Spreadbetters and LME

This is a discussion on Spreadbetters and LME within the Spread Betting & CFDs forums, part of the Commercial category; I hope you'll forgive me for starting a standalone thread on as this concerns IG Index and the LME market; ...

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Old May 24, 2006, 7:44pm   #1
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Spreadbetters and LME

I hope you'll forgive me for starting a standalone thread on as this concerns IG Index and the LME market; have split this out from the main IG thread as would be interested in comments from those who trade LME instruments using other spread betting facilities.

The situation:

Was looking at opening two long positions on metals on a 3-month basis earlier today. Poised to place my order when IG confirm that it won't place stops on 3-month LME orders.

I asked whether this was house or industry practice, and was given the latter as a response.

A quick survey of other spread betting firms suggests otherwise - all seem perfectly happy to accept stops on 3-month LME contracts.

Given the circumstances I was faced with today, however tempting the two positions, I backed away from the trades as I wasn't allowed to place stops.

Anyone with other experiences of trading these markets using the same or other firms - and can anyone point to a plain English of contago and backwardation?
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Old May 24, 2006, 9:05pm   #2
 
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that seems odd. Email IG and ask for an explanation, quoting the other SB firms who do accept stops.
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Old May 24, 2006, 11:11pm   #3
 
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Quote:
Originally Posted by troyresearch

Anyone with other experiences of trading these markets using the same or other firms
Just over a year ago MAN Financial told me I couldn't place stops on LIFFE commodities as the system was for professional traders only and it didnt support stop orders. Kinda made me wonder what the point of having a broker was. I stopped using them.
My advice is to do the same or use direct access software that generates computer held stops.
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Old May 25, 2006, 1:59am   #4
 
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Backwardation: When the near delivery is at a premium to the next.
ie. in metals Spot is over 3months.
Contango: A discount on the same.
......or http://en.wikipedia.org/wiki/Contango
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Old May 27, 2006, 10:47am   #5
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troyresearch started this thread Update: I asked IG for an explanation and was told that it was company policy, based on the way in which prices are disseminated from the LME (ie no way of monitoring real-time). When I asked why competitors were happy to offer stops, while IG wouldn't the response was that either these other firms had found a way of monitoring prices real-time or some other means of valuing the market; alternatively there might be some uncertainty as to how / when stops are filled. I'll pick this up with the firms which are prepared to offer stops and see what they have to say.
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Old May 27, 2006, 12:38pm   #6
 
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Quote:
Originally Posted by troyresearch
When I asked why competitors were happy to offer stops, while IG wouldn't the response was that either these other firms had found a way of monitoring prices real-time or some other means of valuing the market; alternatively there might be some uncertainty as to how / when stops are filled. I'll pick this up with the firms which are prepared to offer stops and see what they have to say.
Are metals traded electronically on the LME as well as the ring trading? I'll be very interested to hear the outcome of your enquiries. I certainly wouldn't be trading metals without stops in the mkt especially considering the current volatility.
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Old May 27, 2006, 1:37pm   #7
 
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nope LME is open outcry only... the only pit traded floor left in europe i believe
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Old May 27, 2006, 2:15pm   #8
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Originally Posted by minx
My advice is to do the same or use direct access software that generates computer held stops.
Which direct access software do you recommend?
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