Tiered Deposits | Tiered Deposit Rates

Tiered Deposits

Our Tiered Deposit structure enables clients to enjoy our lowest deposit rates on the majority of positions.

What are Tiered Deposits?

Tiered Deposits enable us to offer you deposit rates that reflect the size of your aggregate position [1] in a particular instrument.

This means that the majority of positions will attract our lowest deposit rates, reflecting the liquidity of the market at smaller deal sizes. Larger positions may require a higher deposit, as it is more difficult to trade out of these positions quickly.

How does it work?

Your initial deposit will be determined using a table of four incremental tiers. Only the portion of your position that falls into a higher tier will be subject to its increased deposit rate.

The range of the four tiers differs to suit each market, and the deposit rate varies according to the type of account you hold.

Example: Tiered Deposits for HSBC shares

The table below shows how Tiered Deposits apply to HSBC shares.

As a Plus or Select Account holder, if you hold a Daily Funded Bet (DFB) of £500 per point in HSBC, your initial deposit will be 5%.

If you are a Plus Account holder with a £2000 per point position in HSBC your initial deposit will be determined as follows:

• £1500 at 5% (Tier 1)
• £500 at 20% (Tier 2)

This equates to a weighted average deposit rate of 8.75%, still lower than our old deposit rate of 10% and, although you will not own the shares, significantly lower than the outlay required for an equivalent share purchase in the underlying market.

Reducing your deposit requirement

You can lower your deposit by using non-Guaranteed Stops, as long as your aggregate position falls exclusively within the range of the first tier. Please note, however, that any Tier 1 deposit reductions will be lost if you increase your aggregate position beyond the threshold of Tier 2. This is always the case, even for markets where the deposit rate for Tiers 1 and 2 is the same.

So, if you have a £1300 per point position in HSBC and a tight non-Guaranteed Stop, but decide to add another £300 per point to your position, you may see a substantial increase in your deposit requirement.

More information

A full list of affected shares and their applicable deposit tiers can be found below.

• Tiered Deposit List for Shares (2.04MB)

The Tiered Deposit requirements for other markets (including shares) can be found in our dealing platform. Select the Get Info option on the drop-down menu for the market concerned.

Remember that the size of your overall position, and not the level of the initial deposit, dictates your profit and loss. It is possible for losses to exceed your initial deposit.

Notes

1. For the purposes of Tiered Deposits, your aggregate position includes your non-Controlled Risk open positions and orders to open.

2. Within our PureDeal platform, margin tiers will be expressed as an amount per point of the share's base currency, irrespective of the currency or denomination of your bet. For example, US shares will be expressed in terms of dollars per point.