Position currency

[ChristianS]

I have a GBP spreadbet account, if I open a position on NASDAQ which is a USD asset, is my money converted to USD and are all the calculations on how much equity and margin I have all done against the last exchange rate GBPUSD?

[Caseynotes]

1 hour ago, ChristianS said:

I have a GBP spreadbet account, if I open a position on NASDAQ which is a USD asset, is my money converted to USD and are all the calculations on how much equity and margin I have all done against the last exchange rate GBPUSD?

Hi, yes the currency needs to be converted, this is done automatically, see this page for examples.

https://www.ig.com/usermanagement/customeragreements?igCompany=igau&agreementType=costs_and_charges&locale=en_GB

[andysinclair]

5 hours ago, ChristianS said:

I have a GBP spreadbet account, if I open a position on NASDAQ which is a USD asset, is my money converted to USD and are all the calculations on how much equity and margin I have all done against the last exchange rate GBPUSD?

The NASDAQ is not really a USD asset, it is an index.

When you spreadbet on the NASDAQ you are betting an amount of GBP per point move in the index. There is no GBPUSD conversion to take into account.

The amount of margin required is based on how much (GBP) per point you bet. See here for details:

https://www.ig.com/uk/help-and-support/spread-betting-and-cfds/fees-and-charges/what-are-igs-indices-spread-bet-product-details

[Caseynotes]

9 minutes ago, andysinclair said:

The NASDAQ is not really a USD asset, it is an index.

When you spreadbet on the NASDAQ you are betting an amount of GBP per point move in the index. There is no GBPUSD conversion to take into account.

The amount of margin required is based on how much (GBP) per point you bet. See here for details:

https://www.ig.com/uk/help-and-support/spread-betting-and-cfds/fees-and-charges/what-are-igs-indices-spread-bet-product-details

oh ok, so is this IG example of a cfd trade on the Dax showing currency conversion not correct then?

ps, taken from Oz IG so uses AUD rather than GBP.

Edited September 19, 2020 by Caseynotes

[andysinclair]

2 minutes ago, Caseynotes said:

oh ok, so is this IG example of a cfd trade on the Dax showing currency conversion not correct then?

ps, taken from Oz IG so uses AUD rather than GBP.

The question was about spreadbetting not CFDs. CFDs are quite different and like you point out do have an exchange rate factor if the instrument is quoted in a currency different to your account currency.

[Caseynotes]

2 hours ago, andysinclair said:

The question was about spreadbetting not CFDs. CFDs are quite different and like you point out do have an exchange rate factor if the instrument is quoted in a currency different to your account currency.

no, CFDs aren't 'quite different', spread bets are CFDs, spread bets are a legacy from the early days (1970s) when the whole ball game came under the Gaming (betting) Commission rules rather than the Financial Services Commission (FSC) rules.

That  keeps them in a different UK tax bracket which is why SBs are not available anywhere outside the UK.

The tax bracketing is the only real difference between SBs and CFDs that I'm aware of but would be happy if someone could prove this is incorrect.

[Kodiak]

With CFDs you can choose between contracts for the same indice

and if the account is GBP and the contract is in USD then you need to convert GBP to USD

 

[Shalaby]

Hi, 
Has this question been answered yet? 
The two main answers that were provided by Caseynotes and andysinclair are both logical and either of them could be correct, but the consequences of each answer could not be more different. Can someone from IG help with a clear answer?

Is there any currency conversion when spread betting from GBP account on any non-UK equity?

If yes, how and when?

If no, and we are only betting an amount of GBP per point move of the stock, I guess there will be more questions?