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What is margin?

Investing in CFDs involves leverage, meaning you only need to deposit a fraction of your trade’s value, known as margin. The margin requirement may vary depending on the specific CFD. You can view each CFD's margin requirement on the relevant trading screen.

For example, if a CFD has a margin requirement of 20%, you'll be able to trade with 1:5 leverage. With 1:5 leverage, your margin requirement to open a $100 position would be $20. When you have an open position, your margin in that position will increase when the value of the position increases and decrease when the value of the position decreases.

The exact margin rate will be different for each asset, but we generally offer 1:5 leverage for CFDs on stocks, 1:10 leverage for CFDs on commodities (except gold 1:20), and 1:20 leverage for CFDs on major indices.

What is a margin call?

A margin call is a reminder from Revolut for you to deposit additional funds into your CFD account or to sell assets to meet margin requirements. The first margin call occurs when your account value falls below 80% of the value of your margin reserved (margin required to maintain positions open), and the second one - when the value of your account drops below 60% of the margin reserved.

We'll send you emails and push messages to let you know about margin calls. Margin calls serve as reminders that your margin reserved % is dropping, and you can choose to take no action.

Margin calls are typically triggered by adverse price movements in your traded assets. When the value of your positions drops, the required margin to maintain those positions may exceed your account value, resulting in a margin call. If you fail to meet a margin call, and your margin reserved falls below 50%, we'll liquidate some or all of your positions to cover the shortfall.

What is a position force liquidation?

If you fail to meet a margin call and the value of your positions continues to decline, Revolut may be compelled to forcefully liquidate some or all of your open positions to prevent further losses under European regulations. This makes sure your account doesn't fall into a negative balance, thereby protecting your remaining capital and Revolut’s as well.

Force liquidation will happen if the value of your account reaches 50% of the value of your margin reserved (margin required to maintain positions open). When force liquidation happens, we'll close your position with the highest unrealised loss at the current market price. If that’s not enough, we'll pick the second position with the highest unrealised loss and so on. We'll stop closing your positions when the value of your account reaches 70% of the value of your margin reserved.

What is the spread?

In CFD trading, the spread is the difference between the bid price (the price at which you can sell) and the ask price (the price at which you can buy) of an asset. This spread can vary depending on the asset class and prevailing market conditions. Since CFDs are designed to be traded over short periods of time (often intraday) you need to carefully consider the implications of the bid-ask spread on the potential profit or loss of your position.