FSA and Spreadbetting plus Forex

[Nut]

FSA enhances Client Protection to include Spot Forex | Forex Magnates

Please see the above link, anybody have any views on this new rule. To be honest I am not sure if I am better or worse off so am interested in the views of others.

I have asked my spreadbet co(smart live) for an explanation but am still waiting a respones.

Cheers

Nut

 

[pboyles]

FSA enhances Client Protection to include Spot Forex | Forex Magnates

Please see the above link, anybody have any views on this new rule. To be honest I am not sure if I am better or worse off so am interested in the views of others.

I have asked my spreadbet co(smart live) for an explanation but am still waiting a respones.

Cheers

Nut

You are better off because the money has to be segregated. In theory there's less chance of it being lost if the company goes under.

 

[Nut]

Thanks I just read it again in a little more detail with brain engaged and came to the same conclusion

Nut

 

[Nut]

Below is the response I had from SmartLive/GKFX


This does not effect you in the slightest. This refers to clients who are classed as 'professional' and who generally trade FX/CFDs rather than spread bet. You are classed as a retail client, as all our customers are, and as such ALL your funds are totally segregated in specific client accounts. Also your funds are also guaranteed by the FSA up to £50,000.

Regards

GKFX

 

[advfntrader]

so professionals trade Direct market & CFDs...I wonder why....:whistling

 

[alex2006]

My understanding is: professionals trading large size contracts, first, those trades are likely to be executed quickly because of real liquidity, second, forex DMA companies charge commission, where they profit. On the other hand, Spread Cos act as the principle counterparties, i.e. they profit from your loss. Therefore, fundamentally, spread co like to see you losing rather than winning (they may cheat to get this). Good DMA forex brokers wish you keep trading/winning while they earn more commission, in contrast.

Trading with spread Co is like asking a tiger for its skin, IMHO.