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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% 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. Professional clients can lose more than they deposit. All trading involves risk.
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CFD accounts provided by IG Markets Ltd, spread betting provided by IG Index Ltd and share dealing and stocks and shares ISA accounts provided by IG Trading and Investments Ltd. IG is a trading name of IG Markets Ltd (a company registered in England and Wales under number 04008957), IG Index Ltd (a company registered in England and Wales under number 01190902) and IG Trading and Investments Ltd (a company registered in England and Wales under number 11628764). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. IG Markets Ltd (Register number 195355), IG Index Ltd (Register number 114059) and IG Trading and Investments Ltd (Register number 944492) are authorised and regulated by the Financial Conduct Authority.
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Question
Vina
Hello Team
I am new to this platform and new to spread betting as well. So apologies if I am making some silly mistake here.
I opened up a demo account and I have £9943 of virtual currency still left. I was looking up the price of Amazon to understand how an US based stock bet works. I have a few questions:
1. I realized that that the price was showing up as 269004.0 and I cross checked against CNBC to find that the price was $2690.40. So I am assuming that the price being shown on IG is really in cents. Am I correct?
2. I tried to place a very small bet - £0.5 per point - and the margin requirement was shown as £26,886.40. When I tried to still place a deal, it told I had insufficient funds and I had to deposit £17,043 in my account to proceed. If the price of Amazon is $2690 and I am betting only £0.5 per point, I would expect the margin requirement to be 20% of $2690 and this should be covered by the £9943 virtual money still in my account. Am I missing something here?
3. When my base currency is GBP and I am dealing in US stocks, am I right in assuming that the currency conversions happen at 2 points - when I place a bet and again when I exit the bet? I am trying to understand the currency risk here.
Thanks a lot in advance.
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