Are CryptoCurrencies REGULATED?
No. Cryptocurrencies remain mostly unregulated around the world by governments and central banks. How any future regulation will look and how it will take shape could have a significant impact on the value of different cryptocurrencies. You should bear this in mind when managing your risk on any trades you place on these products.
DO YOU OWN the underlying Cryptocurrency WHEN YOU TRADE them WITH SPREADEX?
No, you do not physically own any Cryptocurrency when trading them with Spreadex. With Spreadex you have a Spread Bet or CFD on the price of the Cryptocurrency. As a result you do not need a Wallet or access to a Crypto-exchange to trade them.
IS TRADING BITCOIN & other Cyptocurrencies RISKY?
Trading any market on Leverage is highly risky and can result in losses larger than your initial deposit. However, Bitcoin & other Cryptocurrencies can be particularly volatile and have been increasing in volatility recently.
More specifically, there are some key risks that you should bear in mind when deciding to trade Cryptocurrencies with Spreadex
• Moves of 20% + up or down in a day are common, so you should consider this when deciding on whether to trade on leverage and your trade size.
• Cryptocurrencies are not mainstream currency and therefore their future are anything but certain. How they play out as a practical use is not yet known, and therefore could significantly affect the value of each individual Cryptocurrency in the future.
• Future Regulation could significantly impact the prices. Currently we do not know when and what the future regulatory landscape will be for Cryptocurrencies.
WHAT TIMES CAN I TRADE CryptoCurrencies WITH SPREADEX? CAN I TRADE IT AT THE WEEKENDS?
Spreadex offers a derivative price on Cryptocurrencies. This market is not currently open at the weekends; therefore you can only trade Cryptocurrencies with Spreadex from Sunday night till Friday evening when there is a derivative price available. For specific times when the market is open during the week please refer to the Market Info Sheets.
WHAT HAPPENS IF PRICEs MOVE SIGNIFICANTLY DURING THE WEEKEND?
Currently you cannot trade Cryptocurrencies with Spreadex during the weekend. We offer a price derivative based which opens on Sunday Night and closes Friday Evening. When our market is closed you will not be able to close your position. You should consider this when deciding whether to open a position, as this may mean large ‘gaps’ in the price from Friday’s close to Sunday’s open. For specific times the market is open during the week please refer to the Market Info Sheets.
Are THERE MAX STAKEs ON Cryptocurrencies?
There are both client and overall book limits which Spreadex operates on Cryptocurrencies that may result in restrictions on Bet Sizes and/or the putting of the market on closing only, un-shortable or un-longable.
CAN I SHORT Cryptocurrencies with spreadex?
Yes, with Spreadex you can go long or short on Cryptocurrencies dependant on book limits.
HOW DO I ROLL A Cryptocurrency TRADE?
Your Cryptocurrency Trade will automatically roll each day at the specified roll time, the trade will continue to roll up until the position is closed.
WHAT IS BITCOIN?
Bitcoin is a type of Cryptocurrency, launched in 2009. Cryptocurrencies, unlike traditional fiat currencies, are virtual currencies which operate outside the control of Banks and Governments. However, they can still be exchanged or speculated on in the same way as physical currencies can be.
HOW DOES BITCOIN WORK?
Bitcoin works via two underlying processes: blockchain and mining.
A blockchain is a public ledger of all the bitcoin transactions that have ever occurred. These transactions are grouped together into ‘blocks’ which are linked and secured during cryptography (a process known as Mining). Once recorded the data at any given block cannot be altered without the alteration of all subsequent blocks which in itself requires the collusion of the network majority.
Mining is the process required to secure together blocks via cryptography. Once a block is secured, a reward is released as a form of payment for the computing power needed. In the case of Bitcoin this is currently 12.5 Bitcoins, however, this does alter over time.
There is a finite number of Bitcoins available to be mined – 21 million, currently around 16 million have been mined.
Are there any limits to trading cryptocurrency?
Given the high demand and price increases, we may restrict any new orders to buy or sell cryptocurrency, both online and over the telephone.
Due to the various risks and complexity involved in trading underlying cryptocurrencies, there's a limit to the total amount of physical cryptocurrency we can hold as a business. We therefore need to reflect this by limiting the exposure that each client can maintain through CFDs and spread bets. This limit is currently £1,500,000 notional (or equivalent) per client for Bitcoin and Ether. For alternative coins, this may differ. Any client with a notional size above this limit is at risk of having their positions reduced.
Calculate Funding Charges for Cryptocurrency Positions
If you hold a daily bet through 21:00, your bet will be kept open for the following day's trading and a funding charge will be levied on your account.
Funding is charged to reflect the cost of financing a position that you hold having only put down a fraction of the value as a deposit.
The daily funding is based on an annual percentage of the notional value of the position divided by 365 days. If the annual funding charge is 30%, then the daily funding charge would be 30%/365 = 0.08% of the total position value. Note the funding charge can vary whether the position is long or short and can result in either a debit or credit.
For Example: Funding for a long position in Bitcoin of £1 with a price of 42000 at the roll time, the daily funding charge would be (1x42000) x 0.08% = £33.60.
Who can Trade Cryptocurrency’s?
Due to regulation from the FCA, currently only professional clients are able to hold positions in Cryptocurrencies and Crypto ETFs.
