IG Index dispute - advice welcome!

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Old Mar 25, 2011, 10:08am   #76
Joined May 2001
Re: Email from Igindex

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Originally Posted by Ross Spur View Post
we were acting as market makers.

Isn't that what SBs do all the time... 'the client trades our prices', blah, blah,etc??
Yes, that is true, but to put his comment into the correct context I think that he was trying to say that they were making their price using other markets due to the fact that the actual underlying market was closed. More commonly called a 'grey markets', spreadbetting firms will make certain markets 'out of hours' when the underlying futures are closed. The most common one is FTSE which is quoted by many firms on a 24 hour basis.
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Old Mar 25, 2011, 11:58pm   #77
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Re: IG Index dispute - advice welcome!

I think you should count yourself lucky.
Why? Because shares can go immediately into auction and there is nothing you can do about it. This is how markets operate. Win some, lose some.
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Old Mar 28, 2011, 10:57am   #78
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Re: IG Index dispute - advice welcome!

"i find it very worrying 90% loose SB'ing long term, surely SB can't be complete luck, it's based on real world markets and commodities for christ sake! Whats going on!? "

If you consider betting with spread bets as being similar to poker playing in many mathematical & psychological respects and then examine the percentage of winners, you'll find that the percentage of long term winners is roughly very similar. Not much more than 10% of long term poker players are winners too, in other words. So 10% is not such a surprising figure: most people tend to run their losses and cut their profits too early for just one instance of poor discipline. On another note, I always found it bizarre in the late 90's/early 2000's, when there really were plenty of bad eggs (giving the few winning retail clients multiple re-quotes, manual execution, freezing the platform etc.) in the SB industry, that given how few were successful - why couldn't they just leave those 10% of winners alone, and rely on the fact that the SB firm's profits will come from the 90% who are statistically going to lose? On a positive note, in these days of far greater openness and transparency, we are all blessed for the fact that the SB companies seem to have got their act together on that issue at least.
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Old Mar 28, 2011, 11:54am   #79
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Re: IG Index dispute - advice welcome!

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Originally Posted by peakoil View Post
"i find it very worrying 90% loose SB'ing long term, surely SB can't be complete luck, it's based on real world markets and commodities for christ sake! Whats going on!? "

If you consider betting with spread bets as being similar to poker playing in many mathematical & psychological respects and then examine the percentage of winners, you'll find that the percentage of long term winners is roughly very similar. Not much more than 10% of long term poker players are winners too, in other words. So 10% is not such a surprising figure: most people tend to run their losses and cut their profits too early for just one instance of poor discipline. On another note, I always found it bizarre in the late 90's/early 2000's, when there really were plenty of bad eggs (giving the few winning retail clients multiple re-quotes, manual execution, freezing the platform etc.) in the SB industry, that given how few were successful - why couldn't they just leave those 10% of winners alone, and rely on the fact that the SB firm's profits will come from the 90% who are statistically going to lose? On a positive note, in these days of far greater openness and transparency, we are all blessed for the fact that the SB companies seem to have got their act together on that issue at least.
Yes, you had to have been there to know how bad SB was in the early days. Why couldn't they just leave the 10% of winners alone? Probably just because every business tries to maximise its profit and minimise potential risk.
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Old Mar 28, 2011, 1:08pm   #80
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Re: IG Index dispute - advice welcome!

Quote:
"Why couldn't they just leave the 10% of winners alone? Probably just because every business tries to maximise its profit and minimise potential risk. "
Ah, but alas, that made sense only in the short term. In the long term - such tactics end up shooting themselves (the SB companies) in the foot - through loss of good will/poor publicity, driving clients to open up additional accounts with competitor SB companies; and I can assure you for a fact,that on two separate occasions when at least one smart-ass, working at a certain SB company was messing around with my orders when I was on a winning streak (as good luck can happen from time to time...), presumably thinking he was oh soooo clever, I also happened to have had two persons of greater means than I, who were watching what was going on in front of their incredulous eyes. And let me tell you, they were very interested beforehand in signing up as new clients to that particular SB company, and that was in fact the only reason they'd called over, to spend some time learning how it all worked in real time! No prizes for guessing that once they witnessed the high jinks which I suffered after one too many successful bets, each person later joined another SB company, thinking I was crazy to do any business with that particular company. Even to this day, neither person (+ also, let's not forget, their loss of personal recommendation to others) would even think of opening an account with that particular company, no matter how much I try to convince either that times have changed, as the SB firms now have too much to lose through persons ranting off in forums, posting videos etc showing to everyone what happened. Now, no SB company wants to be the one that most in the blogging & forum communities refer to in unfavourable terms.

Accordingly, those bad eggs messing around with the few clients on any given winning streak might have saved a few foolish short term pennies and pounds (back in the bad old days) as they also ended up losing not only their continued undivided patronage but also the victim's most valued "worth of mouth" (personal recommendation is worth far more to the SB firms, a fact they really should have realised sooner, than all their advertising combined) to the firms which play fair. Naturally whoever played the role of "smartasses" back then, to this very day, never realised just how unluckily dumb it was to mess with those orders on those times when potential new customers were observing.

For sure, they saved a few unscrupulously taken pounds at best, and lost far, far more than that in new business. Leave those on a winning streak alone and they will sing the praises of the firm that played fair through good times & bad, which will in turn encourage more friends, family & acquaintances to become interested! After all, when on a winning streak people are far more likely to encourage others to watch to see how it can be done. Statistics will then look after the firm's long term profits infinitely better than any knavish attempts to throw a spanner in the works!

Hmmm, looking back on those particular times now, it's indeed quite satisfying to reflect on the idiocy of those who try to be too smart...
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Old Mar 28, 2011, 4:42pm   #81
Joined Jul 2010
Re: IG Index dispute - advice welcome!

I'm not saying they did the right thing. It's only fair (and pretty amusing) to see that a lot of people still won't touch ome SBs that had bad reputations with a barge pole, even when they launch new platforms and mend their wicked ways.
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Old May 18, 2011, 10:00am   #82
 
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Re: IG Index dispute - advice welcome!

Hi,

As per the last few messages I too have had an issue with IG Index and the Nikkie on the 16 March. Before they suspended trading their in house pricing dumped the maket by over 800 points!! Closed and then reopened to pre in house pricing levels! This liquidated large positions on my end and though compensation of my losses to break even are offered I should be a few £k up (quite a bit actually). I have had a final response from them now but it is unsatesfactory.

"On 16th March 2011 you held bets with IG Index (IG) on the Japan 225 Daily and the Japan 225 (Jun) contracts which were “liquidated” at 9:33pm that evening.

You state that you do not understand the price that was quoted by IG at that time (circa 8000) and you have struggled to find the corresponding quote from anyone else or by cross referencing with Bloomberg, Globex or CME. You also mention that you attempted to call IG at the time of the incident but your “multiple” efforts were to no avail. You state that you had every intention to go long at circa 800 once you received some clarity but IG systems would not permit you to do so.

In relation to events of the 16th March 2011, you have been offered a settlement of £XXXX by the IG Dealing Support Desk. However, you believe this to be unsatisfactory. You also mention that IG were unwilling to respond to queries via email and wanted communication to be taken verbally including an offer of settlement. You also disagree with the “withholding of information” in relation to the pricing methodology used by IG on their Japan 225 contracts and you still require clarification on this. ...
......As you are well aware, events on 16th March 2011 were unusual. The effects of the Japanese Tsunami, which included the foreboding of a possible nuclear crisis, meant that there was significant activity in the underlying Nikkei futures, with the Japanese Yen also being affected. The latter unexpectedly gained strength (USD/JPY fell around 300/400 points in a matter of minutes) and, as per the enclosed Bloomberg print, the underlying Nikkei Futures, started to react at around 21:22. I should mention that on the evening of 16th March 2011, the underlying futures market, from which IG make their price on the Japan 225 (the Simex session), closed at 21:30 and did not re-open again until 22:45. Therefore, between these times (21:30 – 22:45) any price quoted on this contract by IG is, what is known as an ‘out-of-hour price’. Such pricing is usually based on volume seen in other markets and client sentiment that IG would be seeing at that time. The underlying CME Nikkei opens at 22:00 and this assists IG in making a price for the Japan 225 but, as this particular underlying instrument can be very illiquid and the market spread often very wide, IG may continue to make an out-of-hour price until the opening of the Simex. Thus, official “in-hours” on IG’s Japan 225 at the time of dispute was 22:45 – 20:15 and anything outside of these hours was an “out-of-hour” price. This, of course, changed shortly after the date in question to allow for the adjustment to British Summer Time (+ 1 hour).

So, as there were no underlying instruments trading from 21:30, IG’s task of making an out-of-hour price, whilst not impossible, would not have been made any easier. Added to this was the circulation of rumours that the Simex Exchange would not re-open and there was speculation that the Bank of Japan was going to start selling JPY to try and weaken the currency. Given the circumstances IG decided to stop making an out-of-hour price on the Japan 225 contracts they offer and stopped quoting a price at 21:36:58 with the level in the cash being 8085. However, up until that time IG were nonetheless making a price and this period was inclusive of the time at which your bets were closed (21:33).

In relation to the out-of-hour price that IG were making, I would remind you that you are essentially betting on an Over the Counter (OTC) product and as per Term 2 (2) of the IG Customer Agreement, you have acknowledged that IG “will act as principal (and bookmaker) and not as agent on your behalf.” Further to this, I would also allude to Term 5 (1) which states that:

“...The figures we quote will be in respect of the level of our Index and not the level of an Underlying Market, and you acknowledge that the level of our Index may be different from the level of an Underlying Market..”.

Therefore, whilst not wishing to sound dismissive of your complaint, I would contend that the sources, such as Bloomberg, Globex etc that you have cited in support of your claims, are not relevant.

As you have mentioned and as I am aware, IG did offer to refund you for the loss (£XXXX) which was the loss accrued on the bets in question. In light of the unusual circumstances of that evening, I believe that this was a reasonable offer and, moreover, in adherence with Term 10 (4) of the IG Customer Agreement:"

So take the losses back to break-even or chalenge an in house model that deviates from the norms on a major index by over 10% for a matter of less than an hour. This move has taken out a lot of longs and saved them a hell of a lot of cash.
Any views on Mifid and execution policies?

Thanks
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Old May 18, 2011, 11:33am   #83
Joined Jul 2010
Re: IG Index dispute - advice welcome!

It's the same old Catch 22 situation. You trade their prices, but they have the option to make errors for which they're not liable.
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Old May 18, 2011, 2:44pm   #84
 
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Re: IG Index dispute - advice welcome!

Agreed the Catch 22, but this time I am annoyed enough to simply purse further and even if positions not re instated cost their legal department more than it would have cost to be honest and not screw of customers!
Does anyone think I have a case here?
SB get away with screwing clients constantly and this is a nice clear cut example of a massive deviation from underlyings for a short time frame which calls into question the whole out of hours calc methodology and advertising of financial products using underlyings vs lala land pricing!
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Old May 18, 2011, 3:11pm   #85
 
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Re: IG Index dispute - advice welcome!

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Originally Posted by hazk777 View Post
Agreed the Catch 22, but this time I am annoyed enough to simply purse further and even if positions not re instated cost their legal department more than it would have cost to be honest and not screw of customers!
Does anyone think I have a case here?
SB get away with screwing clients constantly and this is a nice clear cut example of a massive deviation from underlyings for a short time frame which calls into question the whole out of hours calc methodology and advertising of financial products using underlyings vs lala land pricing!
Has anyone ever won any dispute against IG?? They've got everything sewn up..
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Old May 18, 2011, 3:52pm   #86
 
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Re: IG Index dispute - advice welcome!

To be fair to IG they’ve offered you your money back so you haven’t lost anything. You may be angry at your supposed lost winnings – but IG Index do not know if you would have kept these positions open, saying that they would have been in profit now so they should give you that profit is unfair because, had they not been stopped out, you may have decided to close these trades at a different time for much less profit – or even a loss.

IG have admitted they made a mistake, you have not lost anything but seemed determined to pluck a profit figure out of thin air and say to them pay me this. Give it up, it won’t work. Just be thankful IG had the decency to give you your money back, and consider some better money management next time so you don’t end up losing £XXXX
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Old May 18, 2011, 4:40pm   #87
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Re: IG Index dispute - advice welcome!

It's worth going through the FOS, as IG will want to avoid that (it costs them money, win or lose).
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Old May 18, 2011, 5:38pm   #88
 
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Re: IG Index dispute - advice welcome!

In reponse to Hoggums,

I agree with your point and it is not about money management etc. and not my first trade by far. It is more about their out of hours price dropped 800 points when underlyings closed, they then closed loads of longs out and closed trading. When they opened trading again hey presto levels are back to pre their in house pricing levels! A nice little in house tank.
I should mention the positions were hedged vs other indexes and was playing a close in the spread between other indexes and the Nikkie. No other index moved by more than 1%. If any major market in the world falls, those around it would react even albeight not at a 1:1 ratio but definately more than 1% after billions of dollars gets wiped of one of the worlds largest Marcap market.
All too isolated and all too in their favour. One has to ask how many times and how many losses have incurred on prior trades and not taken notice or had such a clear discrete example of pricing failure!
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Old Aug 8, 2015, 1:56pm   #89
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Things are different now. When it is in the best interest of IG to use the underlying price vs their own, they do. See the stories recently on eurchf losses at IG. IG are a market maker when it suits them.
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Old Aug 8, 2015, 6:02pm   #90
 
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it very much depends on the market and how you deal with IG - when I trade online indices and FX with IG I fully expect them to make a market to me- in small cap equities and less liquid items which are only executable via phone ( never ever use their customer service team for this- get yourself an account manager) they will always hedge themselves - their risk in minimal.



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Things are different now. When it is in the best interest of IG to use the underlying price vs their own, they do. See the stories recently on eurchf losses at IG. IG are a market maker when it suits them.
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