Aren't you a little bit harsh here Ross?
Best Thread Capital Spreads
Aren't you a little bit harsh here Ross?
Definitely not. Seems like fair comment until I hear that LCG has lost £250m and the entire staff are sleeping in carboard boxes in Devonshire Sq.
capitalspreads
Experienced member
- Messages
- 1,452
- Likes
- 79
ross
wow....you really never think about your comments do you? The point about much legislation (especially FSA) is that it works both ways... if we allow clients to trade on a bad price then... oh dear... all those poor people with open positions whose stop would have been activated by the price must also be executed.
when the underlying market widens we continue to quote our tight spreads. So I am not sure what your problem here is. If we widened our prices on wider underlying spreads the clients would not get any better prices ... far from it.... they would get much worse spread AND have stops activated on the sudden spread widening... I can imagine the kind of comments we would get on this thread if we did such a thing.
If a REAL widened spread (as opposed to an exchange error, convention in quoting error, or error in our system) occurs in the underlying market then our prices reflect it to a certain extent so I am not sure what your problem is with this.
On equities we reflect the real spread in the market plus our spread, we open a minute after the real market opening to avoid the silly prices on the LSE/NYSE/Dax etc opening. As we do operate a stop system on "our quote" it is always wise for a client to have sufficient resource in their accounts to take account of the wider prices that may occur at certain times. But clients should always be aware that LCG has NO CONTROL over market prices ... if a real price event happens then... sorry our quotes reflect it.
Your comment on widened price problems seems not to be a comment as I am not sure what problem we should be fixing.
Simon
wow....you really never think about your comments do you? The point about much legislation (especially FSA) is that it works both ways... if we allow clients to trade on a bad price then... oh dear... all those poor people with open positions whose stop would have been activated by the price must also be executed.
when the underlying market widens we continue to quote our tight spreads. So I am not sure what your problem here is. If we widened our prices on wider underlying spreads the clients would not get any better prices ... far from it.... they would get much worse spread AND have stops activated on the sudden spread widening... I can imagine the kind of comments we would get on this thread if we did such a thing.
If a REAL widened spread (as opposed to an exchange error, convention in quoting error, or error in our system) occurs in the underlying market then our prices reflect it to a certain extent so I am not sure what your problem is with this.
On equities we reflect the real spread in the market plus our spread, we open a minute after the real market opening to avoid the silly prices on the LSE/NYSE/Dax etc opening. As we do operate a stop system on "our quote" it is always wise for a client to have sufficient resource in their accounts to take account of the wider prices that may occur at certain times. But clients should always be aware that LCG has NO CONTROL over market prices ... if a real price event happens then... sorry our quotes reflect it.
Your comment on widened price problems seems not to be a comment as I am not sure what problem we should be fixing.
Simon
Simon
I have just been made aware by a friend who is using an outfit of London Capital Group other than Capital Spreads that he had several news trades reversed. He has shown me his statement as well as your final response to his complaint and I find it quite troubling.
So the question has to be asked as to whether there is a trend developing here where LCG is having a second look at trades done during the news time and cancelling and reversing those trades they don't like? This may have ramifications for anyone who is using LCG that their trades made during news may not be safe from cancellation.
Basically his case is as follows:
Pending buy and stop orders were placed before the news time and these orders were accepted by your system and filled by you when the market moved during news. He appears to have followed this strategy for some time doing several successful trades. After about 2 weeks his account was disabled and all his news trades reversed. All this is clearly shown on his statement.
So I want to ask you why you would cancel these trades when you allow the placing of pending buy and sell stop orders? Why would you execute these trades and then declare them invalid? Since you have the ability to requote, slip or not fill the order, why would you give the client a fill and then on second thoughts decide that the price he received is incorrect and all this AFTER 2 WEEKS? And why would it be an incorrect price if for example he has placed a buy stop order on the pound at 1.6210 when the market was at 1.6200 and was then filled by LCG when the market suddenly rose to 1.6240?
Of course I wont mention this client's details nor do I expect you to do so but so that everybody may know that this case is genuine I will tell you that LCG final response to his complaint is an email dated 7th May 2011. Of course, his complaint was denied since you are investigating yourself, you inevitably found in your favour.
I think we would all be interested to hear your comments.
I have just been made aware by a friend who is using an outfit of London Capital Group other than Capital Spreads that he had several news trades reversed. He has shown me his statement as well as your final response to his complaint and I find it quite troubling.
So the question has to be asked as to whether there is a trend developing here where LCG is having a second look at trades done during the news time and cancelling and reversing those trades they don't like? This may have ramifications for anyone who is using LCG that their trades made during news may not be safe from cancellation.
Basically his case is as follows:
Pending buy and stop orders were placed before the news time and these orders were accepted by your system and filled by you when the market moved during news. He appears to have followed this strategy for some time doing several successful trades. After about 2 weeks his account was disabled and all his news trades reversed. All this is clearly shown on his statement.
So I want to ask you why you would cancel these trades when you allow the placing of pending buy and sell stop orders? Why would you execute these trades and then declare them invalid? Since you have the ability to requote, slip or not fill the order, why would you give the client a fill and then on second thoughts decide that the price he received is incorrect and all this AFTER 2 WEEKS? And why would it be an incorrect price if for example he has placed a buy stop order on the pound at 1.6210 when the market was at 1.6200 and was then filled by LCG when the market suddenly rose to 1.6240?
Of course I wont mention this client's details nor do I expect you to do so but so that everybody may know that this case is genuine I will tell you that LCG final response to his complaint is an email dated 7th May 2011. Of course, his complaint was denied since you are investigating yourself, you inevitably found in your favour.
I think we would all be interested to hear your comments.
capitalspreads
Experienced member
- Messages
- 1,452
- Likes
- 79
Pipstar
The client concerned is well aware of why we rejected his trades and he has NOT told you the full story.
And it WAS NOT JUST a matter of accepting orders over data releases and then going back over them at a later date. We have thousands of such orders every week if we acted as you are suggesting we would not have any clients ! When we discovered what he was doing we looked at his past actions and acted accordingly.
Sorry, but if he wants to raise this issue further and tell you all, truthfully, exactly what he was doing then he is quite welcome.
We come across this type of activity a couple of times a year. In the end we find it.
Simon
The client concerned is well aware of why we rejected his trades and he has NOT told you the full story.
And it WAS NOT JUST a matter of accepting orders over data releases and then going back over them at a later date. We have thousands of such orders every week if we acted as you are suggesting we would not have any clients ! When we discovered what he was doing we looked at his past actions and acted accordingly.
Sorry, but if he wants to raise this issue further and tell you all, truthfully, exactly what he was doing then he is quite welcome.
We come across this type of activity a couple of times a year. In the end we find it.
Simon
You'll have to tell me what I haven't thought about.
My comment about spreads (mainly re. FX and indices) is that if you're quoting, say, 1pt fixed on a market and the underlying spread increases to 10pt, your price will nearly always be 'wrong', either on one side or both sides, depending on whether it's derived from the mid point or the bid/offer, and whether a trade actually took place at a certain level. Therefore, there is a fundamental problem of your own making, yet you apparently have the luxury of reversing trades in retrospect, which is effectively a way of limiting your risk.
An extreme example of this was seen in the flash crash, when spreads were huge but 'real' trades didn't necessarily go through at anything near the quoted prices.
capitalspreads
Experienced member
- Messages
- 1,452
- Likes
- 79
ross
but if we quoted the full spread then everyone would get a worse price. If the underlying market in eur/usd is 1.4040-1.4050 how can you possibly argue that LCG quoting 1.4045-46 is somehow unfair.
When we reverse trades it is not because of this type of issue it is because of a total mis quote. i.e when the quote falls by a huge amount due to some issue like the bid (or offer) dropping out in its entirity or when a client is being shall we say "interestingly creative"
Oddly enough the flash crash was not as you describe it.. It was unique for the very fact that trades actually did go through on the extreme prices. And before anyone mentions it "No we did not execute clients on the ridiculous equity prices"
Simon
but if we quoted the full spread then everyone would get a worse price. If the underlying market in eur/usd is 1.4040-1.4050 how can you possibly argue that LCG quoting 1.4045-46 is somehow unfair.
When we reverse trades it is not because of this type of issue it is because of a total mis quote. i.e when the quote falls by a huge amount due to some issue like the bid (or offer) dropping out in its entirity or when a client is being shall we say "interestingly creative"
Oddly enough the flash crash was not as you describe it.. It was unique for the very fact that trades actually did go through on the extreme prices. And before anyone mentions it "No we did not execute clients on the ridiculous equity prices"
Simon
Well, it looks to me that he placed about half a dozen trades which were all reversed so when you say you looked at his past actions, the timeframe you are looking at and the number of trades involved is very small. I can't see that he was doing anything wrong. Buy and stop orders appear to have been placed, amended a few times and then filled during news. What's wrong with this strategy that the subsequent trade deserves to be cancelled? If there is any illegality to this may be you can tell us which rules were broken here? This is a strategy used with many brokers without problem, some give good fills and some slip so why is it that LCG are the only ones that cancel the trade?
If you look at previous posts I've said that fixed spread is generally one of the best things about SB, but you seem to be confirming my point.
<<if the underlying market in eur/usd is 1.4040-1.4050 how can you possibly argue that LCG quoting 1.4045-46 is somehow unfair. >>
Whether it's unfair or an error really depends on how you look at it. You've quoted the mid price using your system and that's what we have to trade on at the time. It could be a 'fair' price based on info available, but in retrospect it will also probably be a 'wrong' price in relation to the underlying real market.
For instance, in your example, what if the underlying EU price went from 1.4049-1.4050, to 1.4040-1.4050, and then back to 1.4049-1.4050 without trading lower than 1.4049? Your quote would QUITE CLEARLY be an error, so a trade could be incorrectly stopped out. How would the average punter be able to know the truth? Seems like a fundamental flaw to me.
Yes I agree, I am as you are interested to know the meaning of Simon's statement "interestingly creative".
Yes, Simon also states above that LCG don't cancel trades unless there is a misquote. The case I mention above there are no misquotes or off market prices. Therefore, his statement is far from the truth.
Also there is nothing 'interestingly creative' about placing buy and sell stop orders during news time. It's the oldest strategy used by traders. What is unethical is to fill these orders and then a week or two later cancel them because they were profitable and you dont like the strategy. We have not seen any reasonable explanation from him as to why his company did not pay this profit. I feel the trader was hardly done by and he should do something to redress this.
capitalspreads
Experienced member
- Messages
- 1,452
- Likes
- 79
ross
sorry but you are wrong.... if the real market went to 1.4040-1.4050 then everyone with a stop order between 1.4040 and 1.4050 would have their stops triggered and would be stopped out... sorry but this is the real world where things are a good deal nastier than in the SB world.
in the Capital Spreads "fixed spread" world anyone below 1.4045 would still have his/her position in place.
You must remember that in 'the real' world when a stop is triggered/activated it becomes a 'market order' and is just sold at the first available price. This is one of the reasons that you get sudden moves in markets when a big stop is triggered on an electronic exchange and just smashes down through any standing bids. (happened in Silver on Sunday night 1st May)
Simon
sorry but you are wrong.... if the real market went to 1.4040-1.4050 then everyone with a stop order between 1.4040 and 1.4050 would have their stops triggered and would be stopped out... sorry but this is the real world where things are a good deal nastier than in the SB world.
in the Capital Spreads "fixed spread" world anyone below 1.4045 would still have his/her position in place.
You must remember that in 'the real' world when a stop is triggered/activated it becomes a 'market order' and is just sold at the first available price. This is one of the reasons that you get sudden moves in markets when a big stop is triggered on an electronic exchange and just smashes down through any standing bids. (happened in Silver on Sunday night 1st May)
Simon
capitalspreads
Experienced member
- Messages
- 1,452
- Likes
- 79
pip star
as i have already mentioned this is not a matter of placing orders over data releases. We have no issue with clients doing this.. it is a perfectly reasonable trading style to adopt.
You are not reading my replies.
Simon
as i have already mentioned this is not a matter of placing orders over data releases. We have no issue with clients doing this.. it is a perfectly reasonable trading style to adopt.
You are not reading my replies.
Simon
I have read all your replies regarding this matter but you have not told us what this client did wrong to have his trades cancelled. If you have, please highlight it. Since you state it is a perfectly reasonable trading style, tell us what made you cancel the trades in question? He has showed me his statement, your final reply to his complaint and how he placed his trades by the means available on that particular platform. Nothing illegal or 'interestingly creative' about the whole thing. Is it that there is no reasonable explanation to your action as I thought all along? What bothers me is that this could well happen to me or anybody else trading with your company.
Post the statement and reply from LCG so the T2W community can be judge and jury, I get the impression we are only getting half the story from both sides.
Read original case per post #6581 on this thread. I would not post someone's else's statement on a forum and not even my own.
capitalspreads
Experienced member
- Messages
- 1,452
- Likes
- 79
unfortunately we are in the same situation re information.
All I can say is repeat what I have already said .."it was not a matter of reversing orders filled incorrectly after data release"...
but Hey! no one will believe me as i am merely the 'dodgy/bucketshop spread betting operator' with a scant thirty years of experience of sharp-end financial markets and having only operated in the Spread Betting arena for 11 years with 70,000 different clients
simon
All I can say is repeat what I have already said .."it was not a matter of reversing orders filled incorrectly after data release"...
but Hey! no one will believe me as i am merely the 'dodgy/bucketshop spread betting operator' with a scant thirty years of experience of sharp-end financial markets and having only operated in the Spread Betting arena for 11 years with 70,000 different clients
simon
Firstly, I didn't mention stops in the 'real' market (is there such a thing in FX?), but even if I had I think you'll find that stops aren't necessarily triggered that way using a pukka DMA platform. My comment was about SB pricing, using the example you gave, so please explain how/why I was wrong.
Well give us the gist of the LCG response?
You keep asking for Simon to explain why the trades were reversed but you've already got the bloody answer!! They must have said "we are reversing these trades because of x, y and z" so what was x, y and z?
He's already stated that "it was not a matter of reversing orders filled incorrectly after data release" so come on mate, fill us in on all the juicy goss? If it was simply a case of them reversing trades because your mate was profitbale, go to the FOS, win the case, come on here gloating and post a link to the ruling. Or, as I suspect, there's some alot more fishey going on......
