IG rollover policy - huge spread today?

[candeloro]

Hi could somebody please explain the rollover policy of IG index.

My DOW daily short position (guaranteed stop) was rolled over with a spread of 8.7 points instead of the normal 2 points.

Yesterday closed 10582 reopened 10580

Today closed 10565 reopened 10556.3

This is a spread of 4 times yesterdays. Could somebody help me to figure that out please.
Thanks

 

[montmorencyt2w]

Sorry to state the obvious, but (if you have not done so already), just email them and ask them to please clarify.

 

[candeloro]

I did last week when a spread in a amout that is close to todays occured and that was the answer I got:

"Thank you for your email. There was a 2.2 point dividend passed on the Dow on Christmas Eve. Dividends come out of the cash price when a component share passes a dividend, this accounts for the extra 2.2pips over the roll. Please keep in mind that this would not have cost you anything, as we stripped 2.2 points from the value of our cash price at the same time that your position was rolled over."

After thinking about it, I just cannot figure that out.
Why is there a dividend on the daily DOW?
How is it I am told not to lose money if they ropen the position the same point they closed it.
Yesterday my statement said I paid 2 point cost today I pay 8,3 points.

I thought that as some people here will have the DOW Daily rolled over on a short position and they should have the same costs could explain that to me.

But I will send an email to IG as well.

TIA

 

[tar]

http://www.igindex.co.uk/content/files/dealing_handbook.pdf

Usually it is 1 point for normal bets and 2 points for C risk ....

 

[candeloro]

Ok, digging through the handbook, it seems that this is the dividend adjustment taken from Bloomberg.
Do not know why they state it would not cost me.

If they adjust the DOW Daily after deducting the points or if they leave the spread at 2 and adjust the DOW Daily, it costs me the points anyway.

Will wait for their answer....

This almost happens weekly...hmmm costs a lot of money....


Hope that somebody turns up to give advise.
I wonder why I would do better closing the position and reopen it by myself.
That would have saved me money but this cannot be the point of an automatic rollover.

 

[tar]

When there is dividend the dow will go down few points to factor the div , so if u r long IG will pay u and if u r short they will charge u , so in theory it will not cost u , dont forget u took C risk bet wich maybe charges u more in this case , anyway if u want to close then reopen your C risk short after market close u will pay 6 points new spread plus 3 for the G stop , and if u did it b4 the cash close it will cost u 4 points spread plus 3 for the G stop ...

 

[candeloro]

@ tar
thanks for helping

I wait for the answer from IG to be sure.
Maybe it is me but I plain do not understand how in theory it would not cost me.
Let´s take yesterday as the example:
I have a c risk bet.
Short position on the DOW daily.
It was closed @10565 and reopened @10556,3
If I look at the DOW Daily now now it says:
Buy @10551 a change of -17 points for the day of 6 January (which is the reopened position day)
So the startprice of the DOW Daily for today (afterhours with 6 point spread) was:
Sell @10562 / buy @10568

So I understand that by the rules (generall and stated in the spreadbetting handbook) there can be a adjustment due to dividends.
And the additonal 6.7 points may me caused by that.

But if I had closed my position by hand at the close.
I would have bought the position at the same closing point which is 10565.
After IG Index opened the position at a sell of 10562 I would have payed an aditional 3 points for the controlled risk.
Which would get me an price of 10559 for reopening.
This is 2.7 points better than the automatic roll over and the roll over is normaly saving compared to open manually.
a)There was no adjustment
b)There is something I do not understand

 

[tar]

@ tar
thanks for helping

I wait for the answer from IG to be sure.
Maybe it is me but I plain do not understand how in theory it would not cost me.
Let´s take yesterday as the example:
I have a c risk bet.
Short position on the DOW daily.
It was closed @10565 and reopened @10556,3
If I look at the DOW Daily now now it says:
Buy @10551 a change of -17 points for the day of 6 January (which is the reopened position day)
So the startprice of the DOW Daily for today (afterhours with 6 point spread) was:
Sell @10562 / buy @10568

So I understand that by the rules (generall and stated in the spreadbetting handbook) there can be a adjustment due to dividends.
And the additonal 6.7 points may me caused by that.

But if I had closed my position by hand at the close.
I would have bought the position at the same closing point which is 10565.
After IG Index opened the position at a sell of 10562 I would have payed an aditional 3 points for the controlled risk.
Which would get me an price of 10559 for reopening.
This is 2.7 points better than the automatic roll over and the roll over is normaly saving compared to open manually.
a)There was no adjustment
b)There is something I do not understand

some of the 17 points drop is caused by the div factor , because of this if u was long they will pay u , and if u r short they will charge u but the dow is already down so it should be ok for u if there is no div the dow will not be down that much ( in theory ) ... now when u close manually u dont guarantee to reopen at the same price maybe u lose few points in seconds , even if u reopen at the same price u will lose the new spread for example : dow 10000-10006 after the close u will close your short at 10006 then u will reopen at 10000 , so this is 6 points lost for the new spread plus 3 ofcourse for your G stop ....