Best Thread CMC Markets owner answers your questions

[PC at CMC Markets]

play the markets not the spreads

Hi Tar,

Look I told you we pass on the latest price to every client. If the latest price improves before you are executed we give it to you. cannot be clearer than that. regardless of whether we are hedging or not.

But I think that the point here is the intent of the company offering a mis leading service. (I am not referring to fxcm here) just generalising. you have to ask youself that if any company gets fined by it's regulator why is that.
you tell me.....

pc

If you want to make a full comparison with Fxcm's situation the question should be Mr Peter if you get a better price while (if) you hedge your client position do you pass this to your client . This what Fxcm do now after Aug 2010 they pass everything to the client , b4 that date Fxcm gave positive slippage based on the platform prices only but when Fxcm get a better price on the hedging process they didn't pass everything now they changed this after Aug 2010 .
So Peter : If you get a better price when ( If ) you hedge your client's position do you pass this to your client ? Thanks .

 

[tar]

Re: play the markets not the spreads

Hi Tar,

Look I told you we pass on the latest price to every client. If the latest price improves before you are executed we give it to you. cannot be clearer than that. regardless of whether we are hedging or not.

But I think that the point here is the intent of the company offering a mis leading service. (I am not referring to fxcm here) just generalising. you have to ask youself that if any company gets fined by it's regulator why is that.
you tell me.....

pc

I get your policy regarding platform prices you were clear , now i have a different question : If you get a better price when you hedge your client position do you pass this to your client ?

 

[PC at CMC Markets]

Re: play the markets not the spreads

Hi Tar,

I think we are getting off the point here. Our execution policy is completely clear.
Also we do not operate a brokerage service and cannot because spread betting there is no such thing and also two thirds of bets are below marketable amounts.

What is relevant is why a company would get fined by it's regulator. normally that is because you say one thing and do another, unless you know another reason.

tks pc

I get your policy regarding platform prices you were clear , now i have a different question : If you get a better price when you hedge your client position do you pass this to your client ?

 

[tar]

Re: play the markets not the spreads

Hi Tar,

I think we are getting off the point here. Our execution policy is completely clear.
Also we do not operate a brokerage service and cannot because spread betting there is no such thing and also two thirds of bets are below marketable amounts.

What is relevant is why a company would get fined by it's regulator. normally that is because you say one thing and do another, unless you know another reason.

tks pc

Peter , i am not asking if you hedge every client i know you don't in fact you cant i know this , but if/when you hedge your client position lets say it is 500p/p and you decided to hedge his position , if you get a better price do you pass this to your client ? honest question i want transparency .

Thanks

 

[PC at CMC Markets]

Re: play the markets not the spreads

hi tar,

you keep disturbing my holiday but no worries I will answer your question.

every price we quote is for a size (you can source this information via our demo platform or web page) so every quote you can trade on for upto that size. For example on Eur/USd it is up to £300 per point, on FTSE it is £100 per point. That is so we can quote you without requotes, automate the process and execute the trade quickly.
If you want to open bigger bet you have to do multiple trades. This whole process is fully automated without dealer intervention.

Every single trade we do whether it is on next gen or via a telephone sales trader they all go into the system at the price we are quoting on next gen platform. for example, a sales trader on a telephone deal cannot read you for a couple of pips because they can only put the trade into the clients account via trading on the platform and no dealer can manipulate the price to disadvantage a client.

once we receive the trade into the hedge algorhithm it is all netted off.
so if you buy say vodfone at £100 pp and we are long ftse 100 we will port folio
hedge that position and offset the share risk against our ftse risk. We may also hedge the share deal with a future ftse contract.

This is an efficient use of our vast book of business and it allows us to be more efficient with hedging and it allows us to quote tight market spreads and offer a competitive service to our clients. Every quote we offer is based on the latest market price, not our position and all we want are flows.

There might be occasions when we straight through process the trade and we may make or we may lose on that trade but we do not skim the trade to disadvantage the client. that is the point. we always quote the market, efficiently hedge the business but we always give the client the latest price whether it is better or worst than the published price. The whole point here is whether we are set up to skim clients and we are not.

so now would you please answer my question why would a regulator fine a firm, especially a substantial amount of money......

pc

Peter , i am not asking if you hedge every client i know you don't in fact you cant i know this , but if/when you hedge your client position lets say it is 500p/p and you decided to hedge his position , if you get a better price do you pass this to your client ? honest question i want transparency .

Thanks

 

[tar]

Re: play the markets not the spreads

There might be occasions when we straight through process the trade and we may make or we may lose on that trade but we do not skim the trade to disadvantage the client. that is the point. we always quote the market, efficiently hedge the business but we always give the client the latest price whether it is better or worst than the published price. The whole point here is whether we are set up to skim clients and we are not.

Thanks Peter , to make it clear : so if you get a better price when you forward your client position to the market you pass this to your client ?

 

[tar]

Re: play the markets not the spreads

so now would you please answer my question why would a regulator fine a firm, especially a substantial amount of money......

pc

why i have to answer this question ? i am not Fxcm rep and i don't care you can go to Fxcm thread and ask them if you want . If you ask me i prefer transparent exchange trading but i do like and trade CFDs and forex .

 

[tar]

Re: play the markets not the spreads

hi tar,

you keep disturbing my holiday but no worries I will answer your question.

Thanks for your time PC

 

[PC at CMC Markets]

Re: play the markets not the spreads

hi tar,
I asked you this question because in your first posting you seem to be saying that they did something and now they have changed. You seemed to be defending them but maybe I misread your posting. so I simply asked you that if all was fine and they changed why did they get such a big fine. sorry if I mis interpreted your posting.

have no interest in going to their thread. I know the answer I read the NFA report.

tks peter

why i have to answer this question ? i am not Fxcm rep and i don't care you can go to Fxcm thread and ask them if you want . If you ask me i prefer transparent exchange trading but i do like and trade CFDs and forex .

 

[PC at CMC Markets]

Re: play the markets not the spreads

my pleasure.

Thanks for your time PC

 

[PC at CMC Markets]

Re: play the markets not the spreads

hi tar,
if we forward client positions to exchanges or to banks we have a system called auto-dealer. when we switch on auto dealer (by product) whatever the execution price from the bank or exchange, that is the price we pass onto our clients, we do not take anything for ourselves. i say it again, we have no process in place to skim client orders. Other orders that are not sent directly to an exchange or bank I have explained in my previous postings.

hope that is clear for you now.

tks for your postings and your time.
regards Peter

Thanks Peter , to make it clear : so if you get a better price when you forward your client position to the market you pass this to your client ?

 

[PC at CMC Markets]

hi ross,
not by us it's not.
pc

IMO the 'slippage' in spreadbet is mostly artificial, controlled by the platform software.

 

[tar]

Re: play the markets not the spreads

hi tar,
if we forward client positions to exchanges or to banks we have a system called auto-dealer. when we switch on auto dealer (by product) whatever the execution price from the bank or exchange, that is the price we pass onto our clients, we do not take anything for ourselves. i say it again, we have no process in place to skim client orders. Other orders that are not sent directly to an exchange or bank I have explained in my previous postings.

hope that is clear for you now.

tks for your postings and your time.
regards Peter

Thanks for your clear answer i respect that ...

 

[tar]

Re: play the markets not the spreads

hi tar,
I asked you this question because in your first posting you seem to be saying that they did something and now they have changed. You seemed to be defending them but maybe I misread your posting. so I simply asked you that if all was fine and they changed why did they get such a big fine. sorry if I mis interpreted your posting.

have no interest in going to their thread. I know the answer I read the NFA report.

tks peter

Professionals look at it differently , ok so they were fined , most banks were fined and most reputable companies as well , Fxcm introduced improved pricing ( positive slippage ) only last year , they are fined for the unpaid positive slippage b4 that the fine is under "failing to treat all customers equally" . Ofcourse that is a good news ! , investors think like this : what ? that's it , the NDD system works fine , all trades were hedged and passed to major US banks , no dodgy play with negative slippage , only some unpaid improved prices on old trades ? that's great , the stock didn't stop , yesterday up 8% today up 6% !!! as for me i don't care only one of my brokers .

 

[Ross Spur]

hi ross,
not by us it's not.
pc

I accept that, PC. In this respect Next Gen should be a significant step forward for spreadbetting when the updates go through.

 

[PC at CMC Markets]

Hi Ross,
already is, updates just building on what we have.
regards Peter

I accept that, PC. In this respect Next Gen should be a significant step forward for spreadbetting when the updates go through.

 

[PC at CMC Markets]

Re: play the markets not the spreads

hi tar,
well I did read it affected 40,000 liquidated clients, if you were one of those clients you might have a different view.

pc

Professionals look at it differently , ok so they were fined , most banks were fined and most reputable companies as well , Fxcm introduced improved pricing ( positive slippage ) only last year , they are fined for the unpaid positive slippage b4 that the fine is under "failing to treat all customers equally" . Ofcourse that is a good news ! , investors think like this : what ? that's it , the NDD system works fine , all trades were hedged and passed to major US banks , no dodgy play with negative slippage , only some unpaid improved prices on old trades ? that's great , the stock didn't stop , yesterday up 8% today up 6% !!! as for me i don't care only one of my brokers .

 

[tar]

Re: play the markets not the spreads

hi tar,
well I did read it affected 40,000 liquidated clients, if you were one of those clients you might have a different view.

pc

There is nothing mentioned in the NFA report regarding that , how positive slippage paid/or not paid effect that , anyway Fxcm will compensate and pay the unpaid positive slippage according to the NFA fine .

 

[PC at CMC Markets]

Re: play the markets not the spreads

hi tar,

you seem to be quite a fan of theirs. I have no experience of the service they offer and so hard to comment but you seem to be down playing the whole affair. If you read the reports you will find the information.

anyway obviously regulators found it serious as $2million is quite a sum of money.
I think we should forget this subject now and move on.

thanks Peter

There is nothing mentioned in the NFA report regarding that , how positive slippage paid/or not paid effect that , anyway Fxcm will compensate and pay the unpaid positive slippage according to the NFA fine .

 

[tar]

Re: play the markets not the spreads

hi tar,

you seem to be quite a fan of theirs. I have no experience of the service they offer and so hard to comment but you seem to be down playing the whole affair. If you read the reports you will find the information.

anyway obviously regulators found it serious as $2million is quite a sum of money.
I think we should forget this subject now and move on.

thanks Peter

lol Peter I was accused of being a fan of fxcm , IG , Oanda employee ! , i agree it is not a good business practice hope they improve ...

what about CMC , were you fined by the FSA or any other reg bodies in the UK ?