IG Index getting slippery

[The Leopard]

Thanks very much Leopard. That's great input for everyone.

I hadnt heard of either ibetfinancials or KPmarkets.

Well, FP are pretty much brand new in the UK, I think they've been going less than a year here, although they've been around down under for a long time. They've got a small thread on here, but they're very helpful if you contact them directly, and the website has got a lot of info.

ibetfinancials seem to be pitching very much for experienced professionals trading serious size. Minimum account is 35 grand, but with platform costs and increased commissions they're probably not viable (compared to a standard broker) unless your account is at least 50 and ideally rather more than that. Again, they've got a thread here but it's not that active. But if you're profitable and serious, they're worth a look. One interesting thing, they are adamant that SB is tax free even if it's your sole income, and claim to have written opinion to this effect from both an eminent tax specialist and the Revenue.

One thing to bear in mind with FP is that they are subject to betting duty like all bucket shops, bookies and so on. If you lose you contribute to this liability, so they make a quarterly charge to cover this.

I would actually view this as a positive thing, as it would tend to support their assertions about their business model, but clearly they're only worth considering if you're confident about your profitability. $7.50 per RT (their standard emini commission, reducing for volume as usual) is also much steeper than the standard for a regular broker, which for low volume accounts tends to be in the region of $4.50 to $5.00.

 

[The Leopard]

I think sir leopard is refering to FP markets.

Jesus!

Sorry, you are quite correct. I must be going nuts.

 

[D70]

Well, FP are pretty much brand new in the UK, I think they've been going less than a year here, although they've been around down under for a long time. They've got a small thread on here, but they're very helpful if you contact them directly, and the website has got a lot of info.

ibetfinancials seem to be pitching very much for experienced professionals trading serious size. Minimum account is 35 grand, but with platform costs and increased commissions they're probably not viable (compared to a standard broker) unless your account is at least 50 and ideally rather more than that. Again, they've got a thread here but it's not that active. But if you're profitable and serious, they're worth a look. One interesting thing, they are adamant that SB is tax free even if it's your sole income, and claim to have written opinion to this effect from both an eminent tax specialist and the Revenue.

One thing to bear in mind with FP is that they are subject to betting duty like all bucket shops, bookies and so on. If you lose you contribute to this liability, so they make a quarterly charge to cover this.

I would actually view this as a positive thing, as it would tend to support their assertions about their business model, but clearly they're only worth considering if you're confident about your profitability. $7.50 per RT (their standard emini commission, reducing for volume as usual) is also much steeper than the standard for a regular broker, which for low volume accounts tends to be in the region of $4.50 to $5.00.

I believe they are correct. I've looked into it and the simple fact is that you are "gambling" as far as they are concerned (when using a SB). Further more a friend of mine has received a letter from HMRC stating he needed to pay zero tax (he cleared in excess of £1m) and was paranoid about them wanting a slice.

Thanks for the FP market and ibetfinancials info. Personally, I like to keep an eye on all participants for new products, costs, functionality and so on. The new players often give away chunks of edge to gain a market share and it's usually worth putting some business their way at this time to increase your efficiency. (But only starting with small amounts as, like others, I've had accounts closed down).

 

[The Leopard]

Thanks for the FP market and ibetfinancials info. Personally, I like to keep an eye on all participants for new products, costs, functionality and so on...(But only starting with small amounts as, like others, I've had accounts closed down).

Certainly that is a good idea and a sensible approach.

In theory of course, such a 'DMA SB' broker should have no interest in closing anyone down, regardless of their trading style. In fact, the supposed hate figure of SB firms - the successful scalper - should be the greatest friend of DMA SB firms. Their claims are absolutely clear - clients trade the actual market, and the company cannot profit from client losses, deriving their income instead solely from increased commissions.

However, this is what is claimed, and that is not necessarily the same as what is happening in reality. I am of the same mind as you - the proposition looks attractive to me, and I am willing to test it cautiously, but I think some time must pass before I can say whether this new model is genuine and good or simply another chapter in the long book of nefarious spread betting practices.

 

[new_trader]

If you want spread betting, there are as far as I'm aware two worth considering. Both are (or at least claim to be, and the claim is unequivocal) DMA outfits that simply route your trades through them, without interference. So you should be getting genuine genuine DMA, your orders actually enter the market and show up on the book etc, they cannot profit from your loss and so on.

The concern is whether they are fully transparent with their pricing (Quotes). That is what makes the real difference. I cannot see how a broker can give you full DMA functionality in every respect but still call themselves a spread betting broker. There has to be a catch.

 

[The Leopard]

The concern is whether they are fully transparent with their pricing. That is what makes the real difference. I cannot see how a broker can give you full DMA functionality in every respect but still call themselves a spread betting broker. There has to be a catch.

Well, they don't claim "functionality" (that's Prospreads) but rather actual DMA. In effect I think, they claim that you trade just as normal, but orders come from their account instead of yours.

One catch is obvious - the cost. Standard emini commission is $7.50 as opposed to $4.50 - $5.00 with a regular broker. I think it reduces to $5.00 once you do 500 a month - well, with a regular broker you wouldn't dream of paying 5 bucks for that kind of volume.

In theory I see no problem with them simply routing your orders through their own account without interference. So for example your orders (technically theirs) should show up in the book once placed, which might be a way of testing the claims. One can also compare their feed with that of a regular broker - it should be exactly the same.

You are right to be sceptical, and I certainly agree with you. My own view is that I will test it cautiously until I have extensive personal experience that things are as they seem to be.