDs, Index CFDs, and a combined category called Commodity and Index CFDs. Each category contains various CFD instruments that will incur varying levels of margin requirements.
It should be noted that the maximum volume for all CFDs will be 25 lots, each with its own attributable amount contained within 1 lot. The value of a position will be calculated based on the number of contracts per lot, multiplied by the size of the position in lots. In other words, if 1 lot contains 100,000 contracts, and a position is opened at 0.50 lots, the nominal value of the trade would be $50,000.
The Commodity CFDs category will include two energy CFD assets, namely WTI and Brent Crude oil. The specified margin requirements will depend on the nominal value of the position. Positions smaller than $30,000 in value will receive a leverage of 1:33. Positions with a value between $30,000 and $90,000 will carry a leverage of 1:15, and finally any trade with a value greater than $90,000 will be limited to leverage of 1:3.
The Index CFDs classification will include the following indexes: DAX30, FTSE100, SPX500, IBEX35, and NIKK225. For positions with a nominal value lower than $800,000, the associated leverage will be 1:50. If the value of a trade falls between $800,000 and $2,000,000, the trader will be granted a maximum leverage of 1:25. Similar to the Commodity category, any position that exceeds $2,000,000 in value will be limited to a leverage of 1:3.
The combined Commodity and Index CFDs category will encompass CAC40, ASX200, NQ100 (Nasdaq), STOXX50 (Europe 50), HSI50 (Hong Kong), as well as NG (Natural Gas). Natural gas carries differing quantities of units per lot than WTI and Brent Oil. Since many trading platforms, including Metatrader 4 have asset group settings that require marking trading conditions that include leverage on the overall group of assets, it makes more sense to include natural gas in a separate category than the aforementioned energy commodities.
The Commodity and Index CFDs category will receive a leverage of 1:33 for positions smaller than $230,000 in value. Positions greater than $700,000 can implement a maximum leverage of 1:3. Any positions with a nominal value between the above levels ($230,000 – $700,000), will be granted the option of using a leverage of 1:15.
Another New Product
On another note, Alpari also introduced a new type of option called Express. The brokerage will offer the new product on its new BinaryTrader platform, which was launched on January 26. The original version of the platform was initially released in 2015, but has since undergone various upgrades to accommodate the demands issued by traders over the years. According to Alpari’s statement, the updated version offers technical analysis indicators, charts showing an asset’s price history, and a market watch window, similar to the one offered in the MetaTrader 4 trading platform.