The UK 50% Rule Uses Account Net Equity

The UK retail CFD close-out rule works at account level: when net equity falls below 50% of the margin required for open positions, the firm must close positions as soon as market conditions allow. It does not guarantee that each trade will be closed at its own 50% loss point.

The distinction affects portfolio management. Profits and losses across eligible open positions combine in net equity. Required margin also combines across the account. One losing position can therefore consume the buffer supporting another position that has not reached its stop.

What the 50% test compares

The FCAs policy statement describes 50% as a minimum close-out protection. Firms may close positions at a higher percentage under their terms. Market conditions can also affect the eventual execution price. The rule reduces risk but does not create a guaranteed stop.

Septembers BOE decision provides current context. The MPC held Bank Rate at 3.75% by six votes to three, with the minority preferring a rise to 4%. GBP positions remained sensitive to energy prices and the prospect of future tightening. Several sterling trades can therefore move account equity together.

UK traders should confirm whether they are classified as retail or professional and which legal entity carries the account. Elective professional status can change product protections. Spread bets, rolling spot forex and CFDs may also use different product language even when the economic exposure looks similar.

Build a close-out test with current equity, required margin and the firms actual threshold. Then add a gap and wider-spread scenario. If the projected ratio falls below the threshold, decide which position to reduce before the market decides through automatic liquidation.

OANDA’s September market outlook discusses the currency events that can change floating P/L. The FCA rulebook supplies the account-level definition.

The key point is precise. The 50% figure belongs to a ratio, not a trade return. Understanding the numerator and denominator prevents a false sense of distance from forced closure.

Sources

• FCA Handbook: margin close-out requirements
• FCA: permanent CFD restrictions
• Bank of England: September 2026 minutes
• AP: Bank of England holds at 3.75%

Client classification and provider terms determine the applicable protection.