Navigating the world of cryptocurrency trading, especially on platforms like MetaTrader 4 (MT4), requires a clear understanding of the specific contract details, costs, and platform policies. This guide provides a detailed overview of the key information you need to trade Bitcoin and other cryptocurrencies effectively using IG's MT4 offerings.
Understanding Bitcoin MT4 Contracts and Specifications
IG offers several cryptocurrency contracts for trading on the MT4 platform. The specifications for these contracts are crucial for managing your trades and calculating potential profits or losses.
| Contract | MT4 Symbol | Contract Size | Value Per Point (CFD) | Retail Account Margin | Professional Account Margin |
|---|---|---|---|---|---|
| Bitcoin/USD | BTCUSD | 1 BTC | $1 | 50.00% | 8.00% |
| Bitcoin Cash/USD | BCHUSD | 1 BCH | $1 | 50.00% | 8.00% |
| Bitcoin Gold/USD | BTGUSD | 1 BTG | $1 | 40.00% | N/A |
Important Note: During periods of high market volatility, the minimum spread for these instruments can increase significantly.
The Bitcoin market closes every Saturday at 7:00 AM AEST and reopens at 1:00 PM on the same day. Weekend trading is available for Bitcoin/USD, Bitcoin Cash/USD, and Bitcoin Gold/USD contracts.
Overnight Financing Costs Explained
Holding positions overnight incurs financing costs, which vary depending on the cryptocurrency and whether you're long or short.
For Bitcoin markets:
- Current overnight financing rate: 0.034% daily (12.5% annualized)
- Other cryptocurrencies: 0.055% daily (20% annualized)
Additionally, IG charges an administrative fee of 7.5% annualized.
How Financing Affects Your Positions
- Bitcoin Long Positions: You will pay a daily financing charge of 0.0694% (25% annualized) for positions still open after 10:00 PM UK time
- Bitcoin Short Positions: You will receive a daily financing credit of 0.0139% (5% annualized) for positions still open after 10:00 PM UK time
- Other Cryptocurrencies: Long positions pay 0.0764% daily (27.5% annualized), while short positions receive 0.0347% daily (20% annualized)
These rates are subject to regular review, with updates published on the IG website and contract details.
Special Note: Positions opened before 10:00 PM London time on Wednesday that remain open after this time will be subject to a three-day adjustment instead of one day to account for weekend settlement. Similar adjustments occur before Christmas and New Year holidays.
Financing Calculation Examples
| Position Type | Calculation Example |
|---|---|
| Bitcoin Long Position Financing | Holding 1 Bitcoin long contract at price: 7500. (1 × 7500) × 0.0694% = $5.21 daily payment |
| Bitcoin Short Position Financing | Holding 1 Bitcoin short contract at price: 7500. (1 × 7500) × 0.0139% = $1.04 daily credit |
Trading Limitations and Restrictions
During periods of exceptionally high demand or rapid price appreciation, IG may restrict new orders to buy or sell cryptocurrency CFDs through both online platforms and telephone trading.
This limitation exists because IG hedges client exposure in the underlying markets, aligning their interests with traders. However, due to the risk profile and complex nature of cryptocurrency markets, the firm must maintain limits on overall exposure.
The current nominal value limit per client for all cryptocurrency types combined is £100,000. Clients holding positions exceeding this limit risk having their cryptocurrency positions reduced.
Additionally, the platform may sometimes prevent opening new long Bitcoin positions, typically when maximum market exposure levels are reached. As trading volumes change, you may regain the ability to open new positions.
Note that these restrictions don't affect your ability to close existing positions without increasing or establishing net long exposure.
Checking Trading Availability
You can verify whether Bitcoin markets are available for long positions on IG's trading platforms:
- Mobile App: Log in, click the "Info" button on your trade ticket, select "Other"
- Web Platform: Click the dropdown menu for your selected market, choose "Get Info"
Remember to refresh your page for the most current information.
IG's Blockchain Fork Policy
IG's cryptocurrency contracts are priced based on underlying markets, with quotes provided by exchanges and market makers.
Cryptocurrencies operate on decentralized distributed ledger technology (blockchain) that records all transactions. When inconsistencies occur between different miners' software, this can lead to a "fork" in the blockchain, creating two separate versions.
Historically, cryptocurrency users have typically reached consensus quickly on which version to continue using, minimizing disruption. In such cases, the older blockchain version becomes obsolete.
When a fork isn't abandoned (a hard fork), IG typically adopts the blockchain that achieves consensus among the majority of cryptocurrency users as the basis for their contracts. The company reserves the right to determine which blockchain and cryptocurrency unit has achieved majority consensus.
If a hard fork results in a viable new cryptocurrency, IG may, at its sole discretion, open positions in client accounts to reflect this change but is under no obligation to do so. If and when the new cryptocurrency becomes tradable on major exchanges, IG will endeavor to reflect its value either by allowing contracts to be closed at that price or through cash adjustments.
If a new cryptocurrency doesn't become listed on major exchanges within a reasonable timeframe or isn't considered viable (for example, if it isn't being mined), IG reserves the right to remove worthless positions from client accounts. Clients will be notified before such actions are taken.
During hard forks, prices may experience extreme volatility, and IG may suspend trading if reliable prices cannot be obtained from underlying markets.
While IG attempts to notify clients of potential blockchain forks, understanding possible forks remains your responsibility as a trader.
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Frequently Asked Questions
What are the trading hours for Bitcoin on IG's MT4 platform?
Bitcoin markets close weekly on Saturdays at 7:00 AM AEST and reopen at 1:00 PM the same day. Weekend trading is available for major cryptocurrency pairs including Bitcoin/USD, Bitcoin Cash/USD, and Bitcoin Gold/USD.
How are overnight financing costs calculated?
Financing costs are calculated based on your position size and the current market price. For Bitcoin long positions, you pay 0.0694% daily, while short positions receive 0.0139% daily. These rates are applied to positions still open after 10:00 PM UK time.
Why can't I sometimes open new Bitcoin positions?
IG may restrict new orders during periods of exceptionally high demand or price volatility due to exposure limits in underlying markets. The firm maintains a maximum nominal exposure limit of £100,000 per client across all cryptocurrency positions.
What happens during a blockchain fork?
IG typically adopts the blockchain with majority consensus as the contract basis. If a hard fork creates a viable new cryptocurrency, IG may reflect this in client accounts but isn't obligated to do so. Trading may be suspended if reliable prices aren't available from underlying markets.
How can I check if Bitcoin is available for long positions?
On the IG mobile app, click the "Info" button on your trade ticket and select "Other." On the web platform, click the dropdown menu for your selected market and choose "Get Info." Always refresh your page for current information.
Are there different margin requirements for different account types?
Yes, professional accounts benefit from significantly lower margin requirements (8%) compared to retail accounts (50%) for major cryptocurrency contracts like Bitcoin/USD and Bitcoin Cash/USD.
Understanding these key aspects of Bitcoin trading on IG's MT4 platform will help you make informed decisions and manage your cryptocurrency positions more effectively. Always ensure you stay updated with the latest contract specifications and platform policies before executing trades.