Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Options and turbo warrants are complex financial instruments. Trading these financial instruments involves the high risk of losing money rapidly.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Options and turbo warrants are complex financial instruments. Trading these financial instruments involves the high risk of losing money rapidly.
Take more control over your risk and leverage on forex, indices, shares, commodities and cryptocurrencies by trading our unique barriers.
Log in to practise taking barrier positions on our trading simulator, or add a barriers and options account straight from My IG.
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Barrier positions can be cheaper to open than similar CFD trades, while giving you access to the same upside. What’s more, you never risk any more on a barrier than the premium you pay to open, where you may be required to pay more margin on a CFD if market conditions change.
Take a look at some similar long trades across barriers and CFDs in the table below, and compare barrier premiums with CFD margins to see the difference in how much you’d pay to open.
| Barrier | CFD | |
| Market price | 6200/6202.8 | 6200/6202.8 |
| Knock-out level/guaranteed stop (if chosen) | 6140 | 6140 |
| Opening price | 63/65.8 (market price – knock-out) + (premium of 3) | 6200/6202.8 |
| Size | 10 contracts (each $1/point) | 1 contract (each $10/point) |
| Premium/margin to pay | $658 | $6208.8 |
| Max risk | $658 | $658/unknown without guaranteed stop |
| Barrier | CFD | |
| Market price | 1301/1301.3 | 1301/1301.3 |
| Knock-out level/guaranteed stop (if chosen) | 1288 | 1288 |
| Opening price | 13.3/13.6 (market price – knock-out) + (premium of 0.3) | 1301/1301.3 |
| Size | 100 contracts (each $1/point) | 1 contract (each $100/point) |
| Premium/margin to pay | $1360 | $6506.50 |
| Max risk | $1360 | $1360/unknown without guaranteed stop |
| Barrier | CFD | |
| Market price | 12000/12001 | 12000/12001 |
| Knock-out level/guaranteed stop (if chosen) | 11880 | 11880 |
| Opening price | 121.5/122.5 (market price – knock-out) + (premium of 1.5) | 12000/12001 |
| Size | 25 contracts (each €1/point) | 1 contracts (each €25/point) |
| Premium/margin to pay | €3062.50 | €15001.25 |
| Max risk | €3062.50 | €3062.50/unknown without guaranteed stop |
| Barrier | CFD | |
| Market price | 26000/26001.6 | 26000/26001.6 |
| Knock-out level/guaranteed stop (if chosen) | 25740 | 25740 |
| Opening price | 262/263.6 (market price – knock-out) + (premium of 2) | 26000/26001.6 |
| Size | 10 contracts (each €1/point) | 1 contract (each €10/point) |
| Premium/margin to pay | €2636 | €13000.80 |
| Max risk | €2636 | €2636/unknown without guaranteed stop |
| Barrier | CFD | |
| Market price | 11200.0/11200.6 | 11200.0/11200.6 |
| Knock-out level/guaranteed stop (if chosen) | 11088 | 11088 |
| Opening price | 113.2/113.8 (market price – knock-out) + (premium of 1.2) | 11200.0/11200.6 |
| Size | 10 contracts (each $1/point) | 1 contract (each $10/point) |
| Premium/margin to pay | $1138 | $3733.53 |
| Max risk | $1138 | $1138/unknown with out guaranteed stop |
Profit = the difference between the price at which you bought and the price at which you sold your barrier, multiplied by the trade size and minus the commission charge
Maximum loss = the premium (the price you pay to open the position), multiplied by your trade size
Trade currency pairs including EUR/USD and GBP/EUR.
Take a position on global stock indices.
Discover opportunity on popular metals, energies and more.
Deal on rising and falling stock in major companies worldwide.
Speculate on a selection of major coins, including bitcoin and ether.
If you’re interested in learning more about barriers, join our barriers webinar where our experts take you through the essentials step by step.
You can also discover the benefits of barriers, learn how to use the deal ticket and see examples of how they work in our free barriers guide.
How do barriers differ from CFD options?
Unlike barriers – an option which moves one-for-one with the underlying asset’s price and gets ‘knocked out’ if it reaches your chosen knock-out level – CFD options are contracts that give you the right to buy or sell an asset at a certain price on a certain date. This means the pricing is affected by a range of factors, making it more complex than barriers pricing.
How much does the premium cost?
The premium (the price you pay to open the position) is affected by the price of the underlying market, and your chosen knock-out level. It will vary according to the volatility of the underlying market – it may increase if volatility increases, and decrease if volatility decreases. We calculate it as follows:
When do I pay the premium?
You pay the full premium at the start of the trade. You’ll also pay a small commission of 0.1 per lot at the open and close of your position, and a small funding charge if you hold your position overnight.
How and when is the knock-out premium refunded?
The knock-out premium is refunded if you close your trade before it is knocked out. You’ll receive it back to your account, along with your profit or any remaining outlay.
1This is not the case when the knock-out premium changes. If the knock-out premium changes, the price of the barrier option will move by the amount the premium changes.
Options are complex financial instruments and your capital is at risk. Losses may be extremely rapid.
