When you open a position, you will see that we reserve a certain amount of Cash from your account = this is the so called 'ring fenced amount'.
Its sole function is to make sure there is always enough Cash on your account to cover trading & financing fees for your open positions and makes sure that your account will never be negative.
The amount that we reserve is always 5% of the total account value (invested amount + Cash).
The minimum ring fenced amount is £5.
This measure is also only temporary. Once you've closed all your positions, the ring fenced amount will be available to withdraw.
Check out this example:
- Say, you deposit £100 in your BUX X account. The moment you make a trade, your ring fenced amount will be (5% of 100) £5.
- If you invest £70 and the value of your investment grows to £80, your ring fenced amount will stay the same.
- However, once you close your investment, your total account value would increase by £10, taking your account value to £110. If you make a new trade, your ring fenced amount will be 5% of 110 = £5.50.
Questions? Contact us.