250k cap on crypto accounts

[ROUGEONE]

Dear IG,

I find it quite disappointing that any trader who trades in cryptocurrenices has a notional limit of 250k on the account if the value of the account crypto surpassed that figure. If we end up with a potential bull market in crypto this could be easily surpassed. Does that mean to will credit anything over that value back into the clients account to keep it under 250k ?.

If so, it’s disappointing as an established spread betting company your penalising traders who end up with profitable bets that exceed 250k. 

Do you have any plans to take off the cap ?

Kind regards 

 

[JamesIG]

hey @ROUGEONE - the crypto space is changing very rapidly, and new institutional grade storage, execution venues, and security / insurance options are being developed. As a company as well we would have had a longer time in the space, and therefore be able to review these notional limits. Currently these levels are being imposed, but if we see another bull rally then as with all things, we will be able to periodically review the offering. I appreciate this is a bit wishy-washy and speculative, however I hope it gives insight into the reasons behind the level.

[JamesIG]

My reply has an 'upward trending bias' because that was the most appropriate way to answer the question - a question which specifically referenced a bullish move in the crypto space. Also, if the OP had maxed out their 250k limit and then the markets moved down, the notional value would obviously decrease and there wouldn't be anything to worry about and no answer necessary...

In regards to the level let me try and be clearer: over the latest bull run we had thousands and thousands of clients trading on a very new asset type which didn't have an appropriate amount of liquidity, infrastructure, institutional level execution, security, insurance, or storage capabilities in the underlying market. We're not talking about a couple of bitcoin here, we're talking about significant size, holding 20% of the global OI in the futures market, and getting exceptional deal execution sorted for our 195,000 client base (who dealt crypto).

There are still such barriers to institutional entry, friction with the movement of assets on/off exchange, and thin liquidity, however these things are getting better. We periodically review and monitor everything (from margin requirements, to stop levels, and one off specifics such as crypto max size) so if we see this area improve and decrease the risks for dealing in such significant size for our client base, we may be able to review the max each client can hold.