Why are funds debited when I edit a Stop Loss?

If you extend your Stop Loss beyond the maximum Stop Loss allowed after opening a trade, we debit funds from your available balance and add them to the invested amount as part of our Maintenance Margin feature. Extra margin can help prevent being stopped out of a trade during times of market volatility.

How does it work?

Let's say you invest $1,000 in a BUY trade with the Stop Loss set to the maximum allowable loss of 50%. This means that the trade will close if it loses $500.

If you wish to extend the Stop Loss to 100% once the trade is open, an additional $500 will be allocated from your available balance to the invested amount. It brings the total invested amount to $1,500, and the Stop Loss to $1,000. The additional $500 is what we call the 'maintenance margin'.

How do I get the funds back?

To return the funds to your available balance, you can simply reduce your Stop Loss while the position is still open.

If the position closes in profit, the debited funds are returned to the available balance, along with the amount originally invested and profit.

Can I lose the added funds?

Yes. Debited funds are lost if the position closes with a loss that exceeds a 100% Stop Loss, which can happen on leveraged or short positions.

Example: You open a $1,000 position, leveraged x10, providing $10,000 in market exposure with a stop loss of 50% of the initial investment, $500.

You extend the stop loss to 150%, which debits $1,000 from your available cash to act as the maintenance margin ($500 to increase it to 100% and $500 more to reach 150%).

The total invested amount is now $2,000, with the Stop Loss at $1,500.

The Stop Loss is triggered, with a loss of $1,500, which consists of the original $1,000 investment and $500 of the maintenance margin.

The debited funds are only lost if the position closes at a loss beyond the original maximum Stop Loss.