Trade against customer

[manafull]

Thank you @JakubIG and @Caseynotes !!

Just to recap with my screenshot taken from the ASX200 Index value page - please comment only when needed:

[JakubIG]

@manafull Incorrect. The value of the ASX 200 Index will be close to the ASX 200 Cash contract.

[Caseynotes]

I can add to this as I've often spent days watching the IG Dax cash market with the Exchange price in view.

They will usually be within a few points of each other but change positions with one leading briefly then the other. Sometimes they separate by 5 points or so and very occasionally and very briefly by 10 or 15 but neither one or the other always leads or lags, more like they are constantly pirouetting around each other which is a shame really as was unable so find any arbitrage advantage  😢

[manafull]

Hi @JakubIG,

On Wednesday (last week), you provided explanation to Cash and Future, which I replied by asking the following:

With what you said last Wednesday (above) Now, you are saying the the following:

"The value of the ASX 200 Index will be close to the ASX 200 Cash contract. "

Why is that in relation to what you said above, where you said ASX 200 " Future" coming directly from the exchange (ASX 200 Index value) and ASX 200 "Cash" is derived from Future (and from Bloomberg) ? As now you are saying "ASX 200 Index value" is more or less closer to "ASX 200 Cash"?

 

I am sorry as it looks like confusion remains, as I am just unable to match between what you said last Wednesday and just now.

 

As we have spent too much time here to discuss the value of "ASX 200 Index", "ASX 200 Cash" and "ASX 200 Future", though I am still confused in terms of their relationship with what you said between now and then, I am sort of getting to note that these values are all different and, fundamentally, you have pointed out the important points below, which I appreciated:

1) ASX 200 Index is not tradable

2) ASX 200 Cash is for trade on IG and it can incur overnight funding costs when applicable (I observe IG spread from 1 point to 4 points in different trading sessions, with no expiry; overnight funding costs for entire weekend may incur also, if the Friday cutoff time is lapsed with any outstanding position carried over)

3) ASX 200 Future is for trade on IG and it will not incur overnight funding costs (I observe IG spread 7 points with expiry, however it seems that there is no modelling support for "ASX 200 Future" trading data analysis by PRT tooling, which only covers the "ASX 200 Cash", which is a shame)

 

Though I am still confused with what you said in the relationship among these figures, I think it is not a big deal in this Forum. I think other folks may have already understood and would not be too fussed on this.

 

I am ok to move on, and thank you very much for your help @JakubIG and  @Caseynotes, as always.

 

 

 

 

 

 

 

[gxcbv]

On 08/07/2021 at 11:22, manafull said:

Hi @gxcbv @Administrator,

Thank you for your comments.

Now, I have the simple question that is perhaps of the most core interest for every retail traders like me, if you can pin point and clarify (assuming "L2 trader" is the same as "Pro Level 2" Trader that a Retail Trader (i.e. L1) can apply on IG):

This question is regarding the CFD trading (i.e. ASX 200 Index CFD trading), in terms of placing a "Deal" at real time between Pro L2 Trader and a Retail Trader and using IG platform:

For a Real time Deal:

1) Will the ASX 200 Index displayed in the Deal be as the same Real Time ASX 200 Index, for both L2 Trader and Retail Trader?

2) Will the ASX 200 Index be manipulated by IG platform against the Retail Traders, Before and After they placed the Deal?

 

If the answer to 1) is "Yes, it is the Same Real Time ASX 200 Index for both L2 and Retail Traders when placing the Deal" AND 2) is "No, IG platform can not manipulated the ASX 200 Index against the Retail Traders before and after they place the Deal", Then it makes all common sense as it shows the solid foundation of fairness (no discrimination) for placing a Deal whether you are a L2 Trader or Retail Trader on IG.

 

At this stage I have been a Retail Trader on IG since Jan this year, though I am planning to apply for the Professional Level 2 Trader next year, I don't think IG is able to, or allowed by the regulation to manipulate the ASX 200 Index in Real Time to disadvantage clients before or after they place a Deal (at real time).

 

Thanks.

 

Pro trader has nothing to do with L2 Dealer. You can be pro trader but still can't use the L2 Dealer because IG has made it almost impossible. Imagine you have a software from 1990s and incompatible windows and other problems.

To answer question on spreads, the indices are different from the real index. They have larger spreads so if index in 7200-7201, IG can be 7190-7220 or anything they want at any time. The whole point of CFD is that the market maker can adjust the spread. Often times during volatility, you would see formidable large spreads so you cannot sell because you will take huge loss on spread.

[MongiIG]

Hello,

 

Your questions are being answered - IG community

Thank you all for your contributions and asking questions to the 'Trade against customer' forum. We wanted to let you know we have picked up questions from this forum and we thought it was best for Adam Blemings, IG’s Head of trading, to address them in a webinar.

 

We would love to see you there, please feel free to attend. The webinar is taking place on Monday 6th September 2021 (10am -11am BST). To sign up please use the following link: https://attendee.gotowebinar.com/register/3244908820136741133

 

All the best,

 

IG community team

[manafull]

Hi @MongiIG,

Thank you for organising the webinar where Adam Blemings(Head of Trading) helped answer some of the points in this forum... It was well received...

For the question that I raised in the webinar, if I can put it here:

"

Q: Can you please explain that, for ASX Index trading, how IG transitions the ASX Index from before 4pm to after 4pm? I observed the following happened right after 4pm, 1 September 2021 (last week), when the ASX Index suddenly fell more than 30 points - neither did it follow any technical analysis, nor did it follow the ongoing US S&P 500 index (future) which was going up strongly during that time!

Q: did that completely unreasonable / abrupt big fall from IG market was to recover the loss that IG suffered during that day?

"

If I got it correctly, Adam suggested the above scenario might have been caused by the "dividend adjustment" event, so if for traders who were buying/in-long position but suffered the sudden loss, IG should provide the credits back to them etc..

 

Though I had once experienced this "dividend adjustment" event before, I have never ever experienced such a massive / insane fall of more than 30 points right after the 4pm, especially the ASX Index was at its peak of the day (before 4pm) whilst the US S&P 500 (future) was going up strongly...

 

As per your experience, do you see this "out-of-blue" sudden fall of 30 point of ASX 200 Index at 4pm, was common under the "dividend adjustment" event? Though luckily I had already closed my position with gain by 3:50pm whilst the index was still at its peak that day, I was pretty sure someone could have contracted heart-attack with this insane 30-point fall, if had their position carried over into 4pm ...

 

Would IG consider the following to improve for the future service, as below:

Upon any big "dividend adjustment event" that could trigger massive change of the index in a trading day, can IG consider sending the early warning to all clients (i.e. by SMS or putting Warning Flag over the Trading dashboard / buttons) ? Please note that though I knew there was a dividend adjustment routine schedule published on every Monday somewhere on IG website, I think that's **not enough** to warn people of the "catastrophic" event like this scale.

 

Any thought?

 

Thanks

 

 

 

Edited September 6, 2021 by manafull

[MongiIG]

On 02/09/2021 at 18:28, MongiIG said:

Hello,

 

Your questions are being answered - IG community

Thank you all for your contributions and asking questions to the 'Trade against customer' forum. We wanted to let you know we have picked up questions from this forum and we thought it was best for Adam Blemings, IG’s Head of trading, to address them in a webinar.

 

We would love to see you there, please feel free to attend. The webinar is taking place on Monday 6th September 2021 (10am -11am BST). To sign up please use the following link: https://attendee.gotowebinar.com/register/3244908820136741133

 

All the best,

 

IG community team

Hello IG Community,

Thank you all who were able to attend the Product and Dealing webinar. In case you missed it, not too worry. Please kindly click on this link to view the recorded webinar session: https://attendee.gotowebinar.com/recording/6781931074149248520

All the best,

 

IG Community Team

[MongiIG]

22 hours ago, manafull said:

Hi @MongiIG,

Thank you for organising the webinar where Adam Blemings(Head of Trading) helped answer some of the points in this forum... It was well received...

For the question that I raised in the webinar, if I can put it here:

"

Q: Can you please explain that, for ASX Index trading, how IG transitions the ASX Index from before 4pm to after 4pm? I observed the following happened right after 4pm, 1 September 2021 (last week), when the ASX Index suddenly fell more than 30 points - neither did it follow any technical analysis, nor did it follow the ongoing US S&P 500 index (future) which was going up strongly during that time!

Q: did that completely unreasonable / abrupt big fall from IG market was to recover the loss that IG suffered during that day?

"

If I got it correctly, Adam suggested the above scenario might have been caused by the "dividend adjustment" event, so if for traders who were buying/in-long position but suffered the sudden loss, IG should provide the credits back to them etc..

 

Though I had once experienced this "dividend adjustment" event before, I have never ever experienced such a massive / insane fall of more than 30 points right after the 4pm, especially the ASX Index was at its peak of the day (before 4pm) whilst the US S&P 500 (future) was going up strongly...

 

As per your experience, do you see this "out-of-blue" sudden fall of 30 point of ASX 200 Index at 4pm, was common under the "dividend adjustment" event? Though luckily I had already closed my position with gain by 3:50pm whilst the index was still at its peak that day, I was pretty sure someone could have contracted heart-attack with this insane 30-point fall, if had their position carried over into 4pm ...

 

Would IG consider the following to improve for the future service, as below:

Upon any big "dividend adjustment event" that could trigger massive change of the index in a trading day, can IG consider sending the early warning to all clients (i.e. by SMS or putting Warning Flag over the Trading dashboard / buttons) ? Please note that though I knew there was a dividend adjustment routine schedule published on every Monday somewhere on IG website, I think that's **not enough** to warn people of the "catastrophic" event like this scale.

 

Any thought?

 

Thanks

 

 

 

Hi @manafull

Glad you could attend with us live and that it was well received.

Thanks for your post. Indices are made up of stocks from a certain exchange. The Australia 200 being stocks on the ASX. On this day multiple stocks paid out a dividends resulting in a large adjustment (34.63). On the ex div date we adjust the index by this amount. We lower the price of the index. However, if a trader was holding a long position, meaning the adjustment wouldn't be favorable for them, we would credit their accounts with the amount lost at the time. If a trader was holding a short position we would debit their account.

For example, if you had one A$1 contracts long and held the position through the dividend adjustment your position profit would fall by A$34.63 but you would receive a A$34.63 credit to your IG account at the same time of the adjustment.

 

We do post on a weekly basis on the community so you can be aware of them before trading.

 

All the best - MongiIG

[manafull]

17 hours ago, MongiIG said:

Hi @manafull

Glad you could attend with us live and that it was well received.

Thanks for your post. Indices are made up of stocks from a certain exchange. The Australia 200 being stocks on the ASX. On this day multiple stocks paid out a dividends resulting in a large adjustment (34.63). On the ex div date we adjust the index by this amount. We lower the price of the index. However, if a trader was holding a long position, meaning the adjustment wouldn't be favorable for them, we would credit their accounts with the amount lost at the time. If a trader was holding a short position we would debit their account.

For example, if you had one A$1 contracts long and held the position through the dividend adjustment your position profit would fall by A$34.63 but you would receive a A$34.63 credit to your IG account at the same time of the adjustment.

 

We do post on a weekly basis on the community so you can be aware of them before trading.

 

All the best - MongiIG

Thank you @MongiIG

From checking out the Weekly Post of the Dividend Adjustment event, I am a bit surprised to see that the figure of Dividend Adjustment on 1 September that day was a Whopping "35" for ASX 200, as below:

So put in this way, as an ASX-200 (cash) day trader, I would have acted with my highest caution, if I knew it coming that day...

Because, most of the time the Dividend Adjustment for ASX-200 is small (i.e. 1, 4 or 5)  but this "35" figure is gigantic and it is clearly out of band from the other, as you can see from the above table ...

 

Therefore, as I suggested earlier, would IG consider doing better service by sending (i.e. Pushing) the alert of any incoming Gigantic size of Dividend Adjustment like this (say any size > 5 - 8 points of adjustment) to our fellow traders, to ensure the "catastrophic style" of panic is avoidable?

 

IG can either SMS to our phones or consider popping up the alert over the trading dashboard...

 

Thanks again for your support, as always.

 

 

[MongiIG]

5 hours ago, manafull said:

Thank you @MongiIG

From checking out the Weekly Post of the Dividend Adjustment event, I am a bit surprised to see that the figure of Dividend Adjustment on 1 September that day was a Whopping "35" for ASX 200, as below:

So put in this way, as an ASX-200 (cash) day trader, I would have acted with my highest caution, if I knew it coming that day...

Because, most of the time the Dividend Adjustment for ASX-200 is small (i.e. 1, 4 or 5)  but this "35" figure is gigantic and it is clearly out of band from the other, as you can see from the above table ...

 

Therefore, as I suggested earlier, would IG consider doing better service by sending (i.e. Pushing) the alert of any incoming Gigantic size of Dividend Adjustment like this (say any size > 5 - 8 points of adjustment) to our fellow traders, to ensure the "catastrophic style" of panic is avoidable?

 

IG can either SMS to our phones or consider popping up the alert over the trading dashboard...

 

Thanks again for your support, as always.

 

 

Hi @manafull

You are welcome. Thank you for your suggestion and feedback, I will gladly pass this on to our dealing desk team and please write in to us your suggestion at helpdesk.au@ig.com 

 

All the best - MongiIG

[manafull]

Thank you @MongiIG

I have just emailed the help desk on this service enhancement request...

Just wanted to add to here that, the benefit of this service enhancement request is two-fold:

1) IG Traders will be better informed for this type of massive event,  be prepared and enjoy better trading experience on IG platform

2) IG should have less hassle in scrambling to reimburse those folks who were in long-positions suffering from this type of event

 

Thanks again.