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Index adjustments for dividends - effect on open trades and on technical support and resistence


Question

This afternoon the Australia 200 CFD was adjusted down for dividends as shown above. The problem I have with this is that, whereas our cash account is adjusted to compensate for this, our stops are not adjusted so I was triggered out of a trade thereby losing my risk margin. The real market made no such move and, in fact, rose to the level I had set minutes earlier to get out of the trade for breakeven.

So I lost money on the trade only because of the adjustment made by IG. I checked FXCM and OANDA platforms to confirm that they had made no such adjustment, and the cash market did not reflect this adjustment either.

Really, if these arbitrary index adjustments are to be made, stops should automatically be adjusted by the system also. Further, if we have open positions in any index that is about to be adjusted, we should be sent a notice at least 24 hours before the adjustment so we can decide to exit our positions as we do not know how much the error will be.

I believe that we should be compensated for losses on such trades as the stop was not really hit. Further, the new arbitrary price level of the index going forward no longer relates to the real-world price on the exchange, and the support and resistance levels form the historic prices on the charts become meaningless. This is all very confusing and I am unclear as to how IG expects us to deal with these factors.

I would welcome some comments on this as I am unsure how to move forward in such an environment.

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