Jump to content
  • 0

Spread bets on Wall St.


Tubbjess

Question

I’m fairly new to spread betting but I’ve made some bets on the Dow (Wall St on IG) and I have found that the current price on an open position is always about 60 points lower than the current price (sell/offer) quoted. I guess this is something to do with IG’s charges but can someone explain if it is and how it’s calculated?

Link to comment

5 answers to this question

Recommended Posts

  • 0
9 hours ago, Tubbjess said:

I’m fairly new to spread betting but I’ve made some bets on the Dow (Wall St on IG) and I have found that the current price on an open position is always about 60 points lower than the current price (sell/offer) quoted. I guess this is something to do with IG’s charges but can someone explain if it is and how it’s calculated?

hi, not sure what you are referring to, the charge is the spread which on Dow is typically 1.6 points though may widen temporarily for short periods on high volatility, can you screenshot the chart to highlight your point.

Link to comment
  • 0
10 hours ago, Tubbjess said:

I’m fairly new to spread betting but I’ve made some bets on the Dow (Wall St on IG) and I have found that the current price on an open position is always about 60 points lower than the current price (sell/offer) quoted. I guess this is something to do with IG’s charges but can someone explain if it is and how it’s calculated?

As @Caseynotes mentioned, our charge is incorporated in the spread. 

The futures contracts we offer are the underlying market price with our spread wrapped around it.

The cash/dfb price you see is the futures contract adjusted for fair value.

The reason people may choose to have the cash/ dfb contract rather than the future is if they're not looking to hold the position for very long. It has a much smaller spread than the future contract. 

Further to this, it may depend on the source you're getting the pricing from. They may be using a different method to price their cash/ dfb price.

I hope this helps :) 

Link to comment
  • 0
5 hours ago, CharlotteIG said:

As @Caseynotes mentioned, our charge is incorporated in the spread. 

The futures contracts we offer are the underlying market price with our spread wrapped around it.

The cash/dfb price you see is the futures contract adjusted for fair value.

The reason people may choose to have the cash/ dfb contract rather than the future is if they're not looking to hold the position for very long. It has a much smaller spread than the future contract. 

Further to this, it may depend on the source you're getting the pricing from. They may be using a different method to price their cash/ dfb price.

I hope this helps :) 

Thanks CharlotteIG, just a couple of queries. I’m not up to speed with your jargon so can you explain your first sentence via an example? Also what are dfb and fair value?

thanks

Link to comment
  • 0
Just now, Tubbjess said:

Thanks CharlotteIG, just a couple of queries. I’m not up to speed with your jargon so can you explain your first sentence via an example? Also what are dfb and fair value?

thanks

@Tubbjess- yes of course, sorry about that. 

The futures prices have dividends and interest incorporated in them. So we add interest back into the price and adjust every night with overnight funding (overnight fee with also includes 2.5% admin fee). You can find more information on this by following the link here.

 

As well as this we have to incorporate dividend back on to the price. This is then taken as a dividend adjustment (which we post in the community) but it's simply an adjustment. So if you were long you would see the price spike down but the amount you lose from the movement we will credit to your account. If you were short you would gain from the movement but we would debit your account the same amount.  You can see more about how these work by following the link here.  The video is useful. 

Hope this helps :)

Link to comment
  • 0
11 minutes ago, CharlotteIG said:

@Tubbjess- yes of course, sorry about that. 

The futures prices have dividends and interest incorporated in them. So we add interest back into the price and adjust every night with overnight funding (overnight fee with also includes 2.5% admin fee). You can find more information on this by following the link here.

 

As well as this we have to incorporate dividend back on to the price. This is then taken as a dividend adjustment (which we post in the community) but it's simply an adjustment. So if you were long you would see the price spike down but the amount you lose from the movement we will credit to your account. If you were short you would gain from the movement but we would debit your account the same amount.  You can see more about how these work by following the link here.  The video is useful. 

Hope this helps :)

 

12 minutes ago, CharlotteIG said:

@Tubbjess- yes of course, sorry about that. 

The futures prices have dividends and interest incorporated in them. So we add interest back into the price and adjust every night with overnight funding (overnight fee with also includes 2.5% admin fee). You can find more information on this by following the link here.

 

As well as this we have to incorporate dividend back on to the price. This is then taken as a dividend adjustment (which we post in the community) but it's simply an adjustment. So if you were long you would see the price spike down but the amount you lose from the movement we will credit to your account. If you were short you would gain from the movement but we would debit your account the same amount.  You can see more about how these work by following the link here.  The video is useful. 

Hope this helps :)

The links were very helpful I can (almost) see clearly now 😊

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      22,155
    • Total Posts
      93,063
    • Total Members
      42,554
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    grantchingyu
    Joined 09/06/23 03:06
  • Posts

    • Elliott Wave Analysis TradingLounge Daily Chart, 9 June 23,   Ripple/U.S.dollar(XRPUSD) XRPUSD Elliott Wave Technical Analysis  Function: Follow Trend Mode: Motive Structure: Impulse Position: Wave 5 Direction Next higher Degrees: wave (1) of Motive Details: Wave 5 is usually equal to .618 multiplied Length of wave 1 through wave 3 Wave Cancel invalid level: 0.41001 Ripple/U.S.dollar(XRPUSD)Trading Strategy: Ripple is still in an uptrend. But it was in a phase of correction in wave 4 before rising again in wave 5, in line with price being above the MA200 line, showing a strong uptrend. But even so, we need more information to identify wave 4 patterns to determine readiness for rising wave 5, wait for wave 4 to finish. Ripple/U.S.dollar(XRPUSD)Technical Indicators: The price is above the MA200 indicating an Uptrend, Wave Oscillator has a Bullish momentum. TradingLounge Analyst: Kittiampon Somboonsod, CEWA Source : Tradinglounge.com get trial here!   Elliott Wave Analysis TradingLounge 4H Chart, 9 June 23,   Ripple/U.S.dollar(XRPUSD) XRPUSD Elliott Wave Technical Analysis  Function: Follow Trend Mode: Motive Structure: Impulse Position: Wave 5 Direction Next higher Degrees: wave (1) of Motive Details: Wave 5 is usually equal to .618 multiplied Length of wave 1 through wave 3 Wave Cancel invalid level: 0.41001 Ripple/U.S.dollar(XRPUSD)Trading Strategy: Ripple is still in an uptrend. But it was in a phase of correction in wave 4 before rising again in wave 5, in line with price being above the MA200 line, showing a strong uptrend. But even so, we need more information to identify wave 4 patterns to determine readiness for rising wave 5, wait for wave 4 to finish. Ripple/U.S.dollar(XRPUSD)Technical Indicators: The price is above the MA200 indicating an Uptrend, Wave Oscillator has a Bullish momentum.
    • This is a great answer... Oddly, this is the process i went through and "Trailing" wasn't an option. After looking again, it is now there and working. Thank you.
    • Charting the Markets: 08 June Brent crude oil, silver and copper capped by resistance in low volatile trading. EUR/USD range bound while USD/CAD and AUD/CAD remain bearish post BoC rate hike. And levels to watch. Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 08 June 2023             This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.  
×
×
  • Create New...