This is why they need more regulation on the use of CFD's. People are trading with dynamite that could blow up in their faces at any time and they don't even know it.
It's simple mathematics, hardly dynamite. CFD's offer leverage and the risks involved are all over any reputable CFD providers website, so there's no excuse for ignorance if you are involved in CFD trading.
IG had a 25% (Tier 1) margin on FGE. $230k exposure in FGE would likely be Tier 3 and require a 62.5% margin or $143,750.
In comparison CBA is on a 5% margin. $230k = approx $11k margin.
If you were to closely max out your leverage on a single trade your CFD account would at least have to be able to cover the margin. 230k in FGE would need at least 150k but you could have 230k in CBA with as little as 12k. Of course this is an insane way to trade and you would be likely wiped out in a week anyway.
Most leverage traders will max out around 5:1, maybe 7:1 if your Rambo, but never in a single trade. You control your own risk.
FGE Price at posting:
91.5¢ Sentiment: None Disclosure: Not Held
