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Cannot go long on bitcoin this morning?


alex67

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Hi Alex,

 

We hedge our exposure to client positions by trading cryptocurrency on the underlying market. Purchasing and holding cryptocurrencies creates several unique challenges, one which is wallet risk (the risk of losing currency held). We therefore have internal limits which determine how much crypto we can hold in total, without creating an unacceptable business risk.

 

When these limits are reached we restrict clients from opening fresh long positions, until our exposure returns to within our limits. 

 

I appreciate this can be frustrating, but hope this explains why we do so. We do try to offer our crypto pairs as widely as possible, and only restrict trading when necessary.

 

Feel free to comment below with any questions.

 

Thanks,

 

Ludwik

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I appreciate you have to hedge but in my opinion the IG BTC SB offering is extremely poor in comparison to some competitors and puts the trader at such a disadvantage you would be very unwise to try to use it for trading during volatile conditions.  You can't even use it to open a long position on BTC while the market is quiet - it says "You cannot buy this market to open" for hours today - no doubt because the price dipped down aggressively earlier and your hedge criteria is reached.

 

This time I took video and pictures showing some of its behaviour for anyone interested.

 

Hedging issue aside, its hardly a fair spread betting when you cannot even open a position at all when the price is competitive.  I had no such 'bias' trouble on two other platforms.

 

Also I noticed if the BTC market moves aggressively, the platform freezes, not permitting you to close, alter or even see your positions.   It will often say 'ring a phone number to deal' intermittently, and disabling the order controls on and off. 

 

Monitoring pricing from other sources, I know several positions were profitable but by the time your platform allows the user control, the profit had been eroded.

  

Frequently, we get 'Please call 44 (020) 7896 0000 to deal on this market'

 

Today, BTC spreads were 27.5 a lot of the time, a lot worse than your competitors.

Requotes - price invalid, all too often when the market is moving.

 

In my opinion, your BTC SB offering is not viable for a trader except someone who opens the occasional long position - and even then it might not let them if its a low price :).

 

Newbs beware, not for me this one.

 

 

 

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Hi Alex, 

 

I appreciate your sentiment, however, the reason why we're reaching these limits is due to the volumes of spread bets and CFD trades we're currently receiving. 

 

As mentioned by my colleague, there are risks involved in trading and holding BTC. We as an institution, like many others, have to manage this risk to an absolute risk tolerance.

 

This can not only happen on Bitcoin but also on other markets, for example shares. If we own too much of a share, we will need to make this public. This process then means that we will need to declare when we trade the shares which will cause issues when hedging which means that we will then not allow further trades on a particular share. This procedure is less frequent on shares as the volume of trades will be less concentrated but has occurred in the past. 

 

I hope this has cleared up some of the opaqueness in our hedging process. If you need like you need more details, please let us know. 

 

Thanks, 


Spencer 

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There was a large drop this morning, which should have benefited your hedging the long positions?  Yet we cannot open long positions from 7100 all the way to 7400, yet we could go long at late 7300 to 7400 yesterday.

 

Bottom line is it doesn't really matter the reasons, the product is not viable to anyone who hasn't got a long position in a while back.  I'm not sure you should be advertising this product on your web site unless you make it clear to customers they may only be able to short BTC...

 

Plus you ignored the issues such as when I open a successful short, both your iOS and web platform locks up during volatile moments, trimming my profit significantly sometimes as I am unable to close off when I want.

 

Maybe you need to review your exposure as 212 and Plus are not limiting me on long positions right now.

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TrendFollower wrote:

This is happening too often. If IG cannot improve its Bitcoin trading offering and experience then it must offer another way to gain exposure to Bitcoin.

 

May I suggest the following:

 

* - Bitcoin Investment Trust (It may trade at a premium to the Net Asset Value)

 

* - XBT Tracker One Bitcoin in EUR

 

* - XBT Tracker One Bitcoin in SEK (Swedish Krona)

 

Hi  - unfortunately Bitcoin Investment Trust trades OTC rather than on a centralised exchange, and therefore we are unable to offer it. Furthermore the Tracker One options are both ETN's which we universally can't offer. This mainly comes down to costs, and a significant margin required by our broker, high execution costs, and additional funding requirements. 

 

In the future please let me know any asset you are looking to add and we can review them on a case by case basis. 

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Hi everyone - I just wanted to let you all know that over the last few days I have been collating this feedback and will be passing it on to the FX & crypto dealing desk, and to senior management. I understand how frustrating it can be to get rejected on a trade and I want to reassure you that we always try and reduce the likelihood of any rejection across our deal execution service. It's in our interest not only from a financial perspective (IG generates revenue based on dealing spread and commissions which obviously requires a successful execution), but also from a customer service perspective.

 

For those who are unaware, 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'. This has been posted elsewhere on the IG Community, so you may have already read it but I thought it may be useful for people in this thread.

 

When you open a long position on the trading platform that trade feeds into IG's total global exposure for that asset. We do not run a speculative position on any market including bitcoin, ether and other cryptocurrencies. 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 in which it is trading. It is never in our interest for a stop or limit to be triggered incorrectly, and it is only important that the market actually trades at those levels and that the best execution is met every time basis your stops / limits / orders. We do not reject trades based on the market’s direction, but rather on whether or not our internal limits are met. Secondly, 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. This business model has allowed IG to become a leader in spread betting and CFD trading.

When there is an overwhelming sentiment on any one asset type in a single direction, IG’s global exposure will move to our maximum risk levels one way or the other. With bitcoin and ether it's common to see a strong speculation in one direction. We can therefore become max long or max short more often than in other markets, and this causes that specific asset to be restricted from trading until we see more buyers or sellers in the market. We have internal limits on many tradable instruments however the liquidity for these are far greater. There are also some unique risks for crypto currencies specifically which need to be taken into account (for example the risk of holding 'x' amount of bitcoin in a wallet).

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.

 

I hope the above clarifies things, and let me just reiterate that all sentiment will be passed onto the relevant parties. We continue to review, refine and improve all offerings at IG, from platforms to deal execution, and we shall continue to do this for our crypto offering.

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Hi all 

 

As promised I have done a crypto comparison of the cost of trading with IG v.s other prominent leveraged retail providers. Please find the table available here, which takes each providers data and extrapolates it out for a true cost in GBP >> https://www.ig.com/uk/bitcoin-btc

 

I hope this gives some transparency on the cost of trading bitcoin with IG. 

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This is ridiculous. My strategy is to open long on bitcoin and buy on dips. While I understand IGs hedging and use of limits it means I am not able to trade to my strategy. I have not been able to buy since Friday. Does anyone have any other platforms they recommend

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Must say I'm really disappointed with IG in regards to this situation. I can see why the process is in place but its not very clear on the site that this would go on for so many days - I already had a long trade open from a few weeks back, but the UI did not make it clear that longs were blocked on the BTCUSD market. Had I have known I would not have sold my previous position.

 

The process effectively ruins any long trading strategies that rely on dip purchases. Like others above many have been waiting since Thursday/Friday for long trade setups, even after a pullback of 2000+.

 

I've ended up having to register with eToro in order to trade Bitcoin, but the registration process means further delays.

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I just called IG to ask about this problem and was fobbed off. The buy and sell buttons remain live, I suggested that the buy button in blue was changed to grey to show that long positions are disabled on cryptos at this time! IG Index need to email all their clients and advise that there is a permanent block on long positions and to save their clients wasiting time they have kindly greyed out the blue buy button. I have asked the CS person I spoke to just now how much IG Index have lost on Cryptos so far as clearly there is more to it than internal exposure limits. IG need to communicate via a mass email to explain themselves, not try and hide this problem!

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While I like IG products, the company on the whole and their customer services, I can't take their crypto offering seriously and went elsewhere a while back which was much more profitable.  You might be able to use it if you just take long positions and sit on them a while and when there's not much price action going on, but it never worked for me reliably when there was significant action going on - I like to trade frequently and this platform wouldn't work for me.  Their spreads went from 20 to stupid 3-digit numbers which meant only long bets made sense.

 

The worse thing I noticed about it was it let me open a short, but did not permit me to close it - for ages - that's bordering on irresponsible and robbed me :-).  I'd be very careful with an expensive short position and always use stops.  If its big exposure, you might want to pay for a guaranteed stop as some of the slippage on crypto is nuts.

 

Ironically, when their platform doesn't let you do anything, its a good signal there's something interesting going on and money to be made :-).

 

 

There are other options.. proper crypto exchanges, futures and ETFs not far behind, and while SB shoulda been an easy way to 'trade' crypto without all the wallet and setup nonsense, it's not that hard and having a Wallet is a useful thing anyway.

 

 

 

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pirate wrote:

These market manipulating crooks switched to 100% margin overnight when I was holding 100 ETH contracts at $250

 

Run as far away from them as possible!

Hi  - we haven't increased ETH margin to 100%. If you would like to go through a reason for an specific action or trade on your account please give one of our sales traders a call and we can go through this one on one over the phone. Best.

 

Others in the thread maybe interested in this post.

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If anyone can recommend another platform rather than IG please do...

 

Still no Long positions available on Bitcoin “due to ‘Internal Limits’ being reached but you can Short” I was told over the phone. IG only allow you to lose your money and are not a suitable platform to handle Bitcoin, maybe in a few years they will have gained some experience, as for now, stay clear and pass the message on.

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