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IG increasing the margin on open SAVE positions to 100% from next week, suggesting to close if can't be covered. Obv not an option. It affects me and possibly a few others on here. Irritates the hell out of me when they do this as could have just stuffed it in my ISA.
What happens to those that can’t cover and obviously the share is not trading again ? Are there forced out of their positions?
The timing is quite something wonder whether it suggest that notice for re-admission has gone out to brokers already with a re-admission date planned and fixed this month ? Just intriguing timing plus it wouldn’t make sense for them to raise to 100% margin prior to allowing punters to cover but those that can’t cover would they be liquidated at the suspension share price, interesting to know just for knowledge ? If anyone would care to shed some light
I have a spread bet position with IG along with shares in my dealing account. They contacted me to give advance warning. I do not think it is anything sinister about SAVE per se. I believe after a set period of a company being suspended, they automatically increase the margin required to 100%. I suspect that most companies whose shares are suspended for this length of time usually don't come back. I can't imagine that they would sell SAVE shares in the event that you cannot cover the margin as there is not a recognised price. More likely they would ask you to find additional cash or close out other spread bet positions so the margin allocated to these could be used to cover your increased margin position in SAVE
Nevermind - Only works if you have other positions to close out though..........................................
Never mind - I was under the impression that they would closeout at the last suspended price in this instance but i could be wrong to be honest
Nothing will happen with ig until the share starts trading again then it will be 100% for a very short while when normal service will be resumed. if you do have other positions i suggest you sell them and pull the cash out pre tuesday.
TL
I didn't ask IG that question so I don't know. But IG should hedge their position with the spread bet by buying SAVE shares in the market. As they can't sell SAVE shares they can't unwind their hedge so what benefit or risk reduction would they get?
I don't know. More likely I think they would suspend any further dealing in Spread bets with that client until he made good the margin amount and maybe charge them a punitive interest rate charge on the margin owed. Just my speculation though.
Nevermined / longshorttrade - Thanks for clarifying I am sure some on here would benefit that clarification. for the record i don't have any on margin, but suspect a few may have some in margin the very least. I was more intrigued for knowledge to be honest as i do trade other shares on margin and wondered how that would work in theory if i was unable to cover by selling or toping up and the share was suspended so i couldn't unwind my position. But sounds like what you are guys are saying the position will only be liquidated once trading commences as the price cannot be determined and they simply cant take the suspended price as the closing price.
TL. I have been trying to get some info from IG as I have a fairly hefty SB and not really any other IG positions to close. The person I spoke to was fairly clueless and 5 or 6 times had to defer to someone else - who seemed equally clueless. An attempt to clarify by email yielded the following "we can inform you that in general terms, if you have a long position you can provide us with written confirmation to close the position at 0". - My interpretation of this is that you close it at nil pence - which is exactly the same as covering the 100% margin so no idea why you would do this - even if you didn't have the funds to cover. I'm assuming as you say it's some automated process for shares suspended for a certain period, and not something that has taken any forethought, and only likely to p**s customers off. I am still waiting for clarification, and if get any sense will feed back.
Moho, they can not close out suspended shares however you margin come tuesday will be affected, when we start trading that is when it will be affected, read my earlier post. i hold stock and spread bet. ig are covering bases on several suspended stocks. if you have other stock positions open in profit close them and take the money out lesson your exposure, i assume you are not a professional trader ? Gla thanks Zen, TL and RR
Going by the timing of the notice as I mentioned brokers are generally given 10 business days notice and IG raised to 100-% on Thursday so 10 business days timing does fit up till 28th July if that’s the date we are re-admitted. Of course the brokers could have received the notices earlier and ig simply only sent the email on Thursday. But
Going by the timing of the notice as I mentioned brokers are generally given 10 business days notice and IG raised to 100-% on Thursday so 10 business days timing does fit up till 28th July if that’s the date we are re-admitted. Of course the brokers could have received the notices earlier and ig simply only sent the email on Thursday. But timing does suggest does indicate return to market is imminent whether that’s next week or the following week remains to be seen
TL, IG raising margin has no relevence what so ever to this there were approx 20 shares that are currently suspended that had margins dramatically raised on thursday.
Longshorttrade - thanks for confirming I was hoping more in vein I suppose but found the timing odd. A question for you I don’t believe they did last time we were suspended so would you happen to know how that decision is made is it based on timeframe of being suspended or there is more to it ?
When speaking to them yesterday they said it was just there way of managing risk and exposure.
I like you and everyone on here hope suspension is lifted with a positive outcome asap. Monday would be nice !!
Cheers buddy - let’s keep our fingers crossed we have all waited long enough and frankly we all deserve a positive outcome.
PS - on a side note I apologise if I sound like a novice at times but it’s good to know that there are people on this board that always have an answer to my umpteen questions. Yes we are all here to make money but I have always seen this board as a prime example of sharing constructive knowledge amongst each other and growing my own understanding of how things operate and work. It’s good that to you all exist to provide such clarity and knowledge which I for one really appreciate.
This suspension suddenly got a lot more painful, having had to pull £30k+ out of ISAs to finance IG's 100% margin. I'll be counting the days more than most.
Moho - Keep the faith personally I would expect some form of update at least by the end of this week.................... Either confirming we are still on schedule or asking for an extension.....................................
Moho/ trustilie - forgive me if this is a stupid question but if you cover a spreadbet with a 100% margin ( as in the case of save) when/if the sp rises do you have to continually increasing your margin (i.e. adding to the pound cost of the margin as the value of the underlying share price or is that covered by the notional profit which is growing. Sorry to ask such an obvious question but i have never had to fund 100% margin on a spreadbet.
cheers
Valueseeker - I believe no as long as your total exposure is covered, when you are buying on margin effectively it's buying a position without the paying the full cost of that position, I would not be sure myself but would assume if the share gaps up on open and it's in profit that should in theory move the cash position on the account so could end up covering the 100% margin for some folks but not all depending on the individuals position what price they bought it at whether higher or lower than the suspended SP and the open price of Savannah Energy post completion of deal.
longshorttrade / nevermined - are probably more of an expert on this topic. are you guys able to answer valueseekers question ?
Valueseeker: Basically no because at 100% margin you now own the share outright so no further margin required.
Longshort/ Trustiluie - thanks guys , much appreciated. I t does make you wonder what is the point of spreadbetting if they increase margins like this. You may as well -as some have already said - just pay the full price and buy the underlying security and stick it in an isa/sipp!
Cheers
VS. As mentioned, if they impose a 100% margin which you cover, then you have covered all the risk (as if the share price went to zero), so you will never get another margin call. It's a bit ridiculous in this case (baring the African continent being nuked), but IG is an execution only platform, and the people there are not expected to engage the grey matter before making daft decisions.
3pm yesterday, 100% margin on SAVE and and increase on THG made for a tricky day!
Spoke to the IG desk, and asked the obvious question 'why'.
" Nothing to do with us, our broker increased so we have to increase - we just pass it on"
He did say he was "sorry", so that made it all ok 😬