Best Thread Capital Spreads
arabianights
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capitalspreads
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Base rates charging
We are talking about the 'over night rate' not how much someone might give you for holding your money for a year.
If our rate is higher then people with 'long' positions will be charged more and, yes, short positions will get more. What one client loses with one hand another client gains with the other.
The Base rate has been our unit for five years and is not controllable by us in any way shape or form. In general clients are overall long of markets (equities, indices, commodities etc) so sticking with base rates rather than a flexible Libor rate has actually benefitted our clients in the long run. If we started to fiddle around with our charging rates we could be accused of moving it to benefit ourselves. It is easier and fairer just to stick with a verifiable number.
Simon
We are talking about the 'over night rate' not how much someone might give you for holding your money for a year.
If our rate is higher then people with 'long' positions will be charged more and, yes, short positions will get more. What one client loses with one hand another client gains with the other.
The Base rate has been our unit for five years and is not controllable by us in any way shape or form. In general clients are overall long of markets (equities, indices, commodities etc) so sticking with base rates rather than a flexible Libor rate has actually benefitted our clients in the long run. If we started to fiddle around with our charging rates we could be accused of moving it to benefit ourselves. It is easier and fairer just to stick with a verifiable number.
Simon
stevespray
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Simon...
Just a quick one if I could??
This morning one of your dealers (pre market FTSE again Im afraid!) refused a deal from me, not because the price had moved, but because I already had a position in the market.
I got a message something along the lines of "Deal Refused - Max Position Reached". Now, after I got the message I checked the available margin and the NTR's and cannot find a reason for such a message of refusal?? (In fact I've double and treble checked.)
So my question is this - Are dealers now allowed to interupt clients trading if they feel that a client is betting on a particular move or outcome? This appears a complete change of policy on CS's part since I've had far larger positions open before. Moreover I feel that this is not a fair market practice since, if the price is correct and the client has the correct margin requirement, then surely the dealing staff cannot step in to block a trade when your relationship with your client is 'execution only'??
Steve.
Just a quick one if I could??
This morning one of your dealers (pre market FTSE again Im afraid!) refused a deal from me, not because the price had moved, but because I already had a position in the market.
I got a message something along the lines of "Deal Refused - Max Position Reached". Now, after I got the message I checked the available margin and the NTR's and cannot find a reason for such a message of refusal?? (In fact I've double and treble checked.)
So my question is this - Are dealers now allowed to interupt clients trading if they feel that a client is betting on a particular move or outcome? This appears a complete change of policy on CS's part since I've had far larger positions open before. Moreover I feel that this is not a fair market practice since, if the price is correct and the client has the correct margin requirement, then surely the dealing staff cannot step in to block a trade when your relationship with your client is 'execution only'??
Steve.
tar
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maybe the max stake for FTSE100 premarket different
stevespray
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tar
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4 !!!
stevespray
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arabianights
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Why not just do 4 contracts in the real market? No one will give a **** about it.
arabianights
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cos ya can't do it pre-open can you. leave your brain atr home today mate?
Nope, but been down pub and come back to get out of the final 3 lots of my luvverly jubbly swiss spread for a few ticks profit by legging out.
That said trading performance in general today has been suggestive of a no brain. Still got 200 ticks though somehow.
arabianights
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take the 3 lots bid at 11 on sep swiss out first, there's a good chap
arabianights
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damn. at least I get the honour of last trade of teh day.
trader_dante
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Something I don't understand is how can CS (and other SB brokers) justify an 8 point spread on FX Futures when the underlying market spread is 1.
You could go to the CME and trade a 1 lot in GBP/USD (£3 a tick) and pay a couple of quid in commissions/exchange fees or you could do it with CS and pay an extra 7 points spread or basically £17.50 extra EVERY SINGLE time you trade!!!
You could go to the CME and trade a 1 lot in GBP/USD (£3 a tick) and pay a couple of quid in commissions/exchange fees or you could do it with CS and pay an extra 7 points spread or basically £17.50 extra EVERY SINGLE time you trade!!!
stevespray
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I'm guessing that it comes down to fairly simple math. Most of, if not all, the SB firms make a nice profit on the rolling fx spots with the interest charges made during the 'roll' between sessions. The future currency markets arent so profitable for them because there is no window for them to make the extra interest charges because there is no rollover - instead the interest charge is built into future itself and slowly decays as time passes. This means that the firms make their 'bit extra' by increasing the spread on the futures markets. My feeling is that most of the firms work a trick on this interest business. Take stock positions for example - the firms say that you must put a deposit down for an equity position. Say you provide a 10% deposit on a £50,000 stock position - thats £5,000 down - check your statement and you'll see that they charge you interest on the whole position and not just the remainder?? Theoretically they should only charge interest on the value of the stock which you are borrowing after the deposit is considered. You wouldnt buy a car for £30k, stick £10k down, and then pay interest on the finance agreement based on borrowing £30k now would you? You'd pay interest based on the principle outstanding.
Steve.
I agree it sounds steep but we need to bear in mind that a SB spread differs from a market spread in the sense there is not a buyer for every seller, but rather the bettor and the house, I'd assume they need a little slack to hedge all bets on the real market.
That spread will be where they make their profit, as competition and also users increase we should eventually see these decline.
The amount placed therefore determines the commission paid, IE a bet of £1 will pay far less commission than a bet of £5, therefore I believe SB works best with smaller stakes (which is all I use for now). Those with big money are far better off going DMA.
capitalspreads
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fx futures
the problem with FX futures is that the volumes have an alarming habit of 'drying up'. And the forward interest rate component changes quite dramatically on a day by day. The vast majority of trades go through on spot or on forward spot. We charge 2% rolling fee spread around the base rate differential on spot which is very good for a spread betting company.
Rolling Equity charges... it all sounds great when you say 5k vs 50k to say why dont we charge just on the 45k but all client funds must be held in segregated accounts. CS must use its own funds to hedge positions. Clients get charged varying margin rates (against stop levels) down to a minimum of just 3% whereas CS must put up at least 12% rising to 30% (even on FTSE 100 stock). All these factors come into play.
In todays markets 'big money' has its problems. We accept £100 a point on the FTSE, in hours, as a matter of course but, for those of you who actually watch the FTSE future will know, ten contracts are seldom available nowadays on a 1 pip spread.
In oil we quote brent 5 pips wide but the 'real market' is hardly ever this tight (frequently it is up to 25 pips wide and volumes are pathetic).
out of hours FTSE rejection. Dealers of any SB company can reject trades for many reasons. Just because you have never experienced this rejection before does not mean that it will never happen and frankly I feel reflects well on us that we have always stepped up to the plate in the past no matter what was going on. £40 may not sound like much but if your book is already something like £2000/point (pre market) with no hedge available and the client in question already has a large exposure then you can understand why we may have rejected any further increase in risk.
Simon
the problem with FX futures is that the volumes have an alarming habit of 'drying up'. And the forward interest rate component changes quite dramatically on a day by day. The vast majority of trades go through on spot or on forward spot. We charge 2% rolling fee spread around the base rate differential on spot which is very good for a spread betting company.
Rolling Equity charges... it all sounds great when you say 5k vs 50k to say why dont we charge just on the 45k but all client funds must be held in segregated accounts. CS must use its own funds to hedge positions. Clients get charged varying margin rates (against stop levels) down to a minimum of just 3% whereas CS must put up at least 12% rising to 30% (even on FTSE 100 stock). All these factors come into play.
In todays markets 'big money' has its problems. We accept £100 a point on the FTSE, in hours, as a matter of course but, for those of you who actually watch the FTSE future will know, ten contracts are seldom available nowadays on a 1 pip spread.
In oil we quote brent 5 pips wide but the 'real market' is hardly ever this tight (frequently it is up to 25 pips wide and volumes are pathetic).
out of hours FTSE rejection. Dealers of any SB company can reject trades for many reasons. Just because you have never experienced this rejection before does not mean that it will never happen and frankly I feel reflects well on us that we have always stepped up to the plate in the past no matter what was going on. £40 may not sound like much but if your book is already something like £2000/point (pre market) with no hedge available and the client in question already has a large exposure then you can understand why we may have rejected any further increase in risk.
Simon
davecrom01
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dave crom
what a load of ********.. the time delay was nothing other than a new development that caused a locking on deal acceptance. All the deals were still accepted etc .. it just took longer for the computers to process and the confirms to come through. This has been remedied and no client was disadvantaged in any way.
Simon
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Simon, what a load of ****** ? At last we agree on a phrase to describe your clunky platform! Congratulation, so glad you've seen the light.
So its another "technical improvement" that caused problems?
My God, after so many "improvments" you should have the slickest system around - pity it's still close to being (although not quite) the clunkiest piece of junk out there.
what a load of ********.. the time delay was nothing other than a new development that caused a locking on deal acceptance. All the deals were still accepted etc .. it just took longer for the computers to process and the confirms to come through. This has been remedied and no client was disadvantaged in any way.
Simon
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Simon, what a load of ****** ? At last we agree on a phrase to describe your clunky platform! Congratulation, so glad you've seen the light.
So its another "technical improvement" that caused problems?
My God, after so many "improvments" you should have the slickest system around - pity it's still close to being (although not quite) the clunkiest piece of junk out there.
