What is a deposit margin when it comes to spread betting?

A deposit margin is basically there to ensure that you have enough money to cover any potential losses that you might make whilst you are spread betting.

For example, if you were being £100 worth of shares when spread betting you would be expected to put up only 10% of the value of those shares so £10. This 10% is your deposit margin. If you were buying shares through a stockbroker however, you would be required to put up the whole £100 for the shares. 

Deposit margins are typically 5% to 25% of the value of the shares. The percentage varies depending upon the commodity that you are spread betting on and also how they are positioned in the market and what has previously happened to those shares in the past.

A deposit market ensures that the spread better is only betting within his means and basically works as a type of risk control. It prevents individuals from taking a large amount of risk which could result in large losses. Margins are in place for a reason to ensure that spread betting is undertaken responsible and within the financial means of the individual.