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Cannot open position at 5:30 am - North Korea News

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After 4:00 a.m Bitcoin started to trend upwards due to most probably a reaction to North Korea's Hydrogen bomb test. I tried to open a long position but could not do so. 

 

Yes I know the answer - liquidity. 

 

Why offer a product to your customers when they cannot trade it when the time is to profit due to a trend?

 

Very frustrating.

 

 

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Hi - Let me explain how our Cryptocurrency offering works on the back end so you have a clearer understanding of why Bitcoin and Ether are sometimes 'unlongable' or 'unborrowable'. 

 

When you open a long position on the trading platform that trade feeds into IG's total global exposure for that asset. We don't run a speculative position on any market, so ideally we'll have a number of clients with contrasting views who will net off against each other. This is important for a number of reasons. First it means that we never have a view of where a market is trading or the direction it is trading in - it is never in our interest for a stop or limit to be hit, and it is only important that the market actually trades at those levels and that the best execution is hit every time basis your stops / limits / orders. Second, it means that as a company if there is ever a large market move in any one direction, IG will be flat and continue to be able to offer services to our clients. 

 

When there is an overwhelming sentiment on any one asset type in a single direction, IGs global exposure will move to our maximum risk levels one way or the other. With Bitcoin and Ethereum there currently is a strong speculation in one direction. We therefore very quickly become max long or max short, which causes that specific asset to be restricted from trading until we see more buyers or sellers in the market to even out the exposure. 

 

I appreciate that this can be frustrating, however it does mean that we can continue to offer leveraged trading on Cryptocurrency. We do need to have these limits in place so that our risk levels are kept proportionally adequate to the underlying risk of Cryptocurrencies in general. We periodically review all offerings and limits, and it obviously isn't in IGs interest to restrict trading as we only make money on these commissions, however it does need to be weighed up with the bigger picture. 

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