What does micro-lots change for DAX and S&P traders
We are introducing micro-lots on stock indices including the DAX and S&P. What does it change for those who are trading these symbols and why it could be a good news for small account owners? Read our short article and find out!
Micro-lots on DAX
Up to this point, we were offering DAX trading starting on 0.1 lot
. With our index price 9550.0 and 1:20 leverage on ESMA account, this requires 1193.75 EUR on margin requirements
(with leverage of 1:50 on PRO account the margin requirements would be 477.5 EUR). Since this is quite a significant amount of money for the majority of smaller account clients, the DAX instrument is simply not tradeable for them.
That’s why we have decided to switch to another LP
(liquidity provider) which will allow trading starting on 0.01 lot
while keeping our trading conditions (tick size and tick volume) unchanged.
If we consider the fact that with current trading conditions (minimum margin requirements for opening 0.1 lot) small account clients, are not be able to afford to trade DAX, switching to new LP will change this. Because with 0.01 lot position the margin requirement is 10 times lower.
If we demonstrate it on the example we used previously it would mean that with 0.01 position the trader will now need 119.38 EUR
(with 1:20 ESMA account leverage), or 47.75 EUR (with 1:50 PRO account leverage.
DAX: Margin requirement depending on volume of trading position
||old margin requirement (0.1 lot)
||new margin requirement (0.01 lot)