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Ludwik Chodzko-Zajko IG

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Everything posted by Ludwik Chodzko-Zajko IG

  1. @247trader you're right, very tough time. TRY could have a lot further to go over the next few weeks if Erdogan starts putting pressure on the central bank or, worse, curtails it's independence. He's still fixed on lowering Turkish CB rates, and has appointed his son-in-law as finance minster (make of that what you will). Has called interest rates "the mother and father of all evil" & believes (unconventionally) that higher rates lead to higher inflation. https://www.reuters.com/article/us-turkey-currency/turkish-lira-hits-record-low-after-erdogan-interest-rate-comments-idUSKBN1K20UQ From a trading POV, TRY is very popular with both retail and institutional clients as a carry trade, in which you hold a long TRY position overnight to benefit from the positive swap rate. A falling TRY combined with Ergodan's (apparent) desire to cut CB rates might mean the end of a viable carry trade, and cause further downwards pressure should traders decide to liquidate/ switch to another high interest currency. It's difficult to gauge the impact of this as the vast majority of FX is OTC, but certainly a major factor. https://www.bloomberg.com/news/articles/2018-07-09/emerging-market-carry-trade-makes-comeback-as-dollar-rally-fades Either way likely to be extremely volatile for a good few months, one to watch.
  2. 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
  3. My pleasure! Glad I could be of help, and apologies for the lack of clarity given in previous responses. Posting this on the help and support portal is a very good suggestion, IT are currently in the process of creating a newer page which feeds through to here, but I'll certainly feed this back. Please do feel free to continue using the community for any general queries, we appreciate it! Ludwik
  4. Good morning! US withholding tax would apply to dividends received on all US shares, including positions on a spread betting account. If for example, you held a position which was entitled to a gross (before tax) dividend of $10, you'd receive either $7 or $8.5 (paying 30/15% tax at source) depending on whether you've completed a W8 form and are resident in a treaty country. In p&l terms this could mean that you're slightly offside when long, as the share price does tend to fall by the gross amount of the dividend, although many factors are obviously at play (e.g buyers pushing up the share price pre- divi). When short you'd pay the gross amount (100%). Note that this applies to equities only. When long a stock index you would not incur any withholding. and therefore receive / pay the gross amount each time. As an FYI the only stock index where you'd pay withholding tax is the Swiss blue chip. In terms of personal tax liability, dividends received on a spread betting account would not ordinarily create a UK tax liability, as they're received through a spread betting account in which you hold a derivative, not the underlying stock. I would add a caveat that we're not able to give specific tax advice, but under usual circumstances this would be the case. I hope this all makes sense. Feel free to let me know if you need any more info/ clarification. Thanks! Ludwik