Dear community members,
I thought it only prudent to make other members aware of a few rather questionable & significant price drops that occurred on IG’s Tesla stock back on 17 & 19 August (pre-split).
There may have been other examples of this occurrence on Tesla, or indeed other surging technology stocks, although the below examples are the ones I noticed & reported to IG.
The screen grab examples mentioned below are attached fyi.
1. Monday 17/08- 9AM open. Price range showing a 17,649.50 point (11.80%) drop in price, which clearly didn't happen in the market. This price drop is also omitted from later versions of IG's Tesla screen, as can be seen on the previously mentioned 19 August screengrab, when looking at the 4 hour time frame window, there's no price drop to 14,8970?
2. Wednesday 19/08- As per the above example, another sharp and large movement down in price, again at the 9am open, see blue arrow. I unfortunately didn't highlight the candle to get the specifics, but looks in the region of ~5k points between highest/lowest.
Both these price drops weren’t evident on my TradingView screen where I get a direct pre-market price feed from NASDAQ. Furthermore, both price drops were then omitted from IG’s screens soon after they occurred. Rather mysterious.
I wrote to IG asking for an explanation on these price drops, and the omission, where staff from Trading Services told me they were due to a “display error”, and that “The developers are currently working on the project however we don't have a date yet of when a fix will be available. We will inform you once the developers have discovered a solution.”
To be frank, I found these answers given by IG to be both inadequate & unacceptable. This is especially so given the fact these massive price drops didn’t actually happen in the market (NASDAQ), and were omitted by IG soon after they took place.
As I stated in the below mail trail with IG, clearly if you were long Tesla you would have been stopped out unfairly, even with a very flexible stop order, potentially causing considerable financial loss.
Given the potential severity of the issue at hand, I would have thought this would be dealt with professionally & expeditiously by IG, which it hasn’t. Clearly this very skewed pricing wouldn’t fill IG customers with confidence going forward.
I still haven’t been given an update on the developer fix for these “display errors”….
Thoughts welcome, mail trail below with attachments.
** Urgent: Tesla pricing **
Wed, 19 Aug, 15:30
For the past few days, namely on 17 August & today 19 August, there have been two very large downward price movements in Tesla's stock price at the 9am UK pre-market open. Said price movements then disappear when refreshing the IG screen a few minutes later.
I captured both via screen grab, with today's also including the above omission example when refreshing the screen.
Please find attached 3 .JPG files:
1. "IG Tesla Pricing- 19 August (spike down)"- as the file name suggests, the sharp and large movement down in price this morning at the 9am open, see blue arrow. I unfortunately didn't highlight the candle to get the specifics, but looks in the region of ~5k points between highest/lowest.
2. "IG Tesla Pricing- 19 August (no spike down)"- the above large downward price movement has clearly disappeared from the screen, no trace of a candle wick at all?
3. "IG Tesla Pricing- 17 August (spike down)"- similar example here on Monday 17/08- price range showing a 17,649.50 (11.80%) drop in price, which clearly didn't happen. This price drop is also omitted from later versions of IG's Tesla screen, as can be seen on the previously mentioned 19 August screengrab, when looking at the 4 hour time frame window, there's no price drop to 14,8970?
These questionable price drops look like a possible flash crash of sorts, although I get a direct feed from NASDAQ into my trading screen on TradingView where I manage my risk, and none of the aforementioned price drops are evident.
Perhaps I have missed something here, but please provide an explanation as to how these prices were generated, and why they were later omitted. Clearly if you were long Tesla you would have been stopped out unfairly, even with a very flexible stop order. I'm wanting to trade Tesla going forward but this is not filling me with confidence.
In case you need it, my account ID *****
I look forward to your reply.
The following day, I then received the below reply from Michael Ye in Trading Services...
Re:** Urgent: Tesla pricing ** - INC0465098
20 Aug 2020, 04:30 (13 days ago)
Thanks for your detailed email.
Sorry to hear about your issues with our charts. This is a known issue and our developers are currently looking into this at high priority.
Trades are executed based on the market price, chart is indicative only and in this case a display error.
Case reference: INC0465098
If you have any further queries, please do not hesitate to contact us. Alternatively, we've recently launched our new Help & Support site which gives you answers from our huge knowledge-base, online community, and education hub.
Trading Services IG
To which I replied the following....
20 Aug 2020, 11:33 (13 days ago)
Thanks for your response.
Trades may be executed based on the market price, but as you well know, risk is modelled, including stop losses, based on volatility/price action of the underlying asset. IG prices shown on the chart therefore directly impact this risk modelling, even if they are indicative.
It could therefore be viewed as unacceptable market practice, for an FCA registered company, on more than one occasion, to have such a massive spread/gap between the prevailing market price & what IG screens are showing. It's highly probable that these "display errors" would directly and negatively impact any customers financially who are long a stock, in this case Tesla.
Please provide an ETA for when your developers will have fixed said "display errors", and what controls are being put in place at IG to ensure this doesn't happen again.
I then received the below reply from Anton Liebenberg in trading services....
Re: ** Urgent: Tesla pricing ** - INC0465098 / OTCPT-5728
Thu, 20 Aug, 16:20 (13 days ago)
Thanks for your email. The developers are currently working on the project however we don't have a date yet of when a fix will be available. We will inform you once the developers have discovered a solution.
If you have any further queries, please do not hesitate to contact us."
Trading Services IG