CFDs Trading Conditions & Commissions

DMA (Direct Market Access) Stock CFD Margins

CFD's trading is normally undertaken on the basis of "margin trading" That is a relatively small deposit (the margin) is held as collateral in order to control much larger positions in the market; in consequence of which the client acknowledges, understands and accepts the high degree of risk exposure.

Margin requirement: For Equity CFD's is calculated as follows:

Refer to CFD Margin Groups for which margin group a particular stock is currently traded under.

Margin requirement: For Equity Index CFD's is calculated as:

During Exchange hours: 10% of the prevailing open position
Weekend positions as From Friday 18:00 C.E.T.: 10% of the prevailing open position

HMS LUX reserves the right to adjust the margin requirement at any time

Example margin requirement:

Stock ABC, you buy 1000 CFD's at EUR 10.00, contract value of 1000 cfd's at EUR 10.00 = EUR 10,000

You will require a margin collateral of 25% of the contract value during exchange hours(during week days) EUR 10,000 x 25%=EUR 2,500 margin collateral required.

Account Exposure

The Client must not invest in more than 70 percent of the Client’s account value in any one Margin Trade instrument and/or related Margin Trade instrument. If the Client holds more than 70 percent of the account value in any one Margin Trade instrument and/or related Margin Trade instrument, the Client will be required to reduce the exposure. It is the Client’s total responsibility to monitor the clients account(s) and exposure at all times. If the Client does not comply with this requirement, the Clients Account will be considered to be over-exposed and HMS, at its absolute discretion and without prior notice to the Client, reserves the right, but not the obligation, to reduce the Client’s exposure by closing position(s). The Client is made aware that HMS, at its absolute discretion, may consider certain accounts higher risk and may lower the above threshold. In such cases, HMS shall inform the Client.

CFD Interest and Accrual Rates

If you hold a CFD after the stock market closes, you are subject to a financing fee or accrual:

• When you buy a CFD, you are subject to a financing charge at the Inter-Bank Offer Rate for the currency in which the share is traded (e.g. LIBOR plus 3%)
• When you short sell a CFD, you receive an interest accrual at the Inter-Bank Bid Rate for the currency in which the share is traded (e.g. LIBID minus 2.5%)

If you open and close a CFD position within one trading day, you are not subject to these charges or accruals.

Currency Conversions

Currency conversions of trading costs as well as profits and losses from trading activities are done using the prevailing close rate as of 17:00 New York Time, plus/minus 0.5%.

Short Selling CFDs

When short selling CFDs, you can experience forced closure of a position if your CFDs get recalled. The risk is particularly high if the stock becomes hard to borrow due to takeovers, dividends, rights offerings (and other merger and acquisition activities) or increased hedge fund selling of the stock.

Dividends on CFD Positions

Holders of long CFD positions will, when dividends are paid on the underlying share, qualify for a proportional payout. Holders of short CFD positions will have to pay an amount equal to the full (gross) dividend paid on the underlying share.

The amount will be credited/debited your trading account on ex-date, unless the dividend rate is unconfirmed in which case the dividend is paid on pay date (e.g. ADR's).

Dividends on CFD positions are paid and debited through the platform and not by the underlying company. Dividends paid or debited are cash adjustments reflecting corporate actions in the underlying share and as a result will not take into account special dividend taxes that may be applicable. CFD dividends may therefore differ from the dividends payable on the underlying share. Holding a CFD does not confer the rights to any dividend imputation credits.

Partial Fills

Partial fills may occur on limit orders and the remaining amount stays in the market as a limit order and may be filled within the order duration.

Market orders can be filled at numerous levels, the price paid will be the volume weighted average price of all the fills.

Nordic Markets

Orders traded in the Nordic markets (Denmark, Sweden and Norway) are split into an "Even lot" which will be traded, and a remainder which will be routed to the odd-lot book.

When part of an order is routed to the odd-lot book, limit orders will be filled if possible or left on the book until a fill is possible. A market order will be filled immediately if possible, and will otherwise be cancelled (fill or kill principle).