Reserves has a particular significance in relation to IG's platform. Here, we define reserves in general investing and explain what it means to you when trading with IG.
Reserves are the liquid assets set aside for future use by an individual, central bank or business. Usually they are in the form of currency or a commodity, such as gold. For traders, reserves will usually be kept as cash that can be accessed quickly.
Companies keep cash reserves by retaining earnings, in order to insure against any unforeseen problems in their day-to-day business. In the case of banks, this is usually a requirement set out by their governing body.
Governments will also keep cash reserves in the form of foreign exchange and gold, or other commodities that can be liquidated quickly.
Oil reserves are the amount of currently accessible oil remaining in a particular economy or group of economies. As oil drilling technology improves, more oil becomes classified as accessible.
We keep a significantly larger amount of capital in reserves than is required by our regulator.