MF Global warning sparks fears of sell-off

One of London's leading brokers has demanded that clients put up significantly more cash to cover derivative positions - a move which traders fear could result in millions of shares being dumped on the market today.

"You are going to see a lot of forced selling," said one leading London stockbroker.

CFDs allow investors to gain exposure to £1,000 worth of shares, by putting up as little as £100 of cash. Once the domain of financiers and corporate raiders, the controversial derivatives have in recent years been used increasingly by both private and professional investors. But an executive at a leading CFD broker warned yesterday that "the days of cheap finance for CFD investors are over".
Basically in the morning (their morning) this London brokerage will require their clients to put up 90% margin instead of the 10-25%(?) for their trades. This is predicted to force a sell off because traders can’t meet their margin requirements. It will be interesting to see if this spills over into the U.S. markets.