Ha ha, if you can't understand it then that's a big clue that you're not really qualified to use DMA yet
...and learn some manners before you post
...and learn some manners before you post
With futures margins and commissions being so low these days I'm not sure if there's much advantage in doing that. I doubt if the tax issue would outweigh the extra spread cost, it wouldn't for me anyhow, maybe it would for others.
ProSpreads
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Hi Chris,
You can get a volume indicator on indices and forex futures.
Kind regards,
Dan
A Dashing Blade
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Don't quite understand your point.
In round numbers they (efectively) charge of the order of 1 tick per round trip for which you get real-time Level 2 visibility onto the futures exchange. Monthly turnover of (iirc) 200+ lots substantially reduces this (effective) commission.
No other spreadbet company to my knowledge operates this business model. They all (effectively) operate an internal market.
Velocity are, imo, their nearest analogue in the futures broking market, personally I've always been put off by their location however (Dallas?) and implications for sytem latency.
Super cheap commission is, of course, offered by IB, however they do not offer a true "real-time" price feed (iirc it's only 1 sec) + I've no wish to become involved (however periferally) with the US tax and regulatory authorities.
So if I understand correctly to trade the ES they charge one tick which is $12.50, however with a broker you will pay lets say $3 per round trip and you will be trading in the real market with access to the prices from the exchange. What advantage is there in paying that extra $9.50 per round trip, what do you get for that?
Also how much slippage will they induce every now and again to get a few more ticks from you here and there. They are a spreadbetting company after all.
Yes, but you've deliberately not mentioned the major difference, which is that true DMA you are guaranteed that the trade goes in the real market, whereas since PS rebranded, they changed the terms that all trades are replicated in the real market to all trades are hedged. This is where people who worry about SB start to get worried again.
Not to mention the fact that you removed automatic trading from PS, which is why I had to go proper DMA...
so to go down the dma route via a futures broker are they all us based and what are the tax implications.
and the $3/4 round trip charge,is this the total for entering and exiting 1 contract. so $3/4 per $50 per point on the es? therefore $100 per point would be $6/8 and so on, is that right?
and the $3/4 round trip charge,is this the total for entering and exiting 1 contract. so $3/4 per $50 per point on the es? therefore $100 per point would be $6/8 and so on, is that right?
Most seem to be US based but you're not liable for US taxation.
The commission is for a round trip ( to buy and later sell the contract). One tick on the ES is 12.50 and a full point is $50. So if you buy one contract at 1100 and sell it at 1101 then you make $50 and pay $3 or $4 commission. If you buy at 1100 and sell at 1100.50 you make $25 and still pay the same commission.
The commission is for every contract you trade regardless of how much money you make on the trade.
The commission is for a round trip ( to buy and later sell the contract). One tick on the ES is 12.50 and a full point is $50. So if you buy one contract at 1100 and sell it at 1101 then you make $50 and pay $3 or $4 commission. If you buy at 1100 and sell at 1100.50 you make $25 and still pay the same commission.
The commission is for every contract you trade regardless of how much money you make on the trade.
thanks,so 2 contracts would be $6/8 then?
so comparing it with a SB with a 0.5 point spread, its costing you 25 to place a 50 per point trade?
regarding the tax situation are you expected to file and pay a end of year tax return yourself,as if your self employed?
also do IB uk not do futures trading in sterling then?
thanks
montmorencyt2w
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There is a further difference isn't there? With an SB firm, if you buy at 1100, and then sell at 1100, it won't actually cost you anything will it? You can say that you "paid" the spread, but no money actually changed hands.
But with a "real" trading broker, you would still pay the $3 or $4 commission wouldn't you?
But with a "real" trading broker, you would still pay the $3 or $4 commission wouldn't you?
I gues you are right, but dont forget that if you trade at the same price then the actual market would have gone at least 4 maybe 5 tics in your favour so they are taking their commission from that, the 5 tics profit.
When i trade and if lucky take 5 tics , then pay the comission, i am showing a profit not a scratch trade.
Exactly
montmorencyt2w
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Aren't you also "paying" a spread?
Yes, but the point is the comparison is more like this - at $10 a point, say, your SB moves 2 points and has cost you nothing, your DMA has moved 3 points and netted you $7 (10-3 commission.)
A Dashing Blade
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All I can say is that, from home, I have benchmarked their trading system against both bloomberg and reuters price feeds by phoning my trading desk (professionally I work on a trading desk, have done for 25-odd years now), monitored their price ladder prices vis a vis the actual exchange (level 2) price ladder and entered and exectuted trades.
All the above was perfectly visible to someone watching other trading systems that accessed the real, underlying, market with no visible latency (time lag).
What more can I say. I have examined your concerns and found them to be groundless. This is a major reason why I use them.
Jack Hughes
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My reason for not using them is not that I doubt the accuracy of their prices or platform speed, just that the effective commission is so high.
ProSpreads
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Just to point out that the commission is the same as the spread charge, the commission is built into the spread, you have no other cost's.
Martin Kong3
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Actually pboyles, slippages don't just happen on spreadbetting companys. It's also happens on futures brokers aswell. Infact I had a 1 to 2 points slippage on occasions with the broker I'm with.