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IG has shown it's true colours and is restricting BUYING of AMC and GME


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Guest PhilPhilPhil

anyone remember the move in the swissy which effectively resulted in significant restrictions for every single retail trader in the UK and Europe? 

NO ONE ON THIS THREAD IS THINKING LONG TERM.

you are complaining about market manipulation when im sorry, this just isn't it. Literally NOONE on this thread knows what they're talking about, and they're just regurgitating the echo chamber of reddit "market manipulation blah blah blah". 

all of your complaints, about something you dont know or understand, is going to have a significant and negative impact on those of us who do. You're literally destroying the thing you supposedly want - access to the financial markets  on a level playing field.

for the vast majority of brokers its a CLEARING ISSUE. for others its a tech burden! 

imagine having a football stadium that fits 60,000 and then one week 180,000 turn up and want to get in. Thats exactly the same as whats happening now, but analogous to servers and capacity.

JUST LOOK AT WALLSTREETBETS. They've gone from 2m people on that subreddit last year, to 2.7m at the start of the week, to 7.4m today. SEVEN POINT FOUR. That is a trading forum which has grown by nearly 300% in a week. That sort of increase in interest is just not something these brokers can deal with, especially seeing as its focused on 1 or 2 stocks. 

Its so dumb - even on reddit its known as the 'reddit hug' which describes where reddit points people to a website and when it gains so much interest it crashes the servers. How can you not get that this is exactly whats happening now. 

Robinhood said over half of their clients are trading GME. I mean **** - its just unheard of. 

none of you are social warriors against 'big finance' - you're just losers who are trying to get on the latest pump and dump and getting pissed when tens of millions of others people are trying to do the same.

what on earth do you expect?

youre actually going to ruin trading for the regular guy and you can't even see it....

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13 minutes ago, Guest PhilPhilPhil said:

anyone remember the move in the swissy which effectively resulted in significant restrictions for every single retail trader in the UK and Europe? 

NO ONE ON THIS THREAD IS THINKING LONG TERM.

you are complaining about market manipulation when im sorry, this just isn't it. Literally NOONE on this thread knows what they're talking about, and they're just regurgitating the echo chamber of reddit "market manipulation blah blah blah". 

all of your complaints, about something you dont know or understand, is going to have a significant and negative impact on those of us who do. You're literally destroying the thing you supposedly want - access to the financial markets  on a level playing field.

for the vast majority of brokers its a CLEARING ISSUE. for others its a tech burden! 

imagine having a football stadium that fits 60,000 and then one week 180,000 turn up and want to get in. Thats exactly the same as whats happening now, but analogous to servers and capacity.

JUST LOOK AT WALLSTREETBETS. They've gone from 2m people on that subreddit last year, to 2.7m at the start of the week, to 7.4m today. SEVEN POINT FOUR. That is a trading forum which has grown by nearly 300% in a week. That sort of increase in interest is just not something these brokers can deal with, especially seeing as its focused on 1 or 2 stocks. 

Its so dumb - even on reddit its known as the 'reddit hug' which describes where reddit points people to a website and when it gains so much interest it crashes the servers. How can you not get that this is exactly whats happening now. 

Robinhood said over half of their clients are trading GME. I mean **** - its just unheard of. 

none of you are social warriors against 'big finance' - you're just losers who are trying to get on the latest pump and dump and getting pissed when tens of millions of others people are trying to do the same.

what on earth do you expect?

youre actually going to ruin trading for the regular guy and you can't even see it....

Clearly you have no idea about anything, Retail trading and investment has seen a HUGE increase since the start of the pandemic. As have most internet based services obviously. IG and every other broker have had months to improve their back end and improve capacity. Its not a question of that. The issue here is broader, It's quiet obvious that under extremely volatile conditions they're going to restrict margins etc. It's common practice. The problem here is that they're restricting CASH ACCOUNTS, Not only are they restricting cash accounts but they're allowing you to close positions and not buy. If this is as you say a matter of clearing, They have had all weekend to allocate resources/extra hardware for the expected traffic. If this was still an issue they would just suspend the ticker and not allow you to close.

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Wow Phil you need to chill with the insults and inappropriate abuse, personally I appreciate you putting in your opinion and knowledge and I think that needs to be done so thank you but next time do it in a more civil manner ....

However you missed the target.

Most of us simply like the stock and want to support the future of Game stop.

 

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I would like to pose a very simple question to IG. Whilst increasing  margins to 100% on shares like GME & AMC, due to volatility, is understandable, how does restricting buys on share purchases help anyone but the hedge funds currently losing money. By restricting further purchases, existing shareholders (which does not include me) are clearly being encouraged to sell and cannot buy, which will ultimately result in the share price cratering. Am I missing something ? 

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6 hours ago, WindInTheWillows said:

Further 

I would also encourage everyone to bring to the FCAs attention IGs practice of limiting positions to less than +- 20% of the current stock price. This is simply unacceptable.

 

5 hours ago, Guest CommandoAL said:

Thanks and complaint sent in 

already done. awaiting a reply and told me to submit a complaint to IG which i have already done, also awaiting a response.

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Actually PhilPhilPhil is making some important points, I was sitting at the trading desk in Jan 2015 when the bottom fell out of the swissy, FXCM went bust and so very nearly did IG, big lessons learnt by traders and brokers alike.

I don't want to trade with a broker who doesn't close the book when things get very hairy and their very business is at risk. 

I didn't care that some crypto guys couldn't catch the lift on a particular day during the bitcoin bubble in 2017 when IG temporarily closed the book and it's the same for punters desperate to get on GME on Friday.

I would rather the broker stays solvent for all the other clients in all the other markets than takes excessive risk on any one particular asset.

If the broker can't get prices from the liquidity providers via the clearing firms then you get slippage, if there is a serious possibility that the amount of slippage could wipe out accounts and bankrupt the broker then the broker needs to close the book and that's what they are going to do no matter what and the FCA will support not censor them.

 

 

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24 minutes ago, Caseynotes said:

Actually PhilPhilPhil is making some important points, I was sitting at the trading desk in Jan 2015 when the bottom fell out of the swissy, FXCM went bust and so very nearly did IG, big lessons learnt by traders and brokers alike.

I don't want to trade with a broker who doesn't close the book when things get very hairy and their very business is at risk. 

I didn't care that some crypto guys couldn't catch the lift on a particular day during the bitcoin bubble in 2017 when IG temporarily closed the book and it's the same for punters desperate to get on GME on Friday.

I would rather the broker stays solvent for all the other clients in all the other markets than takes excessive risk on any one particular asset.

If the broker can't get prices from the liquidity providers via the clearing firms then you get slippage, if there is a serious possibility that the amount of slippage could wipe out accounts and bankrupt the broker then the broker needs to close the book and that's what they are going to do no matter what and the FCA will support not censor them.

 

 

Again, Totally understand that and agree, However everything that could do damage to the broker is margin accounts. Cash accounts are no risk at all to the broker, This is where the issue is.

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15 minutes ago, Caseynotes said:

Actually PhilPhilPhil is making some important points, I was sitting at the trading desk in Jan 2015 when the bottom fell out of the swissy, FXCM went bust and so very nearly did IG, big lessons learnt by traders and brokers alike.

I don't want to trade with a broker who doesn't close the book when things get very hairy and their very business is at risk. 

I didn't care that some crypto guys couldn't catch the lift on a particular day during the bitcoin bubble in 2017 when IG temporarily closed the book and it's the same for punters desperate to get on GME on Friday.

I would rather the broker stays solvent for all the other clients in all the other markets than takes excessive risk on any one particular asset.

If the broker can't get prices from the liquidity providers via the clearing firms then you get slippage, if there is a serious possibility that the amount of slippage could wipe out accounts and bankrupt the broker then the broker needs to close the book and that's what they are going to do no matter what and the FCA will support not censor them.

 

While I accept the point you are making, it is also true that IG are not Robinhood.  They are a paid for Broker who are taking Retail customers money for a service that it appears that they cannot provide. I am directly impacted by this as I own, an admittedly small, stake in AMC (<1% of my portfolio) on the IG platform  

It's quite clear that IG are not sufficiently capitalised for the services that they are offering to the public.  While that might be acceptable when the service is free, its not when you are paying good money for it.

I think I am fully justified  in very annoyed that I now cannot "catch the lift" on AMC simply because IG cannot provide the services they are advertising to the public.  

 

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20 minutes ago, Caseynotes said:

Actually PhilPhilPhil is making some important points, I was sitting at the trading desk in Jan 2015 when the bottom fell out of the swissy, FXCM went bust and so very nearly did IG, big lessons learnt by traders and brokers alike.

I don't want to trade with a broker who doesn't close the book when things get very hairy and their very business is at risk. 

I didn't care that some crypto guys couldn't catch the lift on a particular day during the bitcoin bubble in 2017 when IG temporarily closed the book and it's the same for punters desperate to get on GME on Friday.

I would rather the broker stays solvent for all the other clients in all the other markets than takes excessive risk on any one particular asset.

If the broker can't get prices from the liquidity providers via the clearing firms then you get slippage, if there is a serious possibility that the amount of slippage could wipe out accounts and bankrupt the broker then the broker needs to close the book and that's what they are going to do no matter what and the FCA will support not censor them.

 

 

I think PhillPhill went about it the wrong slightly. Your explanation makes more sense and was not as aggressive.

I think he’s right in that a lot of people don’t know what they are talking about but why not explain. Putting all complex financial instruments aside like CFDs and Options Futures, spread betting. 
 

Could you explain why they restrict only purchase of particular stocks and not sales if it’s a clearing house issue/liquidity. 

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2 minutes ago, Johnnn said:

Again, Totally understand that and agree, However everything that could do damage to the broker is margin accounts. Cash accounts are no risk at all to the broker, This is where the issue is.

because the clearing firm using the brokers deposit has to cover the trade during the T 2 - T3 day settlement period.

Because of the shear volume coming through they were unable to do that even after hiking the broker deposits 10 fold.

see the 25 min vid in the 'Frustrated ...' thread posted today.

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IG I have been going through and cannot see any responses from you. As already stated your platform has been volatile at crucial moments last week and now you have stopped us buying GME.........why?

Do we need to find new platforms that don’t block us out?

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3 minutes ago, Ruscky said:

I think PhillPhill went about it the wrong slightly. Your explanation makes more sense and was not as aggressive.

I think he’s right in that a lot of people don’t know what they are talking about but why not explain. Putting all complex financial instruments aside like CFDs and Options Futures, spread betting. 
 

Could you explain why they restrict only purchase of particular stocks and not sales if it’s a clearing house issue/liquidity. 

good question and it relates to IG's own risk management policy. IG does carry some risk despite having a net off in-house where possible and hedge all else business model.

So they will match buys to sell in house but then suddenly all bets in-house are one way and then the whole retail market is one way so they can neither net off or hedge, they will let it go up to their own max risk and the close the book for new buys, then when sufficient longs have exited and their own risk declines they open the book again to new buys.

During late 2017 for bitcoin the book was opened and closed multiple times a day.

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16 minutes ago, Caseynotes said:

because the clearing firm using the brokers deposit has to cover the trade during the T 2 - T3 day settlement period.

Because of the shear volume coming through they were unable to do that even after hiking the broker deposits 10 fold.

see the 25 min vid in the 'Frustrated ...' thread posted today.

Which is why its completely understandable to stop all margin trading, If they have restricted it to cash and the brokers are taking 100% from clients account. Unless there is a liquidity issue somewhere in the chain, I can't see where the issue would be? After every trade you have to wait 2-3days to get the cash regardless because of this. Maybe the pre existing options/margin trades have far exceeded liquidity and they're trying regain some of that liquidity through stopping the opening of any new positions, Which intentional or not has a direct impact on the market.

Maybe they have overreached too early on. This was nobody else's fault so why punish the market?

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Ok thanks I understand, but you can see how people who don’t understand how brokers work will read into it as a market manipulation. 
 

all things being equal (they never are). It is market manipulation to some degree. Essentially you’re forced to hold or sell your stock which will have a negative impact on the price and has direct impact on the market. 

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I would like to pose a very simple question to IG. Whilst increasing  margins to 100% on shares like GME & AMC, due to volatility, is understandable, how does restricting buys on share purchases help anyone but the hedge funds currently losing money. By restricting further purchases, existing shareholders (which does not include me) are clearly being encouraged to sell and cannot buy, which will ultimately result in the share price cratering. Am I missing something ? 

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5 minutes ago, Johnnn said:

Which is why its completely understandable to stop all margin trading, If they have restricted it to cash and the brokers are taking 100% from clients account. Unless there is a liquidity issue somewhere in the chain, I can't see where the issue would be? After every trade you have to wait 2-3days to get the cash regardless because of this. Maybe the pre existing options/margin trades have far exceeded liquidity and they're trying regain some of that liquidity through stopping the opening of any new positions, Which intentional or not has a direct impact on the market.

Maybe they have overreached too early on. This was nobody else's fault so why punish the market?

yes there were definitely liquidity issues which was why GME price was whipsawing hundreds of % during the settlement period for many trades. No wonder liquidity provides, clearing firms and brokers were turning white with fear at the out of control risk they had already taken on and their lack of enthusiasm to take on more.

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13 minutes ago, Ruscky said:

Ok thanks I understand, but you can see how people who don’t understand how brokers work will read into it as a market manipulation. 
 

all things being equal (they never are). It is market manipulation to some degree. Essentially you’re forced to hold or sell your stock which will have a negative impact on the price and has direct impact on the market. 

yes, brokers decided they were not willing to take on more risk but always made sure anyone holding a position could get out if they wanted and with that the FCA will back them up. If you tried to get out but the platform did not let you those are the types of claims IG will reimburse loses for.

 

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I understand it’s down to clearing house refusing the brokers essentially. 
 

forgive me for not potentially understanding this but how does it work that you can short a stock and make billions and clearing houses have no issue in covering that. i.e in the case of hedge funds. I understand that not all platforms use clearing houses and go through DTC directly. 

If I can sell then there is someone who is buying, the clearing house still forwarding the collateral? 

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The bulk of the problem lies with hedge funds who take out impossibly large short positions they know they can’t cover if **** goes down. They then try to leverage companies into nothing (shitter) but at the end of the day positions have to be covered and the market suffers. 

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@PhilPhilPhil

No doubt this is a liquidity issue at its core. But if with all your knowledge and intellect you cant see how  engineering unidirectional trade on an equity will cause significant downward pressure on its price that disproportionately damages retail and benefits wall street then im afraid the abuse you are spewing should really just be redirected to yourself.

No matter the 'technical' justification, if those are truly the facts then trade should be halted on the stock until such time as the liquidity issue can be rectified. There should not be a restriction on only one side of the trade while wall street can freely BUY and SELL to cover their losses and in some cases load up even more short positions which is further stacking the game.... If the equity cannot even be purchased, then of course its value will decrease. The friction that would otherwise support the price action has been artificially eliminated.

That is not a free market.

That is clear market manipulation. Whether nefarious or not, to argue otherwise is absurd.

If there is a systemic technical issue then trading on those equities should be halted.

Not this one sided BS we are witnessing play out in plain sight.

If you cannot see nor comprehend or acknowledge that, then there is no hope for you. You've been sipping the Kool-Aid too long.

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Even if it's a matter of risk for IG, there are clearly other brokers who are big enough players to tolerate it, or are willing to take the risk to get some new traders on board. I like the interface here but there's plenty with less restrictions and lower fees. And the bottom line is, they're going to let me day-trade volatile stocks, whereas this one clearly isn't.

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1 hour ago, Ruscky said:

Could you explain why they restrict only purchase of particular stocks and not sales if it’s a clearing house issue/liquidity. 

Its because the clearing houses also have to front the collateral for our non-leveraged purchases until settlement, even if our broker has the money in our account, the clearing house has to cover the transaction with their own capital.

They have no capital burden on a sale.

Usually they only need to cover 2% of the trade, but that has been raised to 100% on these equities and thus the capital requirements to support these trades has increased massively.

That said, this is now old news. This was imposed last week. There has been plenty of time to prepare for this and increase capital to cater to this new requirement.

If this new requirement is too hard for the clearing houses to honor (which is apparently happening all across the world now) then trading in those equities should be halted as the only entities affected by these restrictions are retail investors while the institutional market makers can still freely trade being insulated from this liquidity crisis by virtue of the fact that they do their own clearing.

No matter the technical issue - the way this scenario has been allowed to play out effectively takes an entire team off the field while the game is allowed to continue with the other side on field kicking the ball around however they see fit.

Market.

Manipulation.

 

Edited by au_trader
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On 30/01/2021 at 21:44, Kodiak said:

" It's long past time for the SEC and other financial regulators to wake up and do their jobs - and with a new administration and Democrats running Congress, I intend to make sure they do.""

Warren

I hope this gambling with meme stocks doesent make life harder for the rest of us traders

 

This is my big worry.  I want to free to make my own decision on what i can and cannot risk.  Last thing we need is yet more regulation

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I wonder whether this person hasn't hit the nail on the head, or at least is heading in the right direction, regarding all this unprecedented trading restrictions on GME (and AMC to a lesser extent).

https://www.reddit.com/r/wallstreetbets/comments/l97ykd/the_real_reason_wall_street_is_terrified_of_the/

Worth a read for sure. Personally, to me at least, it does seem to be a much bigger world wide reaction involving so many brokers and firms than I would have thought to have been deemed necessary if it was _just_ about paying out let say 3x or 5x for pricing (especially as was the case early on, where instead they just doubled, tripled, quadrupled down).

Edited by Deathers
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