Crap Buddist
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<titter>
Best Thread Capital Spreads
oiltanker
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>>Does your platform have a facility that enables me to place trades in 2 directions without canceling out both trades?<<
buying a trade of the same value in the opposite direction gets you out. IG index have a force open feature that allows you to be in both ways on the same instrument.
One might try using a different contract to hedge e.g ftse rolling and ftse monthly. use the monthly as main bias and rolling as hedge?
buying a trade of the same value in the opposite direction gets you out. IG index have a force open feature that allows you to be in both ways on the same instrument.
One might try using a different contract to hedge e.g ftse rolling and ftse monthly. use the monthly as main bias and rolling as hedge?
arabianights
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Simon,
What kind of "noise filtering" do you use? There was (as usual) some blatent stop catching on the bund earlier - a high tick and then seven lots traded in well under a second - which any kind of noise filtering ought to have ignored...
What kind of "noise filtering" do you use? There was (as usual) some blatent stop catching on the bund earlier - a high tick and then seven lots traded in well under a second - which any kind of noise filtering ought to have ignored...
Still waiting for a response (from some-one authorised by the FSA) 6th August
---
Capital Spreads
Guillermo Lopez-Perez
Compliance Department
4th Floor, 12 Appold Street, London, EC2A 2AW
7 June 2008
Dear Mr Lopez-Perez,
Complaints against Capital Spreads (London Capital Group)
Summary
I am writing to complain about a number of matters relating to my trading account with Capital Spreads. The financial consequence for me, personally, appears to be the incorrect removal of thousands of pounds from my client funds account. The issues raised possibly affect all client accounts at Capital Spreads since it began trading approximately four years ago and the overall financial consequence could be measured in many hundreds of thousands of pounds.
1. Complaint about removal of funds from my client account without permission and failure to refund amounts when requested. Complaint about the lack of help offered in calculation of amounts taken incorrectly from my client funds account.
2. Complaint about failure to re-instate contract, closed in error, when requested.
3. Complaint about failure and refusal to provide transcripts or recordings of conversation requested in connection with complaint (or for use as evidence in legal proceedings).
4. Complaint about failure, generally, to close transactions promptly
5. Complaint about the failure to handle my complaints (above) properly, fairly and in accordance with FSA requirements and guidelines.
Background and History
I have actively traded on my financial spreadbetting account with Capital Spreads in recent months, particularly in March and April of 2008 and have had an account with the company for a number of years. There have been approximately one thousand transactions this year and the gross value can be measured in hundreds of thousands of pounds.
There were losses on the account and I took steps some months to identify if these were solely the result of my trading style or if, perhaps, some of the losses could be attributed to Capital Spreads. I carried out a detailed analysis of my account, began to closely check transaction details and carried out some trading in parallel with a newly opened account with a competitor.
By April I had identified a number of problems:
Transactions were being closed at an incorrect value.
Excessive delays in closing transactions were noted.
Contracts could not be opened with Capital Spreads but they could be opened with a competitor simultaneously.
Overnight financing charges appeared to be unrealistic and excessive.
April 2008
I first broached the subject of contract closures at incorrect values directly with Capital Spreads in April 2008 by telephoning Customer service department by asking for the close-out value for a particular transaction to be checked as it appeared to be wrong. I indicated that I had changed the “stop-level” just before the market moved to the point of my original level. I was advised that there did not seem to be a problem and that I was wrong in believing that there was an error. I was NOT advised of any known relevant defects with the Capital Spreads accounting system at this point in time. Unfortunately, I did not take a note of the name of the female who dealt with the matter or cannot provide details of the transaction at this point in time.
I have screen shots of trading transaction on 8 April and 18 April and thus any transactions on these dates might be disputed again in the light of subsequent matters. Probable transactions noted below.
8 April 11.53 etc Sell 30 GBPUSD
18 April 12.57 Sell 20 EURUSD
Wednesday 23 April 2008
I telephoned Customer Services at Capital Spreads and spoke to Jane Pasquali about the close-out price of a contract.
22 Apr 8.07:40 Sell 10 x GBPUSD Rolling Daily at 1.9740 GBP (1,000.00)
Subsequent correction.
22 Apr 8 9:16 Correction 200.00
Jane's initial response was that she had taken a “quick look at charts” and everything seemed to be in order. When pushed, the matter was referred to “the head dealer” who confirmed that it would be in order to refund GBP 200.00 My conversation was limited to contact with Jane and I did not speak to a dealer.
The explanation was that the stop had been edited by me within seconds of the original stop level of 1.9760. The contract was erroneously and automatically closed out (by the computer system, not manually by a dealer) at the revised figure.
It should be clear that from the outset I was aware of the actual cause of the problem and explained the issue to Customer Services when first telephoning. The initial incorrect and misleading response is in itself a serious problem.
I discussed the matter in some detail with Jane and made a point of establishing that amendments to the order were “time-stamped” so that the matter could be audited should the problem arise again. I did not consider that Jane was sufficiently competent to deal with the matter alone and asked her to specifically check with her seniors before confirming, again, that the time-stamping was recorded and clearly of use when examining stops which had been amended just seconds before transaction closure at the original level (prior to amendment). Jane confirmed that we would be in a position to audit results.
Thursday 24 April 2008
A similar problem of closure at an incorrect level occurred with a another contract.
24April 08 9:12 Sell GBPUSD Rolling Daily at 1.9680 GBP (2,580.00)
24 April 08 9:58 Correction GBP 300.00
Stop originally at 1.9710 and edited to 1.9680 seconds before original stop level hit and closed out in error at the amended level.
Again, I telephoned Customer Service at Capital Spreads.
The initial response by Cola Bamiro at Capital Spreads was that she had “a quick look” at the charts and everything seemed to be in order. When pushed, she referred to matter to a dealer. I requested, before she consulted her colleagues, that the contract be re-instated rather rather than just refunding the amount taken in error.
Cola returned to me with the offer of the refund and made no reference to my request to re-instate the contract.
I indicated that I was not satisfied with the response and and that I wished for the matter to be referred to some-one more senior., (i.e. a person more authority and knowledge) and also that the matter should be treated as a “complaint” under FSA terms.
I received a phone call from Sarah Howard-Williams and we discussed the matter again. I indicated clearly that there were likely to many instances of the problem on my account.
Her initial response was that I would have to write everything down in an email and leave them to look at the matter. I advised that, in my opinion, complaints did not have to be in writing and asked I was not going to be fobbed off by having the ball put back in my court. I indicated that there were numerous instances of the use of an incorrect close-out rate on my account and that I viewed the matter as very serious and that it was clearly of relevance to all other CS clients.
We closed the conversation with an agreement that Sarah would look into the matter and have conversations with Jane and Cola and get back to me. I indicated in particular that there was some uncertainty about the timing of the editing of the stop level – i.e. Before or after the stop was hit.
The following Monday, Sarah returned to me and indicated that she had discussed the matter with Simon Denham (a director with executive responsibilities and a competent understanding of Capital Spreads accounting procedures and the technical aspects of trading). Although Sarah had previously suggested that she might be able to have some-one at Capital Spreads analyse the transactions on my account, when time was available, over a period of months, this offer was no longer available . Apparently Simon Denham was fully aware of the exact nature of the defect in the Capital Spreads accounting system (as was Sarah). Simon Denham adopted the view that if I wrote to them with details they would look into the matter, item by item, but no attempt would be made by Capital Spreads to quantify the extent of the problem and to make the necessary refund of funds taken in error. This appears to a demonstrate a complete lack of understanding of the FSA guidelines for “treating customers fairly” and for the handling of complaints.
It should be pointed out here that a number of individuals at Capital Spreads are aware of the problem – Simon Denham, Sarah Howard-Williams, supposedly “the Head-Dealer,” also, as the problem appears only to lead to funds being “taken in error” and not “given in error”, the system engineer(s).
We moved to a point were it was quite clear that I would not be fobbed off and that she would be no longer able to help me as the matter was a complaint and this would have to be handled by the Compliance Department.
My telephone call was transferred to Guillermo Lopez-Perez, who, I believe, is head of compliance. We had a brief conversation in which I made clear my position again. His response was not dissimilar to that of Sarah Howard-Williams – the onus was put back on me to deal with the matter. I again stated clearly my position that I had raised a valid complaint and that I expected the matter to be dealt with properly and fairly by Capital Spreads and that the onus was on them to identify errors and make the appropriate refund.
I indicated that (as I had already identified specific errors on may account and had good reason to believe that there were many others and also that I had spoken at length with a number of his colleagues) and that I thought it would be sensible for him to communicate with them in order to establish the best way forward. Guillermo Lopez-Perez indicated that he would get back to me very quickly by telephone or email.
14th May 2008
I telephoned Sarah Howard-Williams and indicated that I had not had a response for two weeks or so. I also asked Sarah Howard-Williams to obtain recordings or transcripts of my conversations with her, Jane Pasquali and Cola Bamiro. I indicated that my particular interest was in the statements about time-stamping of order amendements.
15th May 2008
I telephoned Mr Lopez-Perez and explained that it was some time since I had heard anything. I asked for an update on the handling of my complaint. I indicated that I did not consider his response to be in line with FSA Complaints handling rules. (I would have expected a formal acknowledgement of the complaint, details of the person handling the complaint and a likely time-scale for resolution at the very least).
My conversation with Mr Lopez-Perez was unproductive as he had moved to a position where he seemed to limit his responsibility to the checking that Capital Spreads had complied with FSA rules and that he had no responsibility for processing the complaint. The actual complaint was seemingly no longer being handled by Customer Services Department or The Compliance Department. I indicated that I considered his behaviour and that of his colleagues to be disgraceful and that I did not think that I had been treated fairly.
I asked Mr Lopez-Perez if he would obtain a recording or transcript of my conversation with him. I also advised that I had also asked Sarah-Howard Williams for transcripts/recordings of my conversations with her (and others). I again asked if he would arrange for these to be made available in the context of my complaint. He indicated that he was unwilling to help with this matter. The conversation closed after I had confirmed that I would be putting my complaint into writing and expected it to be dealt with properly.
Friday 31 May 2008.
No further communication received from Capital Spreads by 6 June 2008. In effect, the 8 week time-scale for complaint handling has passed. I suggest that this problem of poor handling of complaints by Capital Spreads is widespread and warrants investigation by the FSA.
Conclusion
I have documented a number of complaints in this letter and have given sufficient information and cause for Capital Spreads to deal properly with the problems I have identified. Clearly, the return of amounts deducted in error from my client funds account has priority. I am happy to negotiate an overall solution which takes all complaints into account or we can deal with them one by one.
I am enclosing a short list of indicative transaction which should be investigated . The list represents a sample of dubious transactions and is NOT a comprehensive list of errors – regrettably we are going to find many more! My feeling is that a detailed audit of my account would be justified (either by Capital Spreads or at the expense of Capital Spreads) should this sample contain other instances of contract closure at an incorrect level. I believe that the number of errors identified is large enough to provide a statistically significant estimate of the overall extent of the problem. My estimate is that the refund duee will be in the region of GBP 5,000.00 (say 2% of the throughput on my account) but I accept that it could be higher or lower. I also formally draw your attention to the likelihood that similar errors will have occurred on my account in previous years and request that you take this point into account when considering your response to me.
I have set down, for the record, other complaints which have not been the discussed at length in my telephone conversations with customer services and should be grateful if you can advise me on how you propose to deal with them. In addition to this, should you fail to resolve these matters raised in this letter, please be advised that I will also dispute the overnight financing charges for rolling trades which I believe to be unfair/excessive.
Yours...
---
Capital Spreads
Guillermo Lopez-Perez
Compliance Department
4th Floor, 12 Appold Street, London, EC2A 2AW
7 June 2008
Dear Mr Lopez-Perez,
Complaints against Capital Spreads (London Capital Group)
Summary
I am writing to complain about a number of matters relating to my trading account with Capital Spreads. The financial consequence for me, personally, appears to be the incorrect removal of thousands of pounds from my client funds account. The issues raised possibly affect all client accounts at Capital Spreads since it began trading approximately four years ago and the overall financial consequence could be measured in many hundreds of thousands of pounds.
1. Complaint about removal of funds from my client account without permission and failure to refund amounts when requested. Complaint about the lack of help offered in calculation of amounts taken incorrectly from my client funds account.
2. Complaint about failure to re-instate contract, closed in error, when requested.
3. Complaint about failure and refusal to provide transcripts or recordings of conversation requested in connection with complaint (or for use as evidence in legal proceedings).
4. Complaint about failure, generally, to close transactions promptly
5. Complaint about the failure to handle my complaints (above) properly, fairly and in accordance with FSA requirements and guidelines.
Background and History
I have actively traded on my financial spreadbetting account with Capital Spreads in recent months, particularly in March and April of 2008 and have had an account with the company for a number of years. There have been approximately one thousand transactions this year and the gross value can be measured in hundreds of thousands of pounds.
There were losses on the account and I took steps some months to identify if these were solely the result of my trading style or if, perhaps, some of the losses could be attributed to Capital Spreads. I carried out a detailed analysis of my account, began to closely check transaction details and carried out some trading in parallel with a newly opened account with a competitor.
By April I had identified a number of problems:
Transactions were being closed at an incorrect value.
Excessive delays in closing transactions were noted.
Contracts could not be opened with Capital Spreads but they could be opened with a competitor simultaneously.
Overnight financing charges appeared to be unrealistic and excessive.
April 2008
I first broached the subject of contract closures at incorrect values directly with Capital Spreads in April 2008 by telephoning Customer service department by asking for the close-out value for a particular transaction to be checked as it appeared to be wrong. I indicated that I had changed the “stop-level” just before the market moved to the point of my original level. I was advised that there did not seem to be a problem and that I was wrong in believing that there was an error. I was NOT advised of any known relevant defects with the Capital Spreads accounting system at this point in time. Unfortunately, I did not take a note of the name of the female who dealt with the matter or cannot provide details of the transaction at this point in time.
I have screen shots of trading transaction on 8 April and 18 April and thus any transactions on these dates might be disputed again in the light of subsequent matters. Probable transactions noted below.
8 April 11.53 etc Sell 30 GBPUSD
18 April 12.57 Sell 20 EURUSD
Wednesday 23 April 2008
I telephoned Customer Services at Capital Spreads and spoke to Jane Pasquali about the close-out price of a contract.
22 Apr 8.07:40 Sell 10 x GBPUSD Rolling Daily at 1.9740 GBP (1,000.00)
Subsequent correction.
22 Apr 8 9:16 Correction 200.00
Jane's initial response was that she had taken a “quick look at charts” and everything seemed to be in order. When pushed, the matter was referred to “the head dealer” who confirmed that it would be in order to refund GBP 200.00 My conversation was limited to contact with Jane and I did not speak to a dealer.
The explanation was that the stop had been edited by me within seconds of the original stop level of 1.9760. The contract was erroneously and automatically closed out (by the computer system, not manually by a dealer) at the revised figure.
It should be clear that from the outset I was aware of the actual cause of the problem and explained the issue to Customer Services when first telephoning. The initial incorrect and misleading response is in itself a serious problem.
I discussed the matter in some detail with Jane and made a point of establishing that amendments to the order were “time-stamped” so that the matter could be audited should the problem arise again. I did not consider that Jane was sufficiently competent to deal with the matter alone and asked her to specifically check with her seniors before confirming, again, that the time-stamping was recorded and clearly of use when examining stops which had been amended just seconds before transaction closure at the original level (prior to amendment). Jane confirmed that we would be in a position to audit results.
Thursday 24 April 2008
A similar problem of closure at an incorrect level occurred with a another contract.
24April 08 9:12 Sell GBPUSD Rolling Daily at 1.9680 GBP (2,580.00)
24 April 08 9:58 Correction GBP 300.00
Stop originally at 1.9710 and edited to 1.9680 seconds before original stop level hit and closed out in error at the amended level.
Again, I telephoned Customer Service at Capital Spreads.
The initial response by Cola Bamiro at Capital Spreads was that she had “a quick look” at the charts and everything seemed to be in order. When pushed, she referred to matter to a dealer. I requested, before she consulted her colleagues, that the contract be re-instated rather rather than just refunding the amount taken in error.
Cola returned to me with the offer of the refund and made no reference to my request to re-instate the contract.
I indicated that I was not satisfied with the response and and that I wished for the matter to be referred to some-one more senior., (i.e. a person more authority and knowledge) and also that the matter should be treated as a “complaint” under FSA terms.
I received a phone call from Sarah Howard-Williams and we discussed the matter again. I indicated clearly that there were likely to many instances of the problem on my account.
Her initial response was that I would have to write everything down in an email and leave them to look at the matter. I advised that, in my opinion, complaints did not have to be in writing and asked I was not going to be fobbed off by having the ball put back in my court. I indicated that there were numerous instances of the use of an incorrect close-out rate on my account and that I viewed the matter as very serious and that it was clearly of relevance to all other CS clients.
We closed the conversation with an agreement that Sarah would look into the matter and have conversations with Jane and Cola and get back to me. I indicated in particular that there was some uncertainty about the timing of the editing of the stop level – i.e. Before or after the stop was hit.
The following Monday, Sarah returned to me and indicated that she had discussed the matter with Simon Denham (a director with executive responsibilities and a competent understanding of Capital Spreads accounting procedures and the technical aspects of trading). Although Sarah had previously suggested that she might be able to have some-one at Capital Spreads analyse the transactions on my account, when time was available, over a period of months, this offer was no longer available . Apparently Simon Denham was fully aware of the exact nature of the defect in the Capital Spreads accounting system (as was Sarah). Simon Denham adopted the view that if I wrote to them with details they would look into the matter, item by item, but no attempt would be made by Capital Spreads to quantify the extent of the problem and to make the necessary refund of funds taken in error. This appears to a demonstrate a complete lack of understanding of the FSA guidelines for “treating customers fairly” and for the handling of complaints.
It should be pointed out here that a number of individuals at Capital Spreads are aware of the problem – Simon Denham, Sarah Howard-Williams, supposedly “the Head-Dealer,” also, as the problem appears only to lead to funds being “taken in error” and not “given in error”, the system engineer(s).
We moved to a point were it was quite clear that I would not be fobbed off and that she would be no longer able to help me as the matter was a complaint and this would have to be handled by the Compliance Department.
My telephone call was transferred to Guillermo Lopez-Perez, who, I believe, is head of compliance. We had a brief conversation in which I made clear my position again. His response was not dissimilar to that of Sarah Howard-Williams – the onus was put back on me to deal with the matter. I again stated clearly my position that I had raised a valid complaint and that I expected the matter to be dealt with properly and fairly by Capital Spreads and that the onus was on them to identify errors and make the appropriate refund.
I indicated that (as I had already identified specific errors on may account and had good reason to believe that there were many others and also that I had spoken at length with a number of his colleagues) and that I thought it would be sensible for him to communicate with them in order to establish the best way forward. Guillermo Lopez-Perez indicated that he would get back to me very quickly by telephone or email.
14th May 2008
I telephoned Sarah Howard-Williams and indicated that I had not had a response for two weeks or so. I also asked Sarah Howard-Williams to obtain recordings or transcripts of my conversations with her, Jane Pasquali and Cola Bamiro. I indicated that my particular interest was in the statements about time-stamping of order amendements.
15th May 2008
I telephoned Mr Lopez-Perez and explained that it was some time since I had heard anything. I asked for an update on the handling of my complaint. I indicated that I did not consider his response to be in line with FSA Complaints handling rules. (I would have expected a formal acknowledgement of the complaint, details of the person handling the complaint and a likely time-scale for resolution at the very least).
My conversation with Mr Lopez-Perez was unproductive as he had moved to a position where he seemed to limit his responsibility to the checking that Capital Spreads had complied with FSA rules and that he had no responsibility for processing the complaint. The actual complaint was seemingly no longer being handled by Customer Services Department or The Compliance Department. I indicated that I considered his behaviour and that of his colleagues to be disgraceful and that I did not think that I had been treated fairly.
I asked Mr Lopez-Perez if he would obtain a recording or transcript of my conversation with him. I also advised that I had also asked Sarah-Howard Williams for transcripts/recordings of my conversations with her (and others). I again asked if he would arrange for these to be made available in the context of my complaint. He indicated that he was unwilling to help with this matter. The conversation closed after I had confirmed that I would be putting my complaint into writing and expected it to be dealt with properly.
Friday 31 May 2008.
No further communication received from Capital Spreads by 6 June 2008. In effect, the 8 week time-scale for complaint handling has passed. I suggest that this problem of poor handling of complaints by Capital Spreads is widespread and warrants investigation by the FSA.
Conclusion
I have documented a number of complaints in this letter and have given sufficient information and cause for Capital Spreads to deal properly with the problems I have identified. Clearly, the return of amounts deducted in error from my client funds account has priority. I am happy to negotiate an overall solution which takes all complaints into account or we can deal with them one by one.
I am enclosing a short list of indicative transaction which should be investigated . The list represents a sample of dubious transactions and is NOT a comprehensive list of errors – regrettably we are going to find many more! My feeling is that a detailed audit of my account would be justified (either by Capital Spreads or at the expense of Capital Spreads) should this sample contain other instances of contract closure at an incorrect level. I believe that the number of errors identified is large enough to provide a statistically significant estimate of the overall extent of the problem. My estimate is that the refund duee will be in the region of GBP 5,000.00 (say 2% of the throughput on my account) but I accept that it could be higher or lower. I also formally draw your attention to the likelihood that similar errors will have occurred on my account in previous years and request that you take this point into account when considering your response to me.
I have set down, for the record, other complaints which have not been the discussed at length in my telephone conversations with customer services and should be grateful if you can advise me on how you propose to deal with them. In addition to this, should you fail to resolve these matters raised in this letter, please be advised that I will also dispute the overnight financing charges for rolling trades which I believe to be unfair/excessive.
Yours...
Masquerade
Senior member
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Simon,
Can you introduce decimal values to place bets on so I could do £3.33/point etc.?
Can you introduce decimal values to place bets on so I could do £3.33/point etc.?
chilltrader
Experienced member
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I suggest please no one post anything on this thread until someone from Capital Spreads answers
ascon.
This is scary stuff. btw.. I too am interested in knowing about
"Overnight financing charges appeared to be unrealistic and excessive."
This one sounds familiar!!
ascon.
This is scary stuff. btw.. I too am interested in knowing about
"Overnight financing charges appeared to be unrealistic and excessive."
This one sounds familiar!!
Vorbis
Well-known member
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Regarding the incorrect Stops being processed, do you still have the E-mail confirmations with the time of the amendment ? This could then be compared with the time of the transaction.
I always save mine just in case there is a problem such as this.
I always save mine just in case there is a problem such as this.
Yes, I have all e-mail confirmations. I also began to take screen shots when I spotted the problem. It would be much easier for Capital Spreads to audit this than it would be for me - they must have a P/L for each transaction based on actual close-out value as opposed to stop level.
Tony
There are a number of things to consider with interest rates.
1. Simple interest versus Compound interest.
2. Deposit made by client - either through the specified margin or the "locked-in" margin when stops are place far back at some time in transaction.
3. Is the calculation correct or does it just appear to be correct because the numbers look right.
I could go on but at the end of the day the figures seem excessive when compared to those applied by IGIndex. To be fair, the IG interest calculations are not very transparrent - at least CS are upfront about the figures they are using.
Approach the problem from another angle - take the CS interst calculation - get an annual equivalent then work out the implied capital value of the contract based on what you think is a realist interst rate. The sums do just not add up for me.
Perhaps Mr Denham would like to disclose the net "interest" earned from rollovers as seen in his P/L accounts.
Phil Mibbutz
Experienced member
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Good luck with your claim, but something tells me that there will be 1001 get-out clauses for CS.
Quote:
Originally Posted by capitalspreads
grantx
you might as well say the same about any contract. But in reality if a client found an error going back to the biginning of our business (oct 03) we would adjust his account in his favour. As we have never had an instance of an error going back longer than a month or so I cannot actually say how long CS would consider a price error (in our favour) to be still in play but we would probably find it difficult to go back further than a few months or so. In reality the chances of us finding it get less and less.
You must remember that this is when there has been a very obvious price error (even the exchanges have them). It does not happen very often and when I have commented on them freely most 'independent' readers have seen my point. Unfortunately most of the time I am constrained by data protection from giving times/dates/trades etc to demonstrate any individual examples.
Although if a client were willing to give permission on this thread then I will happily do a full audited example.
We have a very, very good reputation for customer services, prices, robustness etc etc. We did a full survey of our clients last year and even we were surprised at how good the response was.
It is very easy to attack SB companies (we are never exactly going to be listed in the cuddlyiest companies of the world) but remember there are generally more than one side to every argument.
Ariel Communications
we commission Ariel to develop most of our applications (as they have done for many of the SB companies) but we run the systems and we are responsible for all of their functionality as it impacts our clients. They are not a regulated entity but aside from being our IT supplier we have no other interests in them. (i.e nobody at CS owns any portion of them).
Simon
--
I am impressed by your reassuring statement "Although if a client were willing to give permission on this thread then I will happily do a full audited example." and would like to see if you are actually prepared to keep to you word.
I believe that there are many instances on my account of contract closure at an incorrect rate and would be willing to give permission for publication here of a full audited example of some (or all!) of the transactions on my account.
Tony
-----------
I am repeating this post (of 4 July 2008) in case anyone thinks I have not given Mr Denham a fair opportunity to deal with my complaint
Originally Posted by capitalspreads
grantx
you might as well say the same about any contract. But in reality if a client found an error going back to the biginning of our business (oct 03) we would adjust his account in his favour. As we have never had an instance of an error going back longer than a month or so I cannot actually say how long CS would consider a price error (in our favour) to be still in play but we would probably find it difficult to go back further than a few months or so. In reality the chances of us finding it get less and less.
You must remember that this is when there has been a very obvious price error (even the exchanges have them). It does not happen very often and when I have commented on them freely most 'independent' readers have seen my point. Unfortunately most of the time I am constrained by data protection from giving times/dates/trades etc to demonstrate any individual examples.
Although if a client were willing to give permission on this thread then I will happily do a full audited example.
We have a very, very good reputation for customer services, prices, robustness etc etc. We did a full survey of our clients last year and even we were surprised at how good the response was.
It is very easy to attack SB companies (we are never exactly going to be listed in the cuddlyiest companies of the world) but remember there are generally more than one side to every argument.
Ariel Communications
we commission Ariel to develop most of our applications (as they have done for many of the SB companies) but we run the systems and we are responsible for all of their functionality as it impacts our clients. They are not a regulated entity but aside from being our IT supplier we have no other interests in them. (i.e nobody at CS owns any portion of them).
Simon
--
I am impressed by your reassuring statement "Although if a client were willing to give permission on this thread then I will happily do a full audited example." and would like to see if you are actually prepared to keep to you word.
I believe that there are many instances on my account of contract closure at an incorrect rate and would be willing to give permission for publication here of a full audited example of some (or all!) of the transactions on my account.
Tony
-----------
I am repeating this post (of 4 July 2008) in case anyone thinks I have not given Mr Denham a fair opportunity to deal with my complaint
I am hoping that my post will flush other other instances of failure by CS to deal properly with complaints. In which case there might be a call from the FSA and an instruction to take on board the burden of "treating customers fairly".
Tony
capitalspreads
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overnight charges
if you are long you get charged base rate plus 2pc (very reasonable against nearly all other SB companies) if you are short you get paid (!) base rate minus 2pc. These charges are on the full value of the bet. Clients should be reminded that a £1 bet on GBP/USD is the equivalent of taking out a position of around £19,200. (if the price at about 1.9200).
Currency charges take the second currency base rate minus the first currency base rate as the starting point. We have yet to have a single instance of a complaint that identifies any deviation from these defined charge levels. I get the impression that some people do not understand the actual value of the bets that they take! But please give an actual example (on this forum) rather than just "the charges seem excessive" then I could respond. It must be mentioned that the margin we require is far lower than everyone else (due to the stop policy) and the rolling charges extremely reasonable as well.
as an example if you sold £1 today in GBP/USD and it close at 1.9200 this evening you would be charged ((2%-5%)minus2%x19200/36500. -5%x19200/36500 = £2.63. If you borrowed £19200 for a full year from a bank you would not blink at being charged £959.95 per annum (2.63*365) why should you think it any different to effectively borrow it from Capital Spreads? We get charged in similar fashion when we hedge our positions in the open market. This is the reason why forward dated FX prices are so different from spot BECAUSE this interest rate factor is included. December GBP/USD is now at 1.9024 with rolling spot at 1.9205. The difference is not because more people think the price will fall between now and then it is just the differential between the Pound and Dollar interest rates
As for the complainant..after the error on his stop was made (his original stop was fairly hit but because he amended it whilst the computer was processing it the stop level went through on the amended price) he gave us a big list of deals which he wished us to look at and we did so and found no errors. He then decided to change tack and said effectively "thats now not enough, look at all the trades I have ever done...check them against the market at that exact time going back a year" (!)... having no further proof of any specific deal error he was now asking us to look at thousands of trades taking a staff member several weeks (at our cost) when he had had no complaint about them at the time. But then added "but I will accept £5K if you don't want to do this" ! He has the full time and sales data himself on his deal confirmations and deal history. If he can find a problem or has suspisions about an individual trade then present the proof and we will look at it.
As i stated in the past if a client has a specific problem with a trade then we will look at it. We will not go on some sort of fishing trip.
Compliance indicated that as far as Capital Spreads was concerned we had looked into the matter found no further errors on the original list of deals. Compliance also stated to him that unless he had a specific complaint then we considered the matter closed and we did not expect to make any further response. As the client has not written or phoned with a specific complaint since then we can hardly respond.
Simon
if you are long you get charged base rate plus 2pc (very reasonable against nearly all other SB companies) if you are short you get paid (!) base rate minus 2pc. These charges are on the full value of the bet. Clients should be reminded that a £1 bet on GBP/USD is the equivalent of taking out a position of around £19,200. (if the price at about 1.9200).
Currency charges take the second currency base rate minus the first currency base rate as the starting point. We have yet to have a single instance of a complaint that identifies any deviation from these defined charge levels. I get the impression that some people do not understand the actual value of the bets that they take! But please give an actual example (on this forum) rather than just "the charges seem excessive" then I could respond. It must be mentioned that the margin we require is far lower than everyone else (due to the stop policy) and the rolling charges extremely reasonable as well.
as an example if you sold £1 today in GBP/USD and it close at 1.9200 this evening you would be charged ((2%-5%)minus2%x19200/36500. -5%x19200/36500 = £2.63. If you borrowed £19200 for a full year from a bank you would not blink at being charged £959.95 per annum (2.63*365) why should you think it any different to effectively borrow it from Capital Spreads? We get charged in similar fashion when we hedge our positions in the open market. This is the reason why forward dated FX prices are so different from spot BECAUSE this interest rate factor is included. December GBP/USD is now at 1.9024 with rolling spot at 1.9205. The difference is not because more people think the price will fall between now and then it is just the differential between the Pound and Dollar interest rates
As for the complainant..after the error on his stop was made (his original stop was fairly hit but because he amended it whilst the computer was processing it the stop level went through on the amended price) he gave us a big list of deals which he wished us to look at and we did so and found no errors. He then decided to change tack and said effectively "thats now not enough, look at all the trades I have ever done...check them against the market at that exact time going back a year" (!)... having no further proof of any specific deal error he was now asking us to look at thousands of trades taking a staff member several weeks (at our cost) when he had had no complaint about them at the time. But then added "but I will accept £5K if you don't want to do this" ! He has the full time and sales data himself on his deal confirmations and deal history. If he can find a problem or has suspisions about an individual trade then present the proof and we will look at it.
As i stated in the past if a client has a specific problem with a trade then we will look at it. We will not go on some sort of fishing trip.
Compliance indicated that as far as Capital Spreads was concerned we had looked into the matter found no further errors on the original list of deals. Compliance also stated to him that unless he had a specific complaint then we considered the matter closed and we did not expect to make any further response. As the client has not written or phoned with a specific complaint since then we can hardly respond.
Simon
capitalspreads
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bharat
dividends will be credited/debited (for those who are short) the night before the ex-div date.
we are developing a multiple portfolio facility but it will not be available for a few months.
oil tanker
you cannot have an equal and opposite position in the same market (but you can open two accounts if you wish) you can go long one contract and then sell another contract with the same underlying market. (rolling FTSE.. daily FTSE future, Dec FTSE etc)
ianlee
as you would suspect this would be a very serious problem if it occured (and this thread would be full of it as well). If this happens please immediately call the dealers to get it sorted. Specific Order errors are very simple to check and whilst (of course) we are near to perfect (!) as with all markets accidents do happen.
Simon
dividends will be credited/debited (for those who are short) the night before the ex-div date.
we are developing a multiple portfolio facility but it will not be available for a few months.
oil tanker
you cannot have an equal and opposite position in the same market (but you can open two accounts if you wish) you can go long one contract and then sell another contract with the same underlying market. (rolling FTSE.. daily FTSE future, Dec FTSE etc)
ianlee
as you would suspect this would be a very serious problem if it occured (and this thread would be full of it as well). If this happens please immediately call the dealers to get it sorted. Specific Order errors are very simple to check and whilst (of course) we are near to perfect (!) as with all markets accidents do happen.
Simon
capitalspreads
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arabian knights
it might look like blatent stop catching to you but if you actually had your stop level at that price in the real market this would not change the fact that you would have been stopped out. 7 contracts is still 7 contracts. If a price had been bid/offered then our systems would give the same price indications. Sorry .. there is little we can do to change this as we must take our prices (where they are available) from the relevant exchange.
If you had a 'take profit' order you would expect us to honor the price movement so unfortunately a client would also have to accept the loss.
But if the price tick higher did not actually move the exchange price then the quote from CS would not be altered i.e the bund is trading higher and reaches 113.60-113.61, whether 113.61 traded or not our high quote would still be 113.59-113.62 it would only go higher if 113.61 went bid or the offer was completely taken out.
Simon
it might look like blatent stop catching to you but if you actually had your stop level at that price in the real market this would not change the fact that you would have been stopped out. 7 contracts is still 7 contracts. If a price had been bid/offered then our systems would give the same price indications. Sorry .. there is little we can do to change this as we must take our prices (where they are available) from the relevant exchange.
If you had a 'take profit' order you would expect us to honor the price movement so unfortunately a client would also have to accept the loss.
But if the price tick higher did not actually move the exchange price then the quote from CS would not be altered i.e the bund is trading higher and reaches 113.60-113.61, whether 113.61 traded or not our high quote would still be 113.59-113.62 it would only go higher if 113.61 went bid or the offer was completely taken out.
Simon
Thanks for the reply. I will deal with the matter of interest charges here and with the the handling of my complaint separately.
"Using your example: as an example if you sold £1 today in GBP/USD and it close at 1.9200 this evening you would be charged ((2%-5%)minus2%x19200/36500. -5%x19200/36500 = £2.63. If you borrowed £19200 for a full year from a bank you would not blink at being charged £959.95 per annum (2.63*365)"
Using your calculation I would make the following comments:
1. Capital Spreads is not a bank and does not pay interest on account balances - Why then should it feel free to behave like a bank and take a spread on the overnight positions, avoid the need to quote rates in APR terms and avoid being subject to millions of othe regulatory controls.
2. Your calculation does not include the minimum margin (£60 I believe for a GBPUSD contract)
3. Your calculation does not allow for the actual margin provided by the client on a contract by contract basis (as determined by the default or as specified by the client)
4. The calculation can further be distorted by the margin which is locked in when client sets stops far back back and then moves them closet to the market level.
In summary a client might have £20,000 in his account, roll over a £1 contract for a year and be charged £959.95 (or so) interest. Your calculation seems to be inaccurate and in some ways unfair. The APR might cause a few eyebrows to be raised - taking interest on a daily basis is not the same as taking it annually.
" I get the impression that some people do not understand the actual value of the bets that they take! But please give an actual example (on this forum) rather than just "the charges seem excessive" then I could respond."
I do think that we should stop the pretense that CS is hedging every individual position - you only need to hedge (if you choose to do so) and finance the net position. The actual interest cost and your method of calculation has no bearing on reality.
"we require is far lower than everyone else (due to the stop policy) and the rolling charges extremely reasonable as well."
You are very quick to claim that you are more competitive than your competitors but this can be very misleading. IGIndex have a total different method for rollovers of the daily contract - they close the contract and crystalize the loss or gain (resetting the margin the process. The calculation of interest is thus totally different.
Does this help you to understand why some clients think that your interest rates are excessive?
stevespray
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I bet if you were to lay out the actual calcs of the IG 'rollover method' then it wouldnt be too far away from the CS method. CS use a method of keeping the initial position open whilst chargiing interest seperately whilst IG choose to close and then reopen the position on each roll over - look closely at the respective close price and then compare this with the new opening price. The dervive their rolling charge by introducing differing levels at this point.
I would largely agree with Simon with regard to this matter; inexperienced clients under estimate the true financial value of position sizes be it shares or fx. What I would encourage (I'm bound to I'm a client!) is the payment of interest on an account balance. Also I've never really had a good explanation of why CS deduct 20% of a clients dividend payment on longs?
Steve.
capitalspreads
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my word, this is so wrong on so many levels that I hardly know where to begin
point 1 is just a complaint that we do not pay interest on client funds. I accept that this is a sore point for some clients but that is company policy and is unlikely to alter.
we do not remove the £60 margin from the £19,200 value of the position as it is so meaningless. This amount of margin requirement would make precisely 0.8p difference to the £2.63 rolling charge.
If we did not charge for positions then clients would merely sell the rolling GBP/USD and buy the December GBP/USD contract thus ensuring a guaranteed profit. You demonstrate your complete lack of knowledge about how margin trading works by this statement. If we got rid of Future expiring bets punters would just sell/buy with us and buy/sell with a competitor. As every single SB, CFD, FX, margin broker in the world charges for rolling trades/bets are you saying that they are all in a conspiracy together?
Again your knowledge of the markets is sadly lacking if you think that when you trade FX or any other product on margin that you can compare this to an annual interest cost. My example was exactly correct in that if you held a rolling bet open every day for 365 days that would be the charge. The charge is not compounded as we do not charge interest on interest it is merely charged on the value of the trade and so if GBP/USD remained exactly at 1.9200 and Base rates remained at 5pc for the UK and 2pc for the US then the annual charge would be exactly as I said at exactly 5pc.
I cannot comment on other companies calculation methods but i believe that if you actually calculated the interest rate cost from the close/open price then the number would not be significantly different to ours.
point 4 does not even make sense... the rolling charge makes no note of stops or margin used (as these have nothing to do with the total value at risk on the bet) it just looks at the value of the bet (stake times closing price).
your final point is also disengenuous ... you are suggesting that if we have a position that has another positon the other way round then we should not charge... what absolute b****cks.. so what do we say to the person who is short and expecting to be paid?? "oh sorry Mr Smith, Mr Jones was long so to be nice to him we are being nasty to you"
Simon
point 1 is just a complaint that we do not pay interest on client funds. I accept that this is a sore point for some clients but that is company policy and is unlikely to alter.
we do not remove the £60 margin from the £19,200 value of the position as it is so meaningless. This amount of margin requirement would make precisely 0.8p difference to the £2.63 rolling charge.
If we did not charge for positions then clients would merely sell the rolling GBP/USD and buy the December GBP/USD contract thus ensuring a guaranteed profit. You demonstrate your complete lack of knowledge about how margin trading works by this statement. If we got rid of Future expiring bets punters would just sell/buy with us and buy/sell with a competitor. As every single SB, CFD, FX, margin broker in the world charges for rolling trades/bets are you saying that they are all in a conspiracy together?
Again your knowledge of the markets is sadly lacking if you think that when you trade FX or any other product on margin that you can compare this to an annual interest cost. My example was exactly correct in that if you held a rolling bet open every day for 365 days that would be the charge. The charge is not compounded as we do not charge interest on interest it is merely charged on the value of the trade and so if GBP/USD remained exactly at 1.9200 and Base rates remained at 5pc for the UK and 2pc for the US then the annual charge would be exactly as I said at exactly 5pc.
I cannot comment on other companies calculation methods but i believe that if you actually calculated the interest rate cost from the close/open price then the number would not be significantly different to ours.
point 4 does not even make sense... the rolling charge makes no note of stops or margin used (as these have nothing to do with the total value at risk on the bet) it just looks at the value of the bet (stake times closing price).
your final point is also disengenuous ... you are suggesting that if we have a position that has another positon the other way round then we should not charge... what absolute b****cks.. so what do we say to the person who is short and expecting to be paid?? "oh sorry Mr Smith, Mr Jones was long so to be nice to him we are being nasty to you"
Simon
