When you open a trade, 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.
Practically speaking, this measure makes sure that your account will never cross into negative territory.
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 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.
As mentioned before, the Ring Fenced amount is only applicable when you are investing. The moment you close all your positions, this ringe fenced amount will be available to you again.
Questions? Yell out at BUX Support.