Best Thread Capital Spreads

[gle101]

Ok so it depends on the products you trade and who you trade with but my commissions on my most heavily traded product are around 1/15th - 1/20th of a tick so its a total non-event. Afaik, IB are pretty good for retail commissions? If you are trading a lot of US commodities then your commission rates will soar but the bottom line is how many ticks are you making per average trade, if its high then SB, if not then DMA.

EG: Average Ticks Per Trade= 4, DMA spread=1, SB Spread=3. After the spread your average ticks per trade on DMA =3 and SB=1 so already you are better off with DMA (inc commissions) and paying Gordon his blood money. If your average ticks per trade is 20 then SB is much better as you'll have +17 ticks Vs +11.4 after-tax DMA.

I don't fully understand your point here. Do you, by this example, assume that DMA is less costly when it comes to short term trading? As I see it, this is not always the case. Of course, it depends on the instrument you are trading. I would, in fact, say that a very short term trade on the DMA is more expensive, compared to the narrowest spread traded on equivalent instrument on SB. On top of that, for DMA you have to pay tax as well. The actual cost for the spread is the same whether they are short term, or have a longer time frame. However, I do get your point that the spread does not play as important a role, on a trade with a longer average tick per trade. Please fill me in if I missed out on something important in your example.

 

[minx]

I wasn't referring to LT or ST trading, just the average ticks per trade. Although generally ST trading has smaller average wins and LT have larger wins.

 

[gle101]

fxscalper et al

price in market 1.9488/1.9490 price on zero spread 1.9489/1.9489 client trades selling £50 a point at 1.9689.... please tell me (without hoping that the market moves in my favour) how I can make a profit to run my business. Assuming no move in the market the client is sitting on a zero p/l immediately whilst I am sitting on a 1 pip loss. Answers on a postcard please.

And before anyone states that we have more losers than winners, I am afraid to say that I cannot run a financial business on that expectation.

Everyone goes on about 1 pip spreads on differing platforms but the point is that this 1 pip spread is caused by a multitude of market makers on the platform. RBS will quote 1.9485-1.9488 whilst Morgans are at 1.9486-1.9489 and UBS are at 1.9484-1.9487 etc etc etc... the net effect is that the spread is just 1 but the individual market makers are quoting 3 wide. We are in the position of being the individual market maker. The point here is that for individual market makers the price is 3 wide and they quote and trade on that basis.

Simon

The administration cost of running the SB company (i.e wages and platform) is quite heavy. So I don't really see the necessity of 0 point spread. We as traders want a tight spread, but at the same time we also depend on the company being stable financially. No 1 point spread is OK by me, as long as the execution and service are satisfactory.

 

[gle101]

Simon, have you checked with your technicians about the time out on the dealer ticket window? I am still being timed out after only 4 minutes. This is not very good service Simon. WS for example have no time out at all on their ticket window. I know, you have more traffic but you also have more resources. This is an important facility on the platform, and one should at least be given a lot more time before being timed out.

 

[moonwalker]

Is anyone able to quickly summise how CS hedge bets. I've dabbled a little with generally small trades. For example, recently I went short on Tesco and grabbed 11points over the course of a couple of days. Do CS mirror my trade? Absorb it? Just curious - particularly so in cases where price movement is fast . ta.

 

[minx]

Is anyone able to quickly summise how CS hedge bets. I've dabbled a little with generally small trades. For example, recently I went short on Tesco and grabbed 11points over the course of a couple of days. Do CS mirror my trade? Absorb it? Just curious - particularly so in cases where price movement is fast . ta.

How and if they hedge has been commented on by Simon in this thread already, prob more than once.... try reading previous posts or doing a search.

 

[bracke]

Capital Spreads

Am I correct in thinking that you do not offer 'open force'?

Regards

bracke

 

[capitalspreads]

bracke

what do you mean by 'open force'?

Simon

 

[The Pear]

Capital Spreads

Am I correct in thinking that you do not offer 'open force'?

Regards

bracke

Bracke - I think you mean Force Open.....to open a position without closing an existing position - can be useful if you are trading over different time zones. as far as I am aware CS do not and one other SB company does

 

[capitalspreads]

Bracke

if that is the definition then no we don't. You can trade in the same derived market but on different expiry dates but you cannot (in the same account) have a long and short position in the same contract. In reality opening equal and opposite positions is a bit silly. You will then be sitting on two positions one of which will be in a profit and the other in a loss. This encourages traders to then take the position that is in profit whilst running their loss. Something that I continually warn against in seminars and on this thread.

Just realise the profit/loss and then trade again at a later time/date. Remember ...any fool can take a profit ..it takes a trader to take a loss.

Simon

 

[minx]

Remember ...any fool can take a profit ..it takes a trader to take a loss.

Simon

I must be the greatest trader in the world in that case!! :cheesy:

 

[The Pear]

Bracke

if that is the definition then no we don't. You can trade in the same derived market but on different expiry dates but you cannot (in the same account) have a long and short position in the same contract. In reality opening equal and opposite positions is a bit silly. You will then be sitting on two positions one of which will be in a profit and the other in a loss. This encourages traders to then take the position that is in profit whilst running their loss. Something that I continually warn against in seminars and on this thread.

Just realise the profit/loss and then trade again at a later time/date. Remember ...any fool can take a profit ..it takes a trader to take a loss.

Simon

I knew stops were not just for buses!

 

[capitalspreads]

minx

yeh same as me.... I should put my personal trades up and encourage clients to take the opposite bet....I seem to be just about the ultimate reverse indicator...eeerrrr actually on second thoughts maybe I shouldn't !!!!!

Simon

 

[bracke]

Bracke

if that is the definition then no we don't. You can trade in the same derived market but on different expiry dates but you cannot (in the same account) have a long and short position in the same contract. In reality opening equal and opposite positions is a bit silly. You will then be sitting on two positions one of which will be in a profit and the other in a loss. This encourages traders to then take the position that is in profit whilst running their loss. Something that I continually warn against in seminars and on this thread.

Just realise the profit/loss and then trade again at a later time/date. Remember ...any fool can take a profit ..it takes a trader to take a loss.

Simon

Simon & The Pear

Thank you for your replies

The Pear - Yes you are correct I should have said Force Open.

Simon - I agree in general with your aversion to trades in opposite direction in the same instument and same expiry date but there is an exception, namely a straddle trade.

If you are expecting a large move but don't know in which direction place a trade in each direction and close the loser when the direction is known but you do need a guaranteed stop in both directions which I know CS do not offer and the expectation that the winning trade will cover the cost of the losing one. Yes it is a risky trade but if you know what you are doing it can be very useful.

Regards

bracke

 

[capitalspreads]

bracke

understood... simple answer.

I think I did comment on this earlier in this thread. I like the psycological angle as well, in that you can always punt with a winning bet on the book which keeps the confidence going and you can then try to trade the ranges. But it requires discipline as with all trading.

Simon

 

[pointdotfocus]

Can Anyone help please?
I'm new to day trading and trying to get to grips with it. Can anyone offer advice as to where to obtain the best overview as to what is occurring in the markets throughout the day. Due to limited finances I can't afford a professional news feed.
Bloomberg, both the website & LBC Radio I find rubbish and currently using Reuters Breaking City News web page. However I hoping to find a source that can provide a faster news update and better summary of the sentiments of the markets.

 

[pointdotfocus]

Can Anyone help please?
I'm new to day trading and trying to get to grips with it. Can anyone offer advice as to where to obtain the best overview as to what is occurring in the markets throughout the day. Due to limited finances I can't afford a professional news feed.
Bloomberg, both the website & LBC Radio I find rubbish and currently using Reuters Breaking City News web page. However I hoping to find a source that can provide a faster news update and better summary of the sentiments of the markets.

 

[RunTheNumbers]

London Capital Group results

SImon

I've just seen your latest results which show a very healthy level of growth. Congratulations.

Just one question. How much of the cash you show on the balance sheet is client funds? Shouldn't this be shown as linked to some sort of liability account?

Regards

Ben

 

[Jbat001]

Can Anyone help please?
I'm new to day trading and trying to get to grips with it. Can anyone offer advice as to where to obtain the best overview as to what is occurring in the markets throughout the day. Due to limited finances I can't afford a professional news feed.
Bloomberg, both the website & LBC Radio I find rubbish and currently using Reuters Breaking City News web page. However I hoping to find a source that can provide a faster news update and better summary of the sentiments of the markets.

Welcome, pointdotfocus. It's an interesting question, but one thing to perhaps think about is not getting *too* hung up on the news. Bloomberg will provide you with advance warning of the important stuff - interest rate announcements, CPI figures, trade balances and the like. If your technical analysis is reasonably decent, and you're aware of what is happening in the market, you'll likely be fine. Knowing every minute detail of every bit of news, and how it might relate to what you're seeing on the screen will confuse the hell out of you - it sure did me.

If you're looking to 'trade the news', again, the events that will likely precipitate movement large enough to get a decent profit from will be known about beforehand, in the most part.

The only other exceptions are 'force majeure' incidents like 9/11 or 7/7 where every market goes nuts, and emergency action is needed to secure your positions - but these cannot (obviously) be predicted. Add to that the fact that the market sometimes just behaves like an @rse regardless of where it should be going, and I feel you may be best getting the important news well diarised, TA'ing lots, and letting the market do its own thing!

 

[capitalspreads]

run the numbers

thanks

the cash on account is, as you say, mainly client funds .. evenly split between our FX and SB clients. I agree with you in that I think that (as the money is not ours) it should not be on the balance sheets. But aparently that would not be 'proper' accounting. The reverse is seen in 'Creditors due in one year'. I think the point is that the funds are effectively in our bank accounts (albeit in the client segregated accounts) and must therefore be accounted for.

Our actual cash in the bank (money belonging to us) position is around £3.5m which, after float costs came out of the numbers at the end of 2005, shows an improvement of around 2.5m on the year(we have already paid three quarters of corporation tax for the year). You will all be pleased to hear that although SB is tax free for our clients unfortunately it isn't for us!!

Simon