Market chat

[options]

Bem;
I use both companies extensively as well as direct access trading.

The spread with fins in real trading is .10 and suffers from a very,very slow trading platform, but the last few digits are in pence where with cmc the last digits are in pounds, and (can't quite remember) has about an 8 spread.

Forget what the first screens are telling you. They lie.

In practise the price gets jerked about to suit the sb's as well.

Options.

 

[BeM]

Hi options,
You mean they are simply lying when posting clearly that the psread for daily S&P 500 is 0.5 or 0.7? I tried the software they have at CMC and it looked clear to me, the spread was 0.5, do they close the transaction in a way to make the rest, to make the spread bigger for themselves?
Which one is more trustworthy then, has anyone ever traded S&P 500 at any of these companies?
Thnka!

 

[options]

Perhaps lying may be too strong a word. Cmc posted live spread is .5, but it does fluctuate. Let's say they all bend the truth to suit.
It is after all, the price how they see it, and they clearly state this. So if the 'real' market is trading at 885.0/885.5 They might quote you 886.2/886.7

That spread will move from o.5 at strong market moves and at times may be bigger than .5

Where as with Fins. They will show a price on their trading screen and when you try to trade will quote a very different price, (most times, though not always). their trading software is slower, and this can sometimes work in your favour.

If you know the market is going to jump on open, say 50 points. You have no chance of getting this move because they will be there before you.

Maybe lying is not too strong a word after all.

"Which one is more trustworthy then"

Purely my own view here, is that they are all a bunch of thieves and should not be allowed to operate the way they do.
They quote you a price that they see fit and it can be as far removed from the real price as they want it to be.

Only an idiot would trade with these people.
I am such an idiot because I can beat them more often than not, and it is tax free cash which is the lure of the companies; but you pay more 'tax' then you would normally pay when you have to trade at their spreads.

All of this has been covered at great depth on these boards before.


Options.

 

[BeM]

Thanks Opetions, I think you're absolutely right. I actually tried the software they have at CMC, and of course, the jumps almost everyone can expect at the beginning never happen, because they are already covered. Though other movements during the day, where they couldn't expect it, seemed to be okay, very very slightly different from the real price, at least for SPX I can say. But I suppose they couldn't afford to modify the prices for individulas, could they?
Maybe I will be another idiot to try it with CMC, as far as I can understand it's far better than Fins, at least operationally, not so in the case of risk management

 

[Morris]

Interesting that you mention CMC.

I had a post pulled on Hemscott because I was ever so slightly critical of their recent service.

They are indeed cowboys of the first order. Be careful.

 

[options]

Hemscott using subjective censorship? Nooo, neeever!
(damn hard to be sarcastic in print sometimes...)

I wonder if cmc pay for advertising etc on Hemscott and so have a little bit of clout...mmmm.

And Bem... You have yet to experiance the dreaded re-quote at cmc (and the others).

Options.

 

[RogerM]

Options is right BeM. Whilst the spreadbetters are OK for swing trading over a medium term time frame, and they enable you to cut your teeth on very small trades which you can't do easily through a broker, never-the-less for larger trades and for scalping they are not as good as they present themselves.

As an example, a few weeks back I was short Amerada-Hess and it had gone just over $1 in my favour. I went to close the position, I was offered a price which was on screen for less than 2 secs, and it was then withdrawn, and it was 45 secs before a new price was offered which was 65c higher. It was infuriating to give back so much profit, but imagine how much more frustrating if the original trade had gone against me, and 65c was added to my stoploss.

Yesterday I monitored KLAC on CMC against the prices of the stock on MyTrack. After a rise to $33.75 the CMC chart spiked down by nearly$1, spent 30 secs down there, and then spiked back up to nearly $34. There was no such spike down in the r/t share price or in the bid price given by MyTrack.

These anomalies never seem to last long, but if you are long a stock and it spikes down $1, I challenge you to hang on in there without your bottom winking 19 to the dozen!!

 

[bigblue]

Less of the bottom winking please!!

 

[RogerM]

A further point to consider. If you are trading the FTSE100 index, there is a spread at CMC of 4 points. Typically the spread on the FTSE100 future is 2 points. Does this make much difference?

Take a trade where you enter with the ftse future at 3998/4000 and exit at 4010/4012. You have made 4010-4000 which gives 10 x £10 = £100 less £3.40 commission (IB rates). i.e. £96.60 profit.

The spreadbetter will probably get in at 3998/4002 and will see the same exit as the futures trader if he is following the same futures chart. As the index turns with the futures at 4010/4012 the spread on the SB will turn to 4008/4012. So to match the exposure of the single lot futures trader you trade £10 per point. In this example you make 4008-4002 = 6 x £10 = £60 profit. i.e. the futures trader makes over 50% more.

Now consider what happems if on the next trade you get it wrong and go long with the futures at 4010/4012. You decide to get out at 3998/4000 so make a loss of 4012 - 3998 = 14 x £10 = £140 loss + £3.40 commission for a total loss of £143.40. The Spread better will go long at 4010/4014. As the index turns the bid will lead the spread and making his decision at the same point as the futures trader will exit at 3996/4000 for a loss of 4014-3996 = 18 x £10 = £180.

After these 2 trades the futures trader is down £96.60 - £143.40 = -£46.80 loss. The SB will be down £60 - £180 = -£120 loss.

See the difference? If you trade very small i.e. 10p per point to learn whether you can pick winning situations then SB's are your best bet, but once you can do it move up to the full futures contract - it is so much easier!

 

[bigblue]

IB? Who are they? They do FTSE round turn for £3.40?

 

[options]

Good examples Roger.
Take it slightly further and the difference between the two is stagering and disheartening for spreaders.

Some time ago, just about when everybody was screaming the joys of sb, mainly the tax free bit, and jumping on the band waggon of; this is the new way to trade etc etc, (admitedly it does have it's uses, but the herd were not seeing past the end of their noses,)(as usual). I traded both at the same time for the same risk. ie £10 per point.

This was a long trade, and the futures gave a fairly comfortable £400+ profit, while the sb trade returned only a £200+ profit, both opened and closed within seconds of each other.

The sb trade was the hardest of the 2 in terms of running the trade and offered more heart stopping moments and bottom winking as you so quaintly put it. (Truth is I was able to sit 2 inches higher in the chair).

At that level, you have to work out if the risk is really worth the reward, and in most cases the answer is no. The only benifit you get from sb is the supposedly tax free bit; And you have to ask yourself this very simple question:
'How much tax am I going to pay on a £400 winning trade?'
If your answer is anywhere near £200. You may happily carry on spread betting as the sb companies really do value your custom.

Even when you win with these people you end up paying for their holidays and put the clothes on their backs.

I still use the sb's, but only trade small, simply to keep my hand in and get some joy in a cruel world by consistantly beating them.

It reminds me of an old snooker player, (either Joe Davis or Ray Readon) who used to practise as a young lad in the local snooker hall and only ever played on a certain table because the pockets were slightly smaller than the others in the club.
On being asked why he only used that particular table, he used to say that when he played in tournaments, the pockets on those tables were twice the size and it was like rolling a marble into a cave. (The difference between real trading and sb trading)

Good fortune.

Options.

 

[options]

Big Blue.
Interactive Brokers.

www.interactivebrokers.com


Options.

 

[bigblue]

Thanks

 

[BeM]

Fellows, please tell me one thing about spread-bet companies; would they change the price specifically for individuals, or they jusy adjust the prices for all the traders. For example this is something very much illegal I suppose if they would give a smaller price for those who go short, and give at the same time, the higher price for those who go long. Do you believe they could do this, or they just adjust their prices as they guess the direction of the market, but for everyone, all the traders?

 

[BeM]

bigblue, why are you dressed like that? Don't you have a warm place?
The reason I'm standing like that in distance is that I think too much, and remain behind sometimes

 

[spoon102]

Can somebody post me the EPIC for FTSE futures

Thanks

 

[options]

Spoon:
Who you using. broker and charting?

It does vary.

Options.

Bem:

Don't know, so can't comment.

 

[bigblue]

bigblue, why are you dressed like that? Don't you have a warm place?
The reason I'm standing like that in distance is that I think too much, and remain behind sometimes

Cos it sooo bloody cold in this country!

 

[Naz]

Yesterday I monitored KLAC on CMC against the prices of the stock on MyTrack. After a rise to $33.75 the CMC chart spiked down by nearly$1, spent 30 secs down there, and then spiked back up to nearly $34. There was no such spike down in the r/t share price or in the bid price given by MyTrack.

These anomalies never seem to last long, but if you are long a stock and it spikes down $1, I challenge you to hang on in there without your bottom winking 19 to the dozen!!

I hope this might help spread betters on Nasdaq stocks.Many many times a print will go off above or below the inside quote,the chart then jumps to follow that print but anyone looking at the Nasdaq level 2 screen can see that the stock isn't realy trading at the price shown on the chart.Looking at the level 2 screen enables you to see where the real trading is occuring and not where odd prints are going off.Very often tops and bottoms of scalping moves are made this way.

Viewing the Nasdaq level 2 screen of a stock like KLAC gives you exactly the true picture of what is happening in the stock,you dont need a chart and you dont need a real time quote.So a spread better may well be able to take advantage of a spread betting companies quote being out of sync with the true market action and profit from their mistake.It would also help someone stay in the trade if the sb company tries to frighten a trader out of his position by jerking the price around.

 

[options]

Very astute Naz.

Options.