Shares spread bet details

Transcription

1 We are pleased to offer thousands of different world shares, including around 1500 individual UK shares. Over 7000 shares, across the world s major indices, are available at margin rates starting from just 5%. See our full tiered margin list for spread bets (PDF, 324KB). Please note, preferential rates may be available for tiers three and four. See our shares lists for full details of all the shares offered by us: Shares list (XLS, 2MB) Shares list (PDF, 500KB) Dealing spreads We offer permanently low spreads across all shares markets. 'Major' shares are the constituents of the headline indices of a range of major markets, including the UK, US, France, Germany, Spain, Australia, Canada and Japan. Share category Quarterly Bets DFBs Near Far Very far Australia (major) 0.10% 0.60% 0.70% 0.85% Australia (other) 0.25% 0.60% 0.70% 0.85% Canada (major) 0.10% 0.35% 0.45% 0.60% Canada (other) 0.15% 0.35% 0.45% 0.60% Europe (major) 0.10% 0.35% 0.45% 0.60% Europe (other) 0.25% 0.35% 0.45% 0.60% Hong Kong/Singapore 0.40% 0.60% 0.70% 0.85% International Order Book 0.15% 0.40% 0.50% 0.60% Japan (major) 0.10% 0.35% 0.45% 0.60% Japan (other) 0.25% 0.35% 0.45% 0.60% South Africa 0.50% 0.75% 0.85% 1.0% UK shares (FTSE 100) 0.10% 0.20% 0.40% 0.60% UK shares (other) 0.25% 0.40% 0.45% 0.60% UK shares (market maker) 0.25% 0.60% 0.70% 0.85% US (major) 0.10% 0.35% 0.45% 0.60% US (other) 0.15% 0.35% 0.45% 0.60% Page 1 of 6

2 Limited risk bets We have classified our UK stocks into three categories, depending on our assessment of the volatility of the stock concerned. The volatility of the share price affects two significant factors, the limited risk premium and the minimum stop distance. Low volatility - 0.3% premium Contains FTSE 100 shares, as well as many SETS shares. Minimum stop distance: 5%* Medium volatility - 0.7% premium Contains other SETS/SETSmm shares. Minimum stop distance: 7.5%* High volatility - 1.0% premium Contains small-cap stocks. Minimum stop distance: 12.5%* International shares are divided into the same three categories. US stocks are all classified as low volatility (0.3%) and have a minimum stop distance of 10%.* These categories will only affect spread sizes for limited risk bets; spread sizes for non-limited risk bets are not affected. For a full explanation of how we determine our dealing spreads for bets on individual shares, please see our shares list. *Minimum stop distances The more volatile a share, the greater the minimum stop distance we will insist upon for limited risk bets. The minimum stop distances for each category are listed above, expressed as a percentage of the current share price. Notes The following notes apply to all individual shares bets we offer. 1. Dealing spreads on shares are subject to variation, especially in volatile market conditions or in other unusual circumstances. Bets are opened and closed at the market bid/offer, adjusted for the contract month in the case of quarterly bets, minus/plus half our spread. Market spreads can widen significantly, particularly at the beginning and end of the trading day, and minimum spreads may exist. Our spread for a particular share is calculated as a percentage of the current price. 2. For limited risk bets a limited risk premium is charged on the opening. Bets are opened at our bid/offer price, minus/plus the limited risk premium. Bets are closed at our bid/offer. Limited risk bets may not be available on certain stocks; please ask our dealers for current information. The limited risk premium is calculated as a percentage of the current share price. The limited risk premium for bets on UK shares depends on the volatility of the share concerned. We will classify a UK share as having a low, medium or high volatility and the premium will vary accordingly. We will maintain up-to-date lists of limited risk premiums for individual shares. 3. Our 'all-in' spread on all individual share options will include both our spread and market spread. This applies to both opening and closing transactions. No spread is charged on option bets which are left to expire. Page 2 of 6

3 The size of the spread varies, depending on the option premium, the time to expiry and the volatility and liquidity of the underlying stock. 4. The margin requirement for any particular share is a percentage of the share price. The percentage will vary depending on various factors, including liquidity, volumes, market capitalisation and sectors, as well as volatility and exchange listing. The margin requirement for SETS or order-driven shares starts at 5% on the plus account while AIM-listed or quote-driven shares have a minimum 25% margin requirement. Some US shares listed in the Dow Jones, S&P 500 or NASDAQ 100 require a margin of 5% on a plus account, other shares on the same exchanges start at 10%. Margin requirements for European shares start at 5% for clients using a plus account. South African and Hong Kong shares have margin requirements starting at 10%. Please note that tiered margins apply; this means that more margin may be required for large positions. Please see our margins page for more details. The margin required for 'buying' a share option is the opening level times the size of the bet. For 'selling' a share option, the margin is required to trade the equivalent size equity position in the underlying security. 5. Bets on UK shares are usually denominated in pounds per point. For each share, one point means one penny. A 10/point bet is the equivalent to a position in 1000 shares. Bets on US shares are denominated in dollars or pounds per point, at your choice. For each share, one point means one cent. A $10/point bet is the equivalent to a position in 1000 shares. A 10/point bet is the equivalent of a position in the number of shares equal to 1000 multiplied by the /$ exchange rate. Bets on European shares are denominated in pounds per point or in the local currency (normally euros), at your choice. For each share, one point means one cent. A 10/point bet is the equivalent to a position in 1000 shares. A 10/point bet is the equivalent of a position in the number of shares equal to 1000 divided by the / exchange rate. Bets on shares in other markets are denominated in pounds per point or in the local currency at your choice. The bet size equivalent to a position in a particular number of shares is calculated in the same way as detailed above. Bets on UK share options are always denominated in pounds per point. Bets on US share options are always denominated in dollars per point. 6. Minimum bet sizes in pounds, dollars and euros apply, for both quarterly and daily funded bets (DFBs). Please see the individual stock contract details for more information. For bets on share options, the minimum bet size is 10/point for UK share options, and $5/point for US share options. 7. Dealing hours are consistent with the underlying exchanges. Please feel free to contact our dealing desk for more detailed information. 8. The contract months for quarterly bets rotate on a March, June, September, December cycle. The contract months for a UK share option will normally be the same as the contract months for the equivalent option quoted on LIFFE. 9. The last dealing day for quarterly bets is the Tuesday before the third Wednesday of the contract month. The last dealing day for UK share options is the third Friday of the contract month. Page 3 of 6

4 The last dealing day for US share options is the third Friday of the expiry month or the previous business day if this is a market holiday. 10. Quarterly and DFB share bets not already closed by the client are closed on or after the last dealing day at the closing bid price (in the case of long positions) or closing offer price (in the case of short positions) of the relevant exchange on the last dealing day, plus or minus half our spread. In the event that the relevant exchange does not publish a closing bid and offer price, bets will be closed at the last traded price at or prior to the close of the Exchange on the last dealing day, plus or minus half our spread. When a bet is of sufficient size that an equivalent transaction on the exchange would be in excess of four times normal market size (or where any number of bets are together in excess of four times normal market size) then bets not already closed by the client by the last time for dealing will be automatically rolled over, unless we exercise our reasonable discretion to close the bet. 11. Bets on share options not already closed by the client are closed on or after the last dealing day for those share options, on the following basis: Bets on call options at the closing price of the underlying share as quoted on the primary exchange on the last trading day, less the strike price, or at 0, whichever is greater. The price used will be the closing price as quoted on the primary exchange. Bets on put options at the strike price, less the closing price of the underlying share as quoted on the primary exchange on the last trading day, or at 0, whichever is greater. The price used will be the closing price as quoted on the primary exchange. 12. Quarterly bets can be rolled over on expiry provided a rollover instruction is received from the client at least 15 minutes before the close of the relevant exchange on the last dealing day. Bets on share options cannot be rolled over. DFBs, which do not have a daily rollover, have an interest adjustment applied daily to their account. Interest adjustments in respect of long positions is debited from a client's account and interest in respect of short positions is either credited or debited from a client's account. The interest adjustment on a DFB is derived from the current one-month interbank offered rate of the currency of the share in which you are dealing, adjusted for our funding. For example, if you are taking a long DFB position on a UK-listed share priced in sterling, the interest adjustment is calculated by adding the latest one month London Interbank Offered Rate (LIBOR) to our small funding adjustment, usually 2.5% per annum. So, if LIBOR is 1.5%, the total daily interest adjustment to a long position would be 0.011% (1.5% + 2.5% 365). Conversely, if you are taking a short DFB position on a UK-listed share priced in sterling, the total interest adjustment is calculated by subtracting our funding adjustment, usually 2.5% per annum, from LIBOR. Unlike long positions, the total interest adjustment on short positions can result in either a higher or lower opening level. If LIBOR is greater than our funding adjustment, the opening level will be higher than the closing level. If LIBOR is less than our funding adjustment, the opening level will be lower than the closing level. Page 4 of 6

5 For example, if LIBOR is 4% (greater than our funding adjustment), the interest adjustment to a rolled DFB short position would be 0.004% (4% - 2.5% 365). If LIBOR is 1.5% (less than our funding adjustment fee), the daily interest adjustment to a rolled DFB short position would be % (1.5% - 2.5% 365). 13. Note that when shorting a stock via a DFB spread bet, you may incur a 'borrowing charge'. You will only incur a borrowing charge if we too incur such a charge when we open a hedging trade in respect of the same share in the underlying market, and we will pass the charge on to you (with a 0.5% admin fee). To determine whether a borrowing charge applies, call our dealers in advance of betting. The borrowing charge (if applicable) will be accounted for in a daily cash adjustment applied to the account. The borrowing charge, and the ability to go short, can be changed at short notice. A dividend adjustment is applied when a share passes its ex-dividend date (including the ex-date of any special dividend) in the underlying stock market. In the case of long positions, the dividend adjustment is credited to the client's account. In the case of short positions, the dividend adjustment is debited from the client's account. In the case of UK shares, the dividend adjustment is equal to the amount of the net dividend. The dividend adjustment for shares in other markets varies depending on local tax arrangements; please ask our dealers for current details. When a quarterly shares bet is rolled over to the next quarter, the expiring bet is closed at the middle of the market price after the close of the relevant exchange, plus or minus half our normal spread as shown in note 1). No IG or market spread is charged on the opening of the new bet. If you have a stop or a limit order on a daily position when it is rolled over, we will, unless instructed otherwise, place the stop on the new bet at the same level as the stop on the expiring bet. If you have stops or limits on a quarterly bet when it is rolled over, we will, unless otherwise instructed, place the stop or limit on the new bet at the same level, but adjusted for fair value. For example, if the price of the new contract is 20 points higher than the expiring contract, your stop or limit would be rolled forward at your existing level plus 20 points. This applies to both guaranteed and non-guaranteed stops and limits. 14. If there is a bonus share issue, special dividend, rights issue, or any other event making it appropriate by normally accepted standards to adjust the opening level or size of a bet, we will make whatever adjustment it believes to be fair and reasonable. We will always attempt to replicate the rights and adjustments afforded to shareholders or the underlying stock when adjusting a spread bet. Please be aware that, with certain corporate actions such as entitlements or rights issues, those clients who have shorted a stock (made a down bet) will not have the option to take up the rights or entitled shares and may be assigned a larger position in terms of pounds, or any other currency, per point. If you have an open limited risk share spread bet where the underlying share is subject to a rights issue or open offer and the subscription price is (a) in or at the money at the closing price of the underlying share on the last trading day for that share immediately before the ex-date, we will treat the rights issue or open offer as being successful and accordingly increase the size of your bet to reflect the effect of the rights issue or open offer or (b) out of the money at the closing price of the underlying share on the last trading day for that share immediately before the ex-date, we will treat the rights issue or open offer as not being successful and accordingly leave the size of your bet unchanged. Page 5 of 6

6 This treatment will apply regardless of whether a rights issue or open offer becomes successful after being out of the money at the closing price of the underlying share on the last trading day for that share immediately before the ex-date or is not successful after being in or at the money at the closing price of the underlying share on the last trading day for that share immediately before the ex-date. Importantly, in both situations, we will alter the level of your stop such that the maximum amount you are risking under this open share spread bet remains the same before and after any adjustment is made for the rights issue or open offer. Typically when there is an element of choice in a corporate action, the choice is usually only extended to those who have invested in (bought) the stock. For share spread bets in a company which is under offer in a takeover situation, once the offer goes wholly unconditional, we will treat the share spread bets as if they have been assented unless otherwise instructed. If you go short of a stock, any rights or other entitlement may be exercised against you. With regard to equity options, we will take note of any adjustment made by the relevant options exchange in respect of options on the affected share. In the unlikely event of a dispute, a client may ask our regulator the Financial Conduct Authority (FCA), or any successor, to arbitrate. We will take whatever action it considers fair and reasonable if a share is suspended, but a client may ask the FSA to arbitrate in the event of a disagreement. 15. Specials: Poundland IPO ( m) The market settles basis the market capitalisation at the end of the first day of trading and will be rounded to the nearest million. One contract = 1 (per million). The market is dealable from to (London time). If the IPO has not taken place by 31 December 2014 we will void all open positions. The price quoted is based upon the market capitalisation rather than the actual share price. Tradzster / Capital Intervest - Published privately All rights reserved. The information in this document reflects the product offering of our partner broker IG and is subject to changes in the IG product offering through Tradzster. No part of this issue may be multiplied, stored in an automated data file and/or published in whatever form or manner, either electronically, as photocopies, as a recording or in any other form without the previous written permission from the publisher. Disclaimer Any mentioned amounts, rates, commissions, spreads and other arithmetic information are indicative, are subject to change and thus reservation. Page 6 of 6