Complete noob here

[Guest Emil]

Hi all,

Could you help me out a bit with IG platform use ?

I’ve got practice account with T212but not very happy with them recently. Now I’m here with IG practice account.

On t212 you start with 10k and if you want to open a position with bitcoin you need margin of 6% of the current price of the instrument.

I’ve tried to buy bitcoin on IG (2 contracts) and a message showed I need to deposit 50k more?

Is one contract more than one bitcoin?

Why when I put a stop loss distance of 30 points ( I guess that £30) and my lost is terrifying £6000?

Basically how IG works ?

I was planning to invest £2000 when I get my head around how everything works but by the looks of it my 2k will be not enough.

Thanks in advance for your help

[Guest anders]

 You don't say if you're using CFDs or Spreadbets. I don't use CFD on IG, but I can explain spread betting:

 

When you place a spread bet, it's done in pounds per point. So using Bitcoin USD as an example, price is around 9600. If you bet £1 per point, you're total position size is 9600 X £1 = £9600.

£5 per point = 9600 x £5 = £48,000

£10 per point = 9600 x £10 = £96,000

Your margin requirement is based on the total position size, with possibly some other factors. You can read up here:

https://www.ig.com/en/charges-and-fees/margins

 

If a stop at 30 points has a potential loss of £6000, that would be a bet at £200 per point, wow!

 

(A stop of 30 points is way too close for something volatile like Bitcoin. The spread alone will likely close you out straight away.)

[Guest Emil]

Thank you very much for your help!

That’s what I actually don’t understand. Why t212 is different to IG what type of trading is t212?

What is better cfd or margin trading for bitcoin on IG ?

[Guest anders]

 I've never heard of T212.

 

IG have a good explainer here on the differences between CFD and Spread betting. A key point is that CFD trading is subject to capital gains. Spread betting is considered gambling and so therefore is (normally) tax free. As ever with HMRC, there are caveats, some details here. 

 

IG offer guaranteed stop losses, which can be useful on something like Bitcoin. One thing to note is that IG's trading on Bitcoin isn't 24/7 (at least with spread betting, I've never used their CFDs). This means if the market moved while closed on IG, any orders (including stop losses and target prices) won't trigger until the market reopens on IG, and then will trigger (or not) based on the price at market open. It's actually quite a big risk IMO, since the Bitcoin market is 24/7 and does move at weekends.

 

I'd recommend reading the Naked Trader's books, they are an excellent introduction and go right through the basics. Start with

The Naked Trader: How Anyone Can Make Money Trading Shares

Then his book about spread betting if you want more detail on that specifically.

[Guest DANNYM]

Always read the information about the type of contract you buy. The Bitcoin contract (of IG) is a position in 100 bitcoins. You should look at trading the mini-bitcoin contract (which is a position of 10 bitcoins). Therefore, if you want to trade 1 bitcoin on margin, you need to choose the mini-bitcoin contract, and take a position of 0.1

[JamesIG]

Just for clarity, and to follow on from  's post, you can find the contract size for all instruments here >

 

[Guest Emil]

Thanks a lot for your help