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This is a discussion on my journal within the Trading Journals forums, part of the Reception category; Originally Posted by travis Awesome. You're very gifted at synthesis. And then my question would be: if you answer "no" ...

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Old Nov 18, 2009, 7:14pm   #715
 
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Quote:
Originally Posted by travis View Post
Awesome. You're very gifted at synthesis. And then my question would be: if you answer "no" to both of your questions, and we're dealing with a bucket-shop off-exchange type of trading, is it generally bad or does it depend? Can we generally say that it's better (more convenient, in terms of profit and risks) to stay away from bucket shops and stick to exchanges or not?
Yes Yes Yes; Bucket shops don't allow you provide liquidity - It is a market, they dictate, they don't abide fully to the laws of supply and demand; Allowing a single entity to manipulate quotes to their benefit.

Much more preferable is an exchange.
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Old Nov 18, 2009, 7:17pm   #716
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I think this is the main thing that people have against spreadbetting companies - they're on the other side of your trades so their interests are opposed to yours.

That said, my main spreadbet provider has always treated me fairly, so these outfits aren't necessarily bad. It's just that the temptation is there for them to be bad.
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Old Nov 18, 2009, 7:25pm   #717
 
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travis started this thread Hey, thank you both. Ok: so in general, we all agree that if commission costs were exactly the same, then exchanges would be better. The only or at least the main advantage of the bucket-shops, spreadbetting, is the small size they allow you, that in turn allows you diversify despite a small capital.
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Old Nov 18, 2009, 7:27pm   #718
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Yeah, all else being equal give me an exchange every time.
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Old Nov 18, 2009, 7:30pm   #719
 
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Another bucket shop advantage is currency exposure....
If you want to trade US stocks, your exposed to dollar - Not in a bucket shop.
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Old Nov 18, 2009, 7:31pm   #720
 
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Old Nov 18, 2009, 8:04pm   #721
 
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