Futures Betting

jkplay · Nov 25, 2007

Hi All,

I just wanted to know if anybody is using FuturesBetting? I have been thinking about it for a while and have just done some research and from what I can see they aren’t as attractive as many seem to suggest.

A few key points:

£2.00 extra per lot if you need to deal over the phone
Minumum £5000 deposit to open and maintain an account
They can’t offer guaranteed stops – from what I can see
Minimum of 1 lot for everything (£10 per point on the FTSE and this will only go up in £10's)
Can’t trade anything out of market hours
Can only trade in currency of the underlying instrument.
Not regulated by the FSA – only office is based in Gibraltar

Also they are not particularly cheap. They do charge a 1.5 spread on the FTSE (if you place more than 10 trades a day this does go down) and you will have to pay an extra £2 if you need to call up to place the trade, they don’t make a price 24 hours a day either. They also charge 4 points ontop of the mini dow spread on CBOT, which is more than im paying at the moment.

I know a few Spreadbetting companies do allow you to bet on a ‘daily’ futures contract that does correspond exactly with the underlying futures – if it is hedged or not is probably totally dependant on the size of you order or the success of you trading.

The main reason to go is the fact that they hedge everything and that seems to eliminate any conflict of interest that may otherwise exist in some peoples minds. I do wonder why they do that because it costs them £xx in broker fees to hedge every bet, I suppose they are just after serious traders who demand the transparency of DMA within a tax free wrapper.

While their offering does seem attractive at first, after digging a little deeper I think the next step up for me would be a DMA CFD service. I do trade futures and fx but also like the ability to trade stocks, and it’s nice to only have to worry about one platform.

Saying that I think I will only bother using the DMA for equities, just so I can see market depth and check size etc. I am more than happy trading futures and fx through my current broker and most of my frustration does seem to come from placing bad trades instead of not having the tools to execute and monitor the right trade.

I don’t care if they hedge my bets because I have never seen any discrepancies or major market manipulation through my SB account, and I do check with my live market feed.

If you trade a lot of volume and demand nothing more than DMA then it may be the best choice. Mind you, if you trade big size I think you will get DMA through any Spreadbetting firm. Would you trust your trading capital with a firm not regulated by the FSA, I don't know if I could?

I hope some of you are trading with them so you can let me know how you find it and can correct me in any mistakes.

Also I would be interested to find out what their margin requirements are like and if you can carry a contract into a further month without having to pay the whole spread again?

JK

Jack o'Clubs · Nov 26, 2007

There are already a couple of threads on FB so suggest you search for these as they answer most of the questions you raise. Also this one: http://www.trade2win.com/boards/showthread.php?t=21263

Basically if you're trading futures in decent size they make sense - if you don't (and these days that includes me - my focus is mostly equities), then they don't. Some time ago they tweaked their commission structure to make it even more biased away from low-volume traders: clearly just business that is not profitable for them, which given that they provide good support, a very good platform and free market data is fair enough.

Your point about guaranteed stops and comment on the FTSE 'that they don't make a price 24-hours a day" suggests you don't completely understand their model - in which case fine: if you're happy with your current s'betting options then that's great.

jkplay · Nov 26, 2007

Jack o'Clubs said:
There are already a couple of threads on FB so suggest you search for these as they answer most of the questions you raise. Also this one: http://www.trade2win.com/boards/showthread.php?t=21263

Basically if you're trading futures in decent size they make sense - if you don't (and these days that includes me - my focus is mostly equities), then they don't. Some time ago they tweaked their commission structure to make it even more biased away from low-volume traders: clearly just business that is not profitable for them, which given that they provide good support, a very good platform and free market data is fair enough.

Your point about guaranteed stops and comment on the FTSE 'that they don't make a price 24-hours a day" suggests you don't completely understand their model - in which case fine: if you're happy with your current s'betting options then that's great.

Hi there,

Yeh I know how futures are traded thank you very much, and why the don't offer guaranteed stops. Do you not think that being able to exit/enter trades 24 hours a day is an advantage, as is the ability to use guaranteed stops?

Sorry for not noticing the post you linked but that was posted over a year ago....

I think any SB that only lets you deal only in lots could call themselves DMA. That is because trading in lot sizes gives the firm the ability to hedge every trade straight away. The mini-mini lots all other SB's offer provide alot more flexibility - both in terms of hedging accuracy for the investor and when specifying stake size - it also explains why they can't/don't need to hedge every trade.

I couldn't trade with FB for two main reasons

1. They are not regulated by the FSA and the level of business you would have to do to make them worthwhile would prevent me from sleeping at night knowing all that cash is in unregulated hands.

2. Wide (err) spreads and lack of many features my current provider offers.

When balancing it up that is why I have decided not to use them. Do you trade with them Jack?? Perhaps you could let me know what their margin requirements are like now.. no obvious information on their website which makes me think they may be very high.

JK

Jack o'Clubs · Nov 26, 2007

jkplay said:
Hi there,

Yeh I know how futures are traded thank you very much, and why the don't offer guaranteed stops. Do you not think that being able to exit/enter trades 24 hours a day is an advantage, as is the ability to use guaranteed stops?

Sorry for not noticing the post you linked but that was posted over a year ago....

I think any SB that only lets you deal only in lots could call themselves DMA. That is because trading in lot sizes gives the firm the ability to hedge every trade straight away. The mini-mini lots all other SB's offer provide alot more flexibility - both in terms of hedging accuracy for the investor and when specifying stake size - it also explains why they can't/don't need to hedge every trade.

I couldn't trade with FB for two main reasons

1. They are not regulated by the FSA and the level of business you would have to do to make them worthwhile would prevent me from sleeping at night knowing all that cash is in unregulated hands.

2. Wide (err) spreads and lack of many features my current provider offers.

When balancing it up that is why I have decided not to use them. Do you trade with them Jack?? Perhaps you could let me know what their margin requirements are like now.. no obvious information on their website which makes me think they may be very high.

JK

fine - I hadn't realised your questions were rhetorical and you had already decided on the answers

jkplay · Nov 26, 2007

Jack o'Clubs said:
fine - I hadn't realised your questions were rhetorical and you had already decided on the answers

I wasn't asking any questions and just wanted to put my findings up for discussion.

My only two questions are:

1. Are any of you trading with them and how do you find it. What made you decide to go for it over any other market access?

2. What are their margin requirements like?

JK

Jack o'Clubs · Nov 26, 2007

jkplay said:
I wasn't asking any questions and just wanted to put my findings up for discussion.

My only two questions are:

1. Are any of you trading with them and how do you find it. What made you decide to go for it over any other market access?

Not now. Because I only use futures for hedging rather than trading in their own right, and because I have an IB account I put everything through IB for simplicity. But when I did use them I found them totally above board and customer services were very good. If you're dealing in real size (weren't you contributing to the £1000/point thread?), don't underestimate the value of being able to work your own order into the market rather than have to take a s'bet firm's price.

jkplay said:
2. What are their margin requirements like?

JK

As far as I remember they were the standard exchange margins. If you call them I'm sure they'll email you the list.

jkplay · Nov 26, 2007

Jack o'Clubs said:
Not now. Because I only use futures for hedging rather than trading in their own right, and because I have an IB account I put everything through IB for simplicity. But when I did use them I found them totally above board and customer services were very good. If you're dealing in real size (weren't you contributing to the £1000/point thread?), don't underestimate the value of being able to work your own order into the market rather than have to take a s'bet firm's price.

As far as I remember they were the standard exchange margins. If you call them I'm sure they'll email you the list.

Thanks Jack, i'll give them a call to discuss margins a little deeper. A basic question about IB, going slightly off topic I know but do you have to trade futures in full lots with them or can you break it down for accuracy?

JK

(I don't trade anything like £1000pp by the way but have experience of working large order's through them with a fair amount of success)

Jack o'Clubs · Nov 26, 2007

jkplay said:
Thanks Jack, i'll give them a call to discuss margins a little deeper. A basic question about IB, going slightly off topic I know but do you have to trade futures in full lots with them or can you break it down for accuracy?

JK

(I don't trade anything like £1000pp by the way but have experience of working large order's through them with a fair amount of success)

Yes with IB futures you're dealing full lots, or minis where they're available on the exchange in question. Not sure how their forex system works as I don't use it, but I think there may be more flexibility to trade in absolute amounts rather than lot sizes.

A Dashing Blade · Nov 27, 2007

jkplay said:
1. They are not regulated by the FSA and the level of business you would have to do to make them worthwhile would prevent me from sleeping at night knowing all that cash is in unregulated hands.

the Gibraltarian FSA has a reciprical agreement with the UK SFA

jkplay said:
2. Wide (err) spreads and lack of many features my current provider offers.

Er . . . . you'll get EXACTLY the same spreads as in the underlying futures markets.

I use them, have had no problems with them for over 2 years after thoroughly checking them out both officially and, er, shall we say unofficially.

jkplay · Nov 27, 2007

A Dashing Blade said:
the Gibraltarian FSA has a reciprical agreement with the UK SFA

Er . . . . you'll get EXACTLY the same spreads as in the underlying futures markets.

Ok thanks for that,

Well the spread isn't exactly the same as the futures, and if you take the FTSE for example the charge 0.5 in and 0.5 out ontop of the market spread when capital spreads charge effectivley half as much with 0.25 in and 0.25 out assuming the futures trade at a 0.5 spread - but that isn't DMA of course.

Also this reprical agreement you talk about doesn't reassure me. I phoned them up and they assured me they are on the FSA register. I then checked it out and couldn't see their details so that means the guy I spoke to either doesn't have a clue or was trying to palm me off.

I think i'll stay clear, thanks for the innput though.

JK

FBet · Jan 26, 2008

jkplay said:
Ok thanks for that,

Also this reprical agreement you talk about doesn't reassure me. I phoned them up and they assured me they are on the FSA register. I then checked it out and couldn't see their details so that means the guy I spoke to either doesn't have a clue or was trying to palm me off.

I think i'll stay clear, thanks for the innput though.

JK

FSA Register

I also called Fb to find out if they were FSA registered.The answer I got was that they are FSC registered ( Gibraltar Financial Services Commission ) and have what they call a "Passport" to trade in UK. He also told me to check the FSA website and I got the following info from there:

457584 - Futuresbetting.com Limited

Current status: EEA Authorised
Effective Date: 22/09/2006
Tied Agent:
Undertakes Insurance Mediation:
Registered under Money Laundering Regulations:
Address: Suite 10
Watergardens 2
Gibraltar

Phone: +350 47 310
Fax:
Email:[email protected]
Website:

DC STOXX · Jan 26, 2008

I was thinking it could be good to use them instead of direct accsess but either i cannot understand the commision structure properly or it completly overpriced from a scalpers point of veiw?

Normal 20 lot dax trade which i scratch for example is roughly 30 euros commisions.

With the futures betting it would cost me at least 1 tick in and one tick out per lot. This is pretty expensive 25 euros x 20 lots = 500 euros

Even with the tax burden removed it is still not a viable option unless i have missed something?

What if i wanted to just take one tick on the trade? I would gross 250 euros but still be 250 euros down on the trade....

Am i being dumb?

winmoney · Feb 21, 2009

FAS Reg

Just a quick note - I worked as an FSA regulated financial advisor in Spain/Gib/UK

The FuturesBetting entry on the register is absolutely fine, and what you would expect
from a regualted firm operating from GIB. Don't be concerned about the FSC, it has
the same high standards as the FSA

ScoobyStoo · Apr 3, 2009

I'm looking into using FB as well to take advantage of the tax free wrapper. Does anyone have any opinion on the quality of their datafeed? I'm currently using NinjaTrader and Zen-Fire. The Zen-Fire unfiltered tick data feed is about the best out there for a retail trader. Any ideas how the FB feed compares? Any throttling/filtering going on?

IMHO, the question about whether to trade via a spread bet wrapper is simple to answer. It's all about timescales. You simply have to do the sums and compare the % of your average gross profit being lost to commisions (via the additional spread) against the % of your average gross profit being lost to the taxman (via CGT). If you are scalping for ticks then the extra spread is going to represent a large % and therefore SBing is never going to make financial sense. However, for a daytrader like me who's in and out the market only 2-3 times a day, it makes perfect sense. The cost of the extra spread more than outweighs the CGT hit.

Slapshot · Apr 16, 2009

ScoobyStoo said:
I'm looking into using FB as well to take advantage of the tax free wrapper. Does anyone have any opinion on the quality of their datafeed? I'm currently using NinjaTrader and Zen-Fire. The Zen-Fire unfiltered tick data feed is about the best out there for a retail trader. Any ideas how the FB feed compares? Any throttling/filtering going on?

IMHO, the question about whether to trade via a spread bet wrapper is simple to answer. It's all about timescales. You simply have to do the sums and compare the % of your average gross profit being lost to commisions (via the additional spread) against the % of your average gross profit being lost to the taxman (via CGT). If you are scalping for ticks then the extra spread is going to represent a large % and therefore SBing is never going to make financial sense. However, for a daytrader like me who's in and out the market only 2-3 times a day, it makes perfect sense. The cost of the extra spread more than outweighs the CGT hit.

I've been using FB for about 3 months or so and the speed of their fill is instant, never had a requote and the price is that of the market. No complaints from me.

pit pony · May 6, 2009

jkplay said:
Hi All,

I just wanted to know if anybody is using FuturesBetting? I have been thinking about it for a while and have just done some research and from what I can see they aren’t as attractive as many seem to suggest.

A few key points:

£2.00 extra per lot if you need to deal over the phone

Minumum £5000 deposit to open and maintain an account

They can’t offer guaranteed stops – from what I can see

Minimum of 1 lot for everything (£10 per point on the FTSE and this will only go up in £10's)

Can’t trade anything out of market hours

Can only trade in currency of the underlying instrument.

Not regulated by the FSA – only office is based in Gibraltar

Also they are not particularly cheap. They do charge a 1.5 spread on the FTSE (if you place more than 10 trades a day this does go down) and you will have to pay an extra £2 if you need to call up to place the trade, they don’t make a price 24 hours a day either. They also charge 4 points ontop of the mini dow spread on CBOT, which is more than im paying at the moment.

I know a few Spreadbetting companies do allow you to bet on a ‘daily’ futures contract that does correspond exactly with the underlying futures – if it is hedged or not is probably totally dependant on the size of you order or the success of you trading.

The main reason to go is the fact that they hedge everything and that seems to eliminate any conflict of interest that may otherwise exist in some peoples minds. I do wonder why they do that because it costs them £xx in broker fees to hedge every bet, I suppose they are just after serious traders who demand the transparency of DMA within a tax free wrapper.

While their offering does seem attractive at first, after digging a little deeper I think the next step up for me would be a DMA CFD service. I do trade futures and fx but also like the ability to trade stocks, and it’s nice to only have to worry about one platform.

Saying that I think I will only bother using the DMA for equities, just so I can see market depth and check size etc. I am more than happy trading futures and fx through my current broker and most of my frustration does seem to come from placing bad trades instead of not having the tools to execute and monitor the right trade.

I don’t care if they hedge my bets because I have never seen any discrepancies or major market manipulation through my SB account, and I do check with my live market feed.

If you trade a lot of volume and demand nothing more than DMA then it may be the best choice. Mind you, if you trade big size I think you will get DMA through any Spreadbetting firm. Would you trust your trading capital with a firm not regulated by the FSA, I don't know if I could?

I hope some of you are trading with them so you can let me know how you find it and can correct me in any mistakes.

Also I would be interested to find out what their margin requirements are like and if you can carry a contract into a further month without having to pay the whole spread again?

JK

everybody makes there own mind up, but a couple of things i would like to point out is.
segregated accounts, Futuresbetting do honour these, when they siezed trading back in March 2008 because of Global, every penny in my account was returned within 3 working days. They are regulated by the FSC which is the Securities commsiion of Gibraltar,who are to my knowledge are pretty much the same as the FSA.I think Fbc are registered as a company on the FSA website.
also now they are owned by LCG who are regulated by the FSA,does this not mean anything.
surely it does not matter if they hedge 100% of trades and pay clearing fee's(there choice)..theit spreads are fixed.

Futures Betting

jkplay

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Jack o'Clubs

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jkplay

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Jack o'Clubs

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jkplay

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Jack o'Clubs

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jkplay

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Jack o'Clubs

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A Dashing Blade

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jkplay

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FBet

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DC STOXX

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winmoney

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ScoobyStoo

Slapshot

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pit pony

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