What happens to my shares position if the company issues an open offer?

If you have a long CFD position on a company that issues an open offer – an entitlement to purchase more shares for less than the current market price – then you’ll have the same opportunity to take up the offer as if you held the shares physically in a share dealing account.

1. Take up the offer at the relevant subscription price

2. Take no action and let the entitlement lapse (in the majority of cases this is the default option)

To enable you to buy more shares, we’ll open an untradeable separate position on your behalf. It’ll have an opening level of zero, and will be called ‘[company name] – open offer’. The size of the position will reflect the terms of the offer. If you want to take up your entitlement, please use the MyIG portal to view all the related information and manage your election prior to the deadline. If not, you can let it lapse.

What if I have a short position?

If you sold to open your initial trade, you’ll still see the new position on your account – but you’ll have no option to take up the offer. Additionally, you’ll be at risk of being ‘taken up against’ if other traders with a long position choose to buy more shares. This means that the new position will be automatically incorporated into your original short position at the subscription price, giving you greater exposure. 

What about my stop?

If you have a non-guaranteed stop on your original position, then we’ll amend this stop to reflect the terms of the open offer and any dilution in price.

If you have a guaranteed stop attached to your position, then you’ll have no choice but to automatically take up the offer. This is to ensure your exposure and monetary risk remain the same, and also to take on board any price dilution in the stock. 

Your original position will then be closed out on the morning of the ex-date at the level at which the stock closed on the previous business day, and a new position will be opened on your account at an increased size (the equivalent of buying more shares) to reflect you taking up the new offer. 

Your opening level will be adjusted using the previous closing price of the stock to give a theoretical opening level. Any stops and limits will be adjusted to maintain the same monetary risk as your initial position.

Please note: This information is intended as a generic example, and subject to change at any point. It may not apply in every scenario.