Man Spread Trading Increasing Margin Requirements on Small Caps

I’ve made some enquiries, and it seems that the top brass at Man Financial have once again issued an edict from on high, which their staff are now trying to implement, which will shaft some of their customers. This is what’s happening, as I understand it (from the horses mouth);

Globally, Man have decided they don’t want exposure to small caps on leveraged products, to they are increasing their margin requirements on small caps as follows;

Over $100m mkt cap – no change

$50-100m mkt cap – margins increase to 75%

Under $50m mkt cap – margins increase to 99.75%

These changes are taking place this Thursday 29 Feb 2007, for Man Spread Trading, and GNI.

So there is only a problem for anyone with leveraged products on stocks with a mkt cap under about £52m.

This is all the more galling because Man Spread Trading marketed their product focusing heavily on their ability to do small caps down to £6m on competitive margins! But I already have experience of how different parts of Man don’t speak to each other, and the edicts from above are just handed down without any consideration at all for how it will affect their customers.

Having said all that, this is maybe a good time to review whether certain shares are suitable for Spread Betting at all. Certainly the gearing can be a killer, as I’ve experienced in the past. So always best to go easy on the sizing of the position when using Spread Bets – keep the gearing down to the minimum would be my advice.

Tags: mfglobalspreads

This entry was posted on Thursday, March 1st, 2007 at 3:33 am and is filed under Broker News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.