Best Thread CMC Markets owner answers your questions

[Earthling]

Hello Peter

Regarding using Marketmaker to trade CFD's on the ASX - I would like to see it be able to accept a limit order, with an attached if-done OCO order. At the moment, it will only accept either an if-done limit OR an if-done stop order. I'd like to be able to place a limit order, and if its filled, I'd like to have an OCO stoploss AND a profit stop in place. At the moment I have to watch for an order to be filled (with my if-done stop loss attached) before I can put my profit stop in.

I might be over-explaining, I do this because the technical support people, when they finally realised what I was asking, seemed to think its a preposterous idea.

Have a good day

 

[PC at CMC Markets]

Hi Ross My pleasure and welcome to the club
peter

Yes, you're right. I've seen the light and I now think next gen charts are exactly what I need. Thanks for pointing out the error of my ways.

 

[PC at CMC Markets]

Hi Earthling,

You are right I am afraid on market maker you cannot attach orders and place oco as you described. that is why we launched next gen technology. Next gen cfd launch is coming very soon, in days not weeks or months and you will be able to do the orders you described all on next gen.

thanks peter

Hello Peter

Regarding using Marketmaker to trade CFD's on the ASX - I would like to see it be able to accept a limit order, with an attached if-done OCO order. At the moment, it will only accept either an if-done limit OR an if-done stop order. I'd like to be able to place a limit order, and if its filled, I'd like to have an OCO stoploss AND a profit stop in place. At the moment I have to watch for an order to be filled (with my if-done stop loss attached) before I can put my profit stop in.

I might be over-explaining, I do this because the technical support people, when they finally realised what I was asking, seemed to think its a preposterous idea.

Have a good day

 

[PC at CMC Markets]

Hi peakoil

I have never understood why it is important for spread betters to bet on quarterly bets when all a quarterly bet is, is the cash price plus the cost of carriage for 90 days (decreasing as you get nearer the date).
The only technical difference between our cash bets and a quarterly bet is that with our cash price we quote the cash price and the cost of carriage is added daily (if you keep it over night) and you can keep the bet open indefinitely, just day by day. With a quarterly bet the cost of carriage is rolled up into the price and when the bet expires you roll it over for another quarter if you want to keep it open. Remember the futures price is TODAY'S CASH PRICE PLUS/MINUS THE COST OF CARRIAGE.
Can you tell me why it is important to you to want to bet quarterly and not cash
because I cannot see any technical reason why you would want to do this unless you wanted to play the interest rate/cost of carriage yield curve and then I suspect you wouldnt do this on cfd or spread bet contract but you would need to go through physical and interest rate swaps.

peter

Good day Mr. Cruddas, it's been a while since I was one of those who expressed concern about Maketmaker's being closed. Still, I hope you are keeping well.

However, I could hardly believe my eyes when I read CMC's latest "weekly review". So, in disbelief, I re-read it... and same once again.

I am sorry to admit, that cash only bets (+ daily financing charges) while you're withdrawing all futures bets on Brent & Nymex crude as of 18th of March, on *any* of your platforms, is definitely not my idea of good news. It's almost impossible to believe that you're removing all crude futures bets. Before drowning my sorrows, in a barrel of the black stuff (Guinness of course), I just called one of your competitors who definitely confirmed that they will be continuing to offer the front month futures contract *and* the daily on crude. I also got the impression that my query as to whether they will be continuing to offer future contracts was a most welcome one...

I'm just wondering, if sufficient numbers of people express dissatisfaction with being restricted to daily cash bets only re the products that you're withdrawing, would you be at all open to re-considering their removal, in the not too distant future?

Thank you.

 

[PC at CMC Markets]

to all my fellow posters. many thanks for not giving me a hard time over the Arsenal V Birmingham results. I had a bad day yesterday suffering in the company with all the big grins from Tottenham and Man Utd and Chelsea supporters. However, I am recovering now and we are are on a mega run.
We beat the mighty Barca, we drew with the might Leyton Orient away from home and we almost beat the mighty Birmingham City. Not bad eh..... boo hoo boo hoo

 

[PC at CMC Markets]

Hi Mike

Many thanks for your posting but I am still surprised why you need to trade quarterly bets over cash bets when technically they are the same. See my response to peakoil. Before you close your account and move over to some body can you explain to me why this is important . we have spent a lot of time on rolling cash commodities, have to say they are our most popular product on next gen platform . we have an in house team of quants that have developed this product.

We believe it is better for clients in trading commodities in that you only pay cost of carriage on a daily basis and not on a quarterly basis and as the bet is carried over daily there is no close out closing spread, unlike when a quarterly bet expires. Also you are wrong in saying that we are not concentrating on spreads because if you compare our commodity spreads to others I think you will find we are the tightest.

look forward to your response.
regards Peter

Hi

I agree with Peakoil, I was very surprised to see that crude futures will not be offered if I interpretted the weekly update correctly. All my work colleagues at Man Investments were surprised and there was much talk of people switching spread betting firms. I have already enquired with other firms about moving my account. Whilst I don't trade crude a lot, I want that option.

It seems to me recently with other firms offering tighter spreads and better promotions, that CMC are more focussed on pushing their new trading platform than looking after the needs of what their customers want, being tighter spreads and a wide range of markets. It's a shame as I have always preferred CMC but this might be the last straw that pushes me to change providers.

Mike

 

[peakoil]

Hi peakoil

I have never understood why it is important for spread betters to bet on quarterly bets when all a quarterly bet is, is the cash price plus the cost of carriage for 90 days (decreasing as you get nearer the date).
The only technical difference between our cash bets and a quarterly bet is that with our cash price we quote the cash price and the cost of carriage is added daily (if you keep it over night) and you can keep the bet open indefinitely, just day by day. With a quarterly bet the cost of carriage is rolled up into the price and when the bet expires you roll it over for another quarter if you want to keep it open. Remember the futures price is TODAY'S CASH PRICE PLUS/MINUS THE COST OF CARRIAGE.
Can you tell me why it is important to you to want to bet quarterly and not cash
because I cannot see any technical reason why you would want to do this unless you wanted to play the interest rate/cost of carriage yield curve and then I suspect you wouldnt do this on cfd or spread bet contract but you would need to go through physical and interest rate swaps.

peter

Thank you for your response. Well I'll admit that I didn't exactly expect you to answer something like this: "well we removed the futures crude contracts and replaced them with a daily rolling cash product only - because we thought we'd be nice to all our customers on the new platform and save them all some money as a way of saying thank you for leaving Marketmaker..."

Why would a spread bet company remove one product and directly substitute it for another product if there were NOT more money to be made from those customers who stay, by doing so? In this case several products are being removed and substituted for cash price products - and believe you me - if there was a way of proving why this was to all customers' advantage, then why wasn't such stated in the email given - or otherwise explained beyond any doubt on ringing customer services!? And I certainly don't believe that your removing these products is a decision based on financial idiocy. After all, CMC isn't (yet!?) a charity.

I don't happen to have your new platform, given how much I like(d) Marketmaker, nor can I at this moment compare the daily cash spread offered on your new platform & financing charges, to your soon to be retired future spread which I can see to be acceptable to me with a spread of only 5 points on brent and 6 points on the near month Nymex contract, and zero additional charges even if I hold my position to its expiry. Accordingly, please would one of you who has access to the new crude products pricing and financing charges take up the following challenge.

Perhaps one of the mathematically minded good souls among us, who does have access to the new platform as well as marketmaker's 5 & 6 point future crude spreads, would kindly take up the challenge please, of proving or disproving that the removal of the crude futures products and replacing them with a rolling daily cash spread plus overnight rollover financing costs is not in the customer's best interests. Thank you.

(ps - if no one wants to take up this challenge within the next couple of days, please provide me with the daily cash spread, plus rollover financing charges on same, and I will try and seek a mathematically minded friend's assistance, to prove the above argument beyond any doubt.)

 

[scose-no-doubt]

Hi peakoil

I have never understood why it is important for spread betters to bet on quarterly bets when all a quarterly bet is, is the cash price plus the cost of carriage for 90 days (decreasing as you get nearer the date).
The only technical difference between our cash bets and a quarterly bet is that with our cash price we quote the cash price and the cost of carriage is added daily (if you keep it over night) and you can keep the bet open indefinitely, just day by day. With a quarterly bet the cost of carriage is rolled up into the price and when the bet expires you roll it over for another quarter if you want to keep it open. Remember the futures price is TODAY'S CASH PRICE PLUS/MINUS THE COST OF CARRIAGE.
Can you tell me why it is important to you to want to bet quarterly and not cash
because I cannot see any technical reason why you would want to do this unless you wanted to play the interest rate/cost of carriage yield curve and then I suspect you wouldnt do this on cfd or spread bet contract but you would need to go through physical and interest rate swaps.

peter

This argument can only be resolved if you post rolling daily finance cost and convenience yield computations that could be looked at by the more quanty members. Until then it's just going to be one party's word against the others. I'm not saying your computations are wrong/thievery btw.

Just read peakoils post lol. Erm... what he said.

 

[PC at CMC Markets]

Hi scose
will post something soon just running it by our very good friends in compliance.
regards peter

This argument can only be resolved if you post rolling daily finance cost and convenience yield computations that could be looked at by the more quanty members. Until then it's just going to be one party's word against the others. I'm not saying your computations are wrong/thievery btw.

Just read peakoils post lol. Erm... what he said.

 

[peakoil]

Hi scose
will post something soon just running it by our very good friends in compliance.
regards peter

I would just like to add that if the spreads are still yet to be finalised/open to revision, I would appreciate if you could return to answering my queries at a future date.

Thank you.

 

[lancenicolase]

Two question:
1. Could you please comment on your financing charges from thead http://www.trade2win.com/boards/spr...w-platform-bet-financing-cost-over-30-a.html?
2. Do you nave AIM on the new platform?

Thanks.

 

[PC at CMC Markets]

Hi fast trader.
I ate them all before you came. Have to keep my 105 kilo frame up to scratch ever since they stopped selling meat pies at Highbury. All low salt, low sugar stuff now at the Emirates.

I think we must have put something in your coffee because your facts are not correct. If you select any uk share on our demo platform, from the library you will see a little chevron on the top left hand corner. click on this and select over view. then look down it it will give you the quote size for each stock. so vodafone for example is
£500 per point. if you want to do £1000 per point you have to do two deals. We are quoting you for size per trade so you do not get any requotes and no dealer referal you can check out each share by clicking on this chevron

hope that helps
regards Peter

Hello Peter,
I had been to one of your seminar last week.Disappointed that there was no sandwiches,just the coffee!!!
Anyway, What i understand is .. with major UK shares you can only bet £2 a point at a time. I was told to do another trade if i want to increase the stake! Well.. Your system is not for me at the moment, i stick to Marketmaker.

Thanks

 

[PC at CMC Markets]

Hi Peakoil

When you trade or bet on crude you are trading the cash markets, whether it is a futures bet or a rolling cash bet. The quarterly bet is today's cash price plus the cost of carriage to the maturity date. It basically doesn't matter if you trade/bet crude on a cash basis or future delivery basis, it is the cash market that determines whether prices go up or down. Also the calculation is exactly the same for cost of carriage. so if
the cost of carriage is $1 per day for the 30 day bet the future crude price will be cash plus $30
and the rolling cash price will be cash price plus $1 per day. If you do not believe this then please get some body to work it out on this forum. Better still I will invite your accountant to come to this office and we will sit him through the calculation and he can print his findings on this forum.

Most punters that trade quarterly bets on oil do so they can keep the bet open until that date. it gives them time to make money. With a rolling cash bet you can keep it open indefinitely. What's more, is that there is no closing spread to roll the quarterly bet to the next quarterly date to keep the bet open. So if the cost of carriage is exactly the same on daily cash carriage cost and quarterly carriage cost then trading rolling cash oil with us should be cheaper if you carry the bet beyond a quarterly maturity date.

I appreciate you like the way you trade quarterlys on market maker but next gen is about giving more transparency. Also when you open a rolling cash bet with us the bet execution price is kept at the price you bet at (in back office) and every day there is separate cost of carriage cost debited to your account. Therefore the bet stays open at it's original price. When a quarterly bet matures you have to roll it over at the current market price, pay the additional spread and you realise profit or loss on the roll over. Thus changing your original entry point. Like I said more transparency for you with rolling cash. also like quarterly bets, rolling cash bets are marked to market real time so you can use unrealised profits to withdraw cash or increase your position.

Hope that helps. let me know if you want to send your accountant over to go through the details.

thanks Peter

Thank you for your response. Well I'll admit that I didn't exactly expect you to answer something like this: "well we removed the futures crude contracts and replaced them with a daily rolling cash product only - because we thought we'd be nice to all our customers on the new platform and save them all some money as a way of saying thank you for leaving Marketmaker..."

Why would a spread bet company remove one product and directly substitute it for another product if there were NOT more money to be made from those customers who stay, by doing so? In this case several products are being removed and substituted for cash price products - and believe you me - if there was a way of proving why this was to all customers' advantage, then why wasn't such stated in the email given - or otherwise explained beyond any doubt on ringing customer services!? And I certainly don't believe that your removing these products is a decision based on financial idiocy. After all, CMC isn't (yet!?) a charity.

I don't happen to have your new platform, given how much I like(d) Marketmaker, nor can I at this moment compare the daily cash spread offered on your new platform & financing charges, to your soon to be retired future spread which I can see to be acceptable to me with a spread of only 5 points on brent and 6 points on the near month Nymex contract, and zero additional charges even if I hold my position to its expiry. Accordingly, please would one of you who has access to the new crude products pricing and financing charges take up the following challenge.

Perhaps one of the mathematically minded good souls among us, who does have access to the new platform as well as marketmaker's 5 & 6 point future crude spreads, would kindly take up the challenge please, of proving or disproving that the removal of the crude futures products and replacing them with a rolling daily cash spread plus overnight rollover financing costs is not in the customer's best interests. Thank you.

(ps - if no one wants to take up this challenge within the next couple of days, please provide me with the daily cash spread, plus rollover financing charges on same, and I will try and seek a mathematically minded friend's assistance, to prove the above argument beyond any doubt.)

 

[PC at CMC Markets]

Hi Lancenicolase

will answer your second question first.
no aim stocks on next gen but will be adding some in a few days time.

now first question second.

I have already answered this on posting 1008 but to save you looking it up here it is


CMC cash commodity prices are created by stripping out the carrying costs (convenience yield) that are built into futures prices. So the price you see on the platform is an implied cash price (stripping the underlying convenience yield from respective futures contracts). This cash price will be at a discount (less) than the futures price when the market is in contango (i.e. the price to buy a commodity today is cheaper than buying it in the future due to carry costs) and it will be at a premium when the market is in backwardation (i.e. the price to buy today is more than buying in the future due to immediate shortage / under supply or future oversupply in the market). So the convenience yield (carry cost that you get charged or paid depending on whether you are long or short) is dictated by the underlying futures market. The only difference is that we make this charge apparent and not build it into the price like futures contracts. Most people that trade futures don't pay attention to the convenience yield curve (the price difference between one future contract to another) but are subject to the same economics without noticing it.

For non-perishable commodities like gold or silver the convenience yield will be relatively low and for commodities such as Natural Gas, Heating Oil historically the carry costs could be quite substantial due to the volatility, storage constraints, seasonal factors, weather and political events.However it is important to note that the convenience yield applies to both sides of the trade if the market is in contango people who buy the commodity will pay this carry cost and people that short sell receive it as income on a daily basis. Alternatively for commodities that are in backwardation people who short sell the commodity will pay this carry cost and people that buy the commodity will receive it as income on a daily basis. The spread between what is paid and what is received in normal market conditions typically range between 1 to 3 percent.

Maybe giving you a current example could further clarify this... I will focus on Crude Oil which is going through some interesting times. Historically the price difference between Brent Crude Oil and West Texas Intermediary has been minimal. Currently the price difference between the two futures contracts are $17 (i.e. Brent $116.98 while WTI 99.76). WTI is in contago (with a steep convenience yield) while Brent is in Backwardation with a smoother convenience yield. Please refer to the respective images below which display prices and respective convenience yields. So due to the steep convenience yield curve WTI price diffreneces between various delivery dates are larger and for brent due to the smoother curve its lower. As a result implied cash price is closer to the front month contract on Brent and farther away for WTI.

So a customer that was short Brent yesterday would have paid 2.38% in carry cost and a customer that was long would have received 1.33% and a customer that was long WTI would have paid 30.06% and a customer that was short would have received 28.95%.


Bid Ask
US Crude -30.06% -28.95%
UK Crude 1.34% 2.39%


please see attachment I hope this helps
tks peter please see attachments oil.doc

Two question:
1. Could you please comment on your financing charges from thead http://www.trade2win.com/boards/spr...w-platform-bet-financing-cost-over-30-a.html?
2. Do you nave AIM on the new platform?

Thanks.

 

[peakoil]

Thank you Peter for your response. Even if it appeared nonsensical to you that I should be unhappy to see crude futures bets removed from CMC's platforms, as will happen, I take some solace from knowing that at least one other poster, at Man Investments, agreed with me. Please forgive me lastly for wondering - why, if solely trading rolling cash on crude oil is so much better for both CMC and its customers, has it taken you over 10 years to remove all the futures contracts and replace them with a daily rolling cash contract (plus daily financing charge)?

Anyway, perhaps that's just for me to ponder and again, thank you for responding. At the end of the day, I really don't want to labour the issue: it's the customer's choice in an open market whether to accept the coming changes or not. That is, the other spread betting firms will be continuing to offer spread bets on both daily and futures on crude, so it's up to me, as a customer, to decide whether CMC will continue to meet my needs (without futures bets on crude) or not. I'll stay on the sidelines for the timebeing.

As for your suggestion about an accountant, as it happens, the best chap I had in mind for all this is in NYC at the moment, so it's unlikely I'll be taking him in with me to argue the point any further. But thank you very much, nonetheless, for your offer.

Maybe someone else on this forum might have more to add, given your response.

 

[Mike_trade]

Hi Peter

I am sorry I misunderstood the email from CMC and thought that there was going to be no crude oil trading. The only instrument for crude that I can find in MarketMaker is the April expiration one and I can't see a rolling cash bet?

Thanks

Mike

Hi Mike

Many thanks for your posting but I am still surprised why you need to trade quarterly bets over cash bets when technically they are the same. See my response to peakoil. Before you close your account and move over to some body can you explain to me why this is important . we have spent a lot of time on rolling cash commodities, have to say they are our most popular product on next gen platform . we have an in house team of quants that have developed this product.

We believe it is better for clients in trading commodities in that you only pay cost of carriage on a daily basis and not on a quarterly basis and as the bet is carried over daily there is no close out closing spread, unlike when a quarterly bet expires. Also you are wrong in saying that we are not concentrating on spreads because if you compare our commodity spreads to others I think you will find we are the tightest.

look forward to your response.
regards Peter

 

[kwickwool]

Hi Peter,

 

[arabianights]

Just looked at CMC and this has probably been answered already, but where is fixed income!?!?!?

 

[PC at CMC Markets]

hi arabianights

New instruments being loaded as we speak. going to launch more products in next week or so. I think fixed income will be in second wave towards end of the month.

getting near now.
tks pc

Just looked at CMC and this has probably been answered already, but where is fixed income!?!?!?

 

[PC at CMC Markets]

hi kwickwool

did you post message apart from Hi Peter
nothing is showing on the post

thanks peter

Hi Peter,