Queries re Stops and Intertrader

This is a discussion on Queries re Stops and Intertrader within the Spread Betting & CFDs forums, part of the Commercial category; Originally Posted by peakoil Thanks mike. :-) Sounds good. I had some laptop issues when I was trading with them ...

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Old Sep 15, 2017, 12:35pm   #9
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Joined Feb 2012
Originally Posted by peakoil View Post
Thanks mike. :-) Sounds good.
I had some laptop issues when I was trading with them ( my problem not theirs). Anyway closed the account and withdrew without issue, that's when they upgraded the platform, I'm not familiar with it as I've been using IG recently ... do they still have fixed spreads on popular instruments ?
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Old Sep 15, 2017, 12:58pm   #10
Joined Jul 2008
peakoil started this thread @mike. exactly - there's another qtn hopefully those who are using their current platform, to place actual trades, may be able to answer: are all of their spreads always fixed, or do they sometimes move (i.e., widen/reduce) on the current non-demo platform? (and again, any comments on stops most welcome)
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Old Sep 15, 2017, 1:28pm   #11
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Most s/b brokers are variable spread's. That was one thing that drew me to intertrader was their fixed spread, fixed only in uk market trading hours I think.... It may be a " limited risk account " that your looking at that places stop's by default, I'm sure there is a way to steer around it.
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Old Sep 15, 2017, 1:47pm   #12
Joined Mar 2014
Originally Posted by peakoil View Post
To my eyes, Intertrader is currently looking like the next best thing to sliced toast - even if they won't be beating IG Index any time soon -who I continue to recommend with the very greatest of confidence. All other things (spreads, margins etc.) being roughly Ďa little here a little thereí, itís recently becoming near on impossible to ignore, any longer, both their Ďtrading rebateí offer (up to 10% off spreads for very active clients) and then thereís intertrader's account opening Ď10% credit offer - up to £10,000í. For anyone who is a frequent flier, these kind of offers are very tempting indeed...

But, I do have one lasting concern, which is the very reason why Iím not yet a client, and itís about CGSL (Computer Generated Stop Losses). As I understand matters (and please do correct me where mistaken), intertrader seem to make stop losses compulsory for every opened spreadbet. Now I might, at this point, admit that I very rarely use stop losses, given that with just under two decades worth of spreadbetting experience, Iíve learned (and use) other methods of managing risk, rather than solely relying on stop losses. So itís very important for me (and Iím sure Iím not the only one...), that stop losses remain completely optional, as opposed to compulsory. I usually scale in to a larger position, over a period of time, and thereís frankly no point doing that if an arbitrarily generated stop loss is going to start cutting into any of my positions, before Iíve even finished building them!
Nevertheless please donít take this as an argument, nor even the beginnings of one, against stop losses. Far from it. I believe that everyone needs to learn to use stop losses sensibly and have no problem admitting that I always used stop losses during my earlier learning years. More to the point, this poster would certainly encourage all inexperienced spread bet clients always to think of where to put your stop loss when you open your spreadbets. Where to place a stop loss is a skill which needs to be developed, long before you can even start to think of using other ways of managing risk. And I very much accept that plenty of experienced spread betting clients regularly make use of stop losses, as an essential part of their technique, and do well when doing so. Theyíre just not usually for me. But enough digression about the concept of using stop losses.
Back to Intertrader.
Could someone, who is a client of intertrader, please fill me in on how stops are used on their platforms? In particular:
(1) is it the case that stop losses really are compulsory as regards all opened spreadbets on the Intertrader web platform?
(2) Is it possible to cancel every stop just after opening a spreadbet on their webplatform, or is it only possible to edit each stop?
(3) Even if they insist on stop losses on all spreadbets, no matter how experienced a client is, then is it possible (i.e., are you allowed) to edit stops very widely (for example a 1000 points out on the ftse) Ė so that they are effectively and/or extremely unlikely to be hit, when scaling in to a larger position?
(4) Lastly, do you have any other comments about intertrader, which someone whoís thinking of signing up, needs to be aware of Ė e.g., how they manage withdrawals? How you find their customer service? Etc. Thank you in advance.
Hi Peakoil

I'm not 100% certain this answer will help but it may shed some light on how Intertrader sets itself up.

Intertrader used to be an IB to LCG back in the days when LCG used one of the early Ariel Communication platforms. Back then the Ariel platform placed an equity stop on all positions as a default.

Last year a couple of things happened; Intertrader split from LCG and went their own way and Ariel Communications having lost most of its clients was swallowed up by their last remaining client, ETX Capital.

I can't imagine that ETX would allow Ariel to offer ongoing support to the Ariel platform that Intertrader and LCG was using and I suspect Intertrader may still be using such an old, unsupported version of the Ariel platform as an LCG legacy that you must still place a stop when you open a new position.

As an aside, you may have noticed that when ETX launched with their Ariel platform back in 2009 they did not force you to place an equity stop. That was a specific Ariel development that I understand was a show stopper.

Have a nice weekend
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Old Sep 15, 2017, 2:09pm   #13
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peakoil started this thread Thank you v m, Highbury FX. Nice background info. I was using ETX but dislike the fact that they don't do daily statements, only monthly statements, meaning that unless clients pay absolute attention to all trade open/close emails, any errors (which may easily stand out at the end of a day's toil, after reviewing a daily statement) could potentially slip through the net, far far further down the line.
But OTOH, you're absolutely right that ETX (like many firms) allow clients to use stops whenever they wish or indeed, not at all, as the case may be. I continue to find it quite bizarre that some firms still insist on Computer generated stop losses (picked out of the blue/according to the firm's own algorithm of where a stop should be), which cannot possibly suit all styles of spreadbetting. <br>Nonetheless on reading your response, at least I can understand how this came to be as regards intertrader. I'm just surprised that there hasn't been more demand for optional stops, among their existing client base, especially since they splitted from London Capital Group . And that's not forgetting that every client's automated stop ends up (for all intents and purposes) effectively being the firm's automated limit order... Which might just be another reason why... I'm honestly just a little bit cynical about the spiel that &quot;we don't mind whether our clients win or lose&quot; (cough) (cough) '...as long as they accept our self imposed limit order algorithms every single time, when trying to beat the markets.'

Wish you a nice weekend too :-)
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Old Sep 15, 2017, 4:45pm   #14
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If I can help

I built LCG many years ago and in those days the CGSL was a bathroom idea. At the time there was considerable bad publicity around clients not having stops and ending up losing huge sums that they could not afford as the brokers used to make margin calls and give clients time to put extra funds in to support positions.

Naturally enough many clients did not stop out and were forcefully exited from positions once the loss became too great to bear. Spread Betting companies also offered credit accounts which exacerbated the problem.

The CGSL system was built around a Minimum Margin Requirement (MMR) to open a position and a Maximum Margin Allocation (MMA) which defined the most that the computer would automatically assign to a position. i.e if you had £5,000 in your account and you took out a £1 bet it is pointless for the computer to allocated a stop 5,000 points away. So for each market the computer had a maximum
amount of money that it would take from your account to support each position and place a stop at that level (with a 20% buffer for slippage).

The MMR meant that people could open positions with much less money in their account than was required for the MMA but obviously placed a stop at a correspondingly much closer level.

As an example (if i remember correctly) the Rolling FTSE had an MMR of 30 and an MMA of 240.

so you could place a £1 bet with as little as 30 quid in your account (with a stop 24 points away) but if you had £5,000 in your account then the computer would take £240 as allocated margin for this new position but place a stop 192 points away (80% of 240)

You can always change the stop to make it as close or as far away as you liked (as long as you ha the available funds) but you could never actually remove the stop.
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Old Sep 15, 2017, 6:42pm   #15
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peakoil started this thread Thanks also for your response, timetotrade simon. I quite agree that for newbies, the inexperienced and those who are comfortable using stops on every spreadbet, mandatory stops, even non-guaranteed ones, make at least some sense.

What I am about to say, I say with all respect to you, and further, please accept that I'm only going on the response as you've put it above. Nevertheless, I stand corrected where wrong, &/or where it's either obvious or not, that I've misunderstood anything you've written above. With that being said, here goes...

The problem with arbitrarily calculating stops according to the any simple formula is essentially that there are other ways of managing risk, with which (1) many long term clients eventually become aware; and (2) such a (MMR & MMA) system which crudely calculates market net exposure without regard to the fact that certain asset classes move similarly (some very similarly) and, by definition, vice versa. Experienced Client could, for just one example of many I could give, be £8 long on ftse and around £5pp short on Dax. Wouldn't your computer generated (MMA + MMR) formula treat that Client's net long exposure exposure as being perhaps north of £70,000 and then separately assess his net short exposure of a similar amount (by 'separately', that is to say, in addition to his long exposure)? Meanwhile, the trading reality (as you well know) is that there are plenty of times, with regard to certain trading combinations (which anyone who's still standing strong, after a decade or so, realises or should come to realise) when a client is almost approximately hedged - should any worldwide black swan event suddenly occur.

I think it would be hard to argue against the contention that the ultimate test of risk management is not how many non-guaranteed stop losses anyone has in place, at any given point in time, but rather on how effectively he is truly exposed should events suddenly turn in an extreme way. Given the choice between holding only a non-guaranteed stop loss or choosing an alternative form of risk management, there is no doubt which is the better strategy when the black swan (viz., the ultimate test of any risk management system bar none) appears. Or, let's say for another example, we're back in particularly volatile times, at which point Client has a long exposure on the ftse and no short position on the indices, but also happens to be long gold and long the Vix in such a way that he is effectively hedged, with regard to his exposure to extreme volatility or (for that matter) any black swan event at a given time.

Notwithstanding, such examples, it could be submitted, with plenty of precedent to support such a position, that non guaranteed stop losses (which are the type which I understand such an automated system is designed to promote) are, at the very worst of times, the costliest form of risk hedging. When, for example, the hardest hitting black swan events occur (e.g., the swiss debacle, the plane hits the building...Etc), non-guaranteed stop orders tend to show their 'true colours' - exactly at the time when they are most needed - which is why those who are experienced, also tend to rely less on them, and more on other ways to manage risk exposure.

All of which goes some way, I would at least hope, towards explaining why some of the most experienced clients would put it that compulsory non-guaranteed stop orders are patronising at best, and no better than 'a leaky umbrella', when really needed!

I could go on, but again I must stress that my points are aimed not so much to you, as I would accept without a second thought that you are, no doubt, well beyond savvy with everything I've written above, but moreover and basically to explain to others why it is wise to educate yourselves gradually, over time, to all the ways of both managing risk and hedging strategies, so that you don't always assume that non-guaranteed stop orders will always save you.
They won't.
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Old Sep 15, 2017, 7:06pm   #16
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It's remarkable you have all these hedging strategies against risks, yet unable to perceive the deadly risk of a shop who would not respond to you. Perhaps the promise of rebates and free bonus money have a blinding effect ? What happens if something critical happens and they don't respond ?

When a commercial entities entices you with freebies, there is usually a catch. This is just business. It's entirely possible the bonuses and the stops are two sides of the same coin. It would be futile to tell them you only want one side of the coin.
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