First time FX trade

[ducatiman998]

Hello community,

I have not traded pairs of currencies before. I have done days of research before deciding to bet between two currencies which are the Turkish Lira and the Euro.

I was expecting to find TRY-EUR so I could either bet on the Turkish Lira gaining on the Euro or conversely betting on the Euro losing ground on the Turkish Lira. 

However I can only select EUR-TRY from the list of currency pairs. I can't see a way to invert the pair so the base currency would be the TRY.

But as I understood, to "buy" would mean going long on the Euro because I believed that would appreciate, or short on the TRY because I believed it would lose value on the Euro.  

The "BUY" and "Sell" both quote how many Lira it costs to exchange for one Euro, a spread within the 35. 's.

What I want is to see the fraction of Euro in the quote pair to be currently traded for 1 Lira, somewhere in the 0.029's.

Could anyone help me as to how to bet for the TRY or against the EUR if the currency pair is listed as EUR-TRY and not TRY-EUR? 

I did search the whole list over and over to see if I was missing this option. 

Many thanks in advance

Steve

[alpen]

I think you've highlighted a problem.

If you want to go long the TRY vs the EUR you can SELL the EURTRY pair to open a position. You are now long the TRY (vs the EUR) which is the position you're looking for.

However, the EURTRY pair is currently quoted at ~ 350,470 (which = EUR 10,000) and the minimum trade size is £1. So the minimum £1 bet is for approx TRY35,0470 or EUR10,000 - requiring a margin of £87,600 (for the minimum trade size!). I'd say they've made an error in the sizing / denomination as you can only trade in very large amounts.

[alpen]

2 minutes ago, alpen said:

I think you've highlighted a problem.

If you want to go long the TRY vs the EUR you can SELL the EURTRY pair to open a position. You are now long the TRY (vs the EUR) which is the position you're looking for.

However, the EURTRY pair is currently quoted at ~ 350,470 (which = EUR 10,000) and the minimum trade size is £1. So the minimum £1 bet is for approx TRY35,0470 or EUR10,000 - requiring a margin of £87,600 (for the minimum trade size!). I'd say they've made an error in the sizing / denomination as you can only trade in very large amounts.

I made missed a zero out there in one of those figures but the point stands - you can only take out an extremely large position on that pair on IG.

[TheGuru12]

Isn't the TRY considered an exotic pair? 

[alpen]

7 minutes ago, TheGuru12 said:

Isn't the TRY considered an exotic pair? 

Yes, on IG it is listed under exotics. Does that make a difference to the denomination / minimum sizing quoted by IG?

[ducatiman998]

4 hours ago, alpen said:

I think you've highlighted a problem.

If you want to go long the TRY vs the EUR you can SELL the EURTRY pair to open a position. You are now long the TRY (vs the EUR) which is the position you're looking for.

However, the EURTRY pair is currently quoted at ~ 350,470 (which = EUR 10,000) and the minimum trade size is £1. So the minimum £1 bet is for approx TRY35,0470 or EUR10,000 - requiring a margin of £87,600 (for the minimum trade size!). I'd say they've made an error in the sizing / denomination as you can only trade in very large amounts.

Thanks for clarifying, the means to achieve the desired position is clearer now. I have also worked out the reason for the large margin, they are throwing in Istanbul airport as part of the deal! Seriously though, I appreciate the time you have taken to dissimilate the question and reply.  

[alpen]

It's worth setting up a demo account and using it to check out the size of your trade which is not always all that clear if you're trading a new market. It's what I did to check the EURTRY and where it showed the £87,600 deposit for the minimum £1 bet (you don't actually have to place the trade - you'll see the margin amount when you press the Sell or Buy button and before pressing the 'Place Deal' button (though it might work a bit differently if you have 1-Click set)).

And for currencies where the pair is XXXYYY you're going long XXX if you BUY to open and you're going long YYY if you SELL to open. So it doesn't really matter that the pair is XXXYYY rather than YYYXXX you just open in the opposite direction, though the size of the bet is impacted.

 

[neueneuen]

@alpen is right overall, but I think demo account requirements differ from live account, hence him being wrong on some details (or maybe he's simply in a different market than me where they're different).

Minimum bet for EUR/TRY is £0.5 and the current Tier 1 margin requirement is 25% (was 7.5% not long ago and no one knows if it goes back to 7.5% anytime soon). Therefore, the minimum margin (aka deposited money) required would be around £51500 to open the minimum (quite large) trade.

USD/TRY is slightly better, minimum bet is £0.2, so the minimum (still quite large) trade would require around £16150 margin.

If it helps, you can open smaller trades on a CFD account, where EUR/TRY Mini exists, but of course this would have different tax implications than spread betting.

Also, @ducatiman998 make sure you understand FOREX swaps (holding position overnight) before you go anywhere near TRY. TRY swaps are extremely expensive (and if you're trying to earn the swap by shorting, the swap bid/ask spread is very high and volatile and your credit might be much lower than you anticipate) and if this is really your first FOREX trade, you're in for a very rude awakening once you see them applied. Just wanted to flag this for you - Turkish lira is probably not the best pair to start trading FOREX with.

Edited May 29 by neueneuen

[alpen]

6 hours ago, neueneuen said:

..I think demo account requirements differ from live account...

Minimum bet for EUR/TRY is £0.5 and the current Tier 1 margin requirement is 25%

@neueneuen Good point - min bet on demo account is £1. Should always verify on live after checking on demo.