Examples of Limited Risk in a sentence
The Limited Risk premium will be deducted as a cash entry only if the Guaranteed Stop Order is triggered, the margin required to open the position will include this premium.
Your total loss is calculated as follows: Gross loss on trade: ($1380) Total commission: ($33.38) Limited Risk premium: ($52.14) Interest adjustment: ($3.86) Overall or total loss: ($1469.38) Assuming you initially deposited $4,000, the overall loss would be taken from your cash balance leaving you with $2,530.62.
We quote you 0.7956/0.7958 and you sell 2 contracts on a Limited Risk basis.
In this case the Limited Risk premium = $52.14 (2000 shares x $8.69 x 0.3% limited risk premium).
The Limited Risk protection premiums payable on Forex CFDs may be found in the Product Details (https://www.ig.com/au/charges).
CALCULATING THE OVERALL RESULT To calculate the overall or total loss of the CFD you also have to take account of the commission and the Limited Risk premium you have paid along with the interest and dividend adjustments.
LIMITED RISK PROTECTION As with the other CFDs that we offer, you can also take Limited Risk protection on most Forex CFDs to limit your losses at the level you select.
You buy 2000 shares as a CFD at $8.69, the offer price, on a Limited Risk basis.
The most you can lose on the position (excluding our commission, Limited Risk premium, interest and dividend adjustments) is $1380 ($8.69, the opening level, minus $8.00, the Stop Order level = $0.69.
You should view our Limited Risk facility as a form of insurance, protecting your capital against unexpected sharp price moves or even a longer term price move against your position.