prospreads.com

[riogordo]

The reason I'm on this thread is because I'm considering the relative merits and demerits of Prospreads and Interactive Brokers. Of course there are several considerations, but the ones I've come to focus on are:

1) PS - basically what is their model? It's not just that ordinary SB companies take the other side to their clients, it's that they use underhand means to screw clients out of sustained winnings. They can do this because they make their own market. But they don't do it because they make their own market - a company could in principle make its own market and be honest. Just nobody's heard of an honest ordinary-SB firm, because basically they're bookies and if clients chuck their money away they try to encourage them to chuck more away, in their direction. In fact they're worse than high-street bookies because a high-street bookie's vig is about 11% whatever happens - and once they've taken it, the rest of the money that's bet goes to the winners. (OK this is a massive over-simplification , but in principle a high-street bookie wants to be flat on all outcomes)

So - what I really want to know is when do Prospreads hedge (fully and automatically, in relation to a specific order they've received from a client, and as soon as they can), and when don't they? Hopefully they will reply publicly. This is where I'm hoping they distinguish themselves from ordinary-SB firms, not just in the fact that the prices they quote are real market prices, which keeps getting trotted out but doesn't give the whole picture.

2) Interactive Brokers - I haven't looked at them so closely yet, but their customer service seems dire (just going by pre-sale experience here) compared to PS's. I've told them how much I'd be putting up, i.e. low-to-mid 5 figures (GBP) to start with, and they haven't even bothered replying to my emails. Various websites say how **** their CS is.

But is that particularly bad? Does it just come from them aiming at bigger clients, and if smaller clients get the same functionality (if not the attention and courtesy) of bigger clients, well that at least seems to be a good thing.


Lastly - Riogordo - isn't it 85K if Barclays go under, or do client a/cs come under different riles from personal a/cs?

You are right it has gone upto 85k. even better.

 

[Truth Seeker]

I'm still waiting for feedback and replies to very good questions raised by a few of us. I myself have nothing against PS either, I have no motives at all, I'm just really careful who I trade with, that's why I have been in this business for years. A fool doesn't look before he leaps. Again, why the £500k clear equity?

 

[kerching]

I'm still waiting for feedback and replies to very good questions raised by a few of us. I myself have nothing against PS either, I have no motives at all, I'm just really careful who I trade with, that's why I have been in this business for years. A fool doesn't look before he leaps. Again, why the £500k clear equity?

TS - you reflect my thoughts.. i'm looking before leaping. Would like to know hear a few more answers.... The adhoc hedging? the rather large sum of equity required which will surely put many out of the picture..certainly myself lol.

My thinking is , is that if you have confidence with the broker you trade with then that is the bedrock. All else is then in your hands to play the market & not the market and a twelfth man.

who do you currently trade with may i ask?

 

[market_bull]

Is it okay if I'm merely just interested in seeing the responses to the questions? I have no future plans about it... but the questions are valid and deserve a response.

 

[Truth Seeker]

TS - you reflect my thoughts.. i'm looking before leaping. Would like to know hear a few more answers.... The adhoc hedging? the rather large sum of equity required which will surely put many out of the picture..certainly myself lol.

My thinking is , is that if you have confidence with the broker you trade with then that is the bedrock. All else is then in your hands to play the market & not the market and a twelfth man.

who do you currently trade with may i ask?

I currently trade with Oanda, FXCM, GFTUK, IG (swing trades). I'm looking at trading with PS for one particular type of trading method which will need good execution and enable me to load up over time without any worry of order fill problems.
I would rather go the Tax free route, but if they don't tick all my boxes, I will bite the bullet and go the Tax route with another non sb broker.
To add I have a couple more dormant sb accounts whom I have traded with before but not been 100% happy with so just left some money in just in case they improve in the future.

 

[kerching]

cool - no probs with any of those 3?

 

[Truth Seeker]

cool - no probs with any of those 3?

Oanda, is good in normal market conditions, and you can load up with no real fear of any sinister tricks, expect slippage from time to time, but a no go around news times as they widen their spreads, I trade on 5/15m charts with no real problems. Disadvantage - You pay tax on winnings.
FXCM, is ok in normal market conditions for 30 min/hourly+ trades but the spreads need to be reduced for me to load up, avoid around news times and scalping as they can slip you like crazy.
GFTUK, again, ok to use around normal market conditions but for slower trades (30min +) as they too, slip you if you scalp.
IG, well I have been with these guys for years and have all my charts set up with their excellent Pro Real Time Advanced charting platform and my own customised indicators, I use these for my swing trades (4hr, Day, Weekly) trades.
I'm looking at PS primarily for scalping, (trades I will be in for up to 5 mins at a time), so need to be able to load up with no fear of the usual tricks sb firms play when you're trading this swiftly. So far I see obstacles
that don't need to be there, but as I said, I will move forward to a non spreadbetting firm if needed to achieve my goals, but I would sooner line PS's pockets rather than hand over more cash to the ConDem t@ssers.

 

[Truth Seeker]

To add, after a few rounds of boxing with Peter Crudas the owner of CMC, they are now working on implimenting a few of my suggestions to their trading platform, and once the required upgrade has been finished I will open an account and have a bash to see if their execution is as fast as they claim, and as it's no dealer as well, hopefully it will work out ok. We will see if it fits my plan and I will report my findings either way.

 

[kerching]

thanks TS - most helpful....very kind of you to divulge.... good luck with your trading..
i'm intra day.. prefer 30 min TF.. hold overnight if required.. 1- 2 trades max a day

 

[ProSpreads]

Dear All,

In order to clarify a number of points:

Firstly, having a financial portfolio, i.e. cash deposits and/or equity holdings in excess of EUR 500,000 is just one of a number of criteria we look at when we attempt to classify a client as a “professional”. It is not a defining criteria, as has been suggested, and it is possible to open an account without meeting this requirement.

Furthermore, with regards to client funds, ProSpreads is regulated by the Financial Services Commission (FSC) in Gibraltar. Currently all clients are categorised as ‘Professional’ under MiFID and as a result waive their rights to the Gibraltar Investor Compensation Scheme (GICS), (which currently provides ‘retail’ clients with compensation of up to 20,000 euros)
All client money is held in a segregated account at Barclays in London, so is held separately from ProSpreads own funds. If anything happens to ProSpreads, client funds are protected. Also the client money is held ‘in trust’ at Barclays, so even if they go into default, client funds are protected.

With regards to the hedging of trades, banks globally are liquidity providers to investors and traders, as are the retail spread betting companies.

ProSpreads has the ability to also provide liquidity but will always show you the underlying price, which you will always be trading on. So the fact that Propsreads shows and provides clients with that price and trade transparency, then it should not matter whether ProSpreads internalises some trades, instead of the underlying market taking the other side. At the end of the day, clients receive the exact same functionality whether we hedge their trades or not. Furthermore, we do not have the ability to manipulate prices in any way, shape, or form, given that we always show the prices from the underlying markets.

Kind regards,

ProSpreads

 

[Ross Spur]

With regards to the hedging of trades, banks globally are liquidity providers to investors and traders, as are the retail spread betting companies.

then it should not matter whether ProSpreads internalises some trades, instead of the underlying market taking the other side. At the end of the day, clients receive the exact same functionality whether we hedge their trades or not. Furthermore, we do not have the ability to manipulate prices in any way, shape, or form, given that we always show the prices from the underlying markets.

Kind regards,

ProSpreads

Yes, but how/why/when do you decide not to hedge, and if it's not automatic why not allow trading in amounts other than the underlying market's lot size?

 

[Shaun12uk]

Yes, but how/why/when do you decide not to hedge, and if it's not automatic why not allow trading in amounts other than the underlying market's lot size?

I could not agree more!
Why full lot sizes only when you are not hedging against them. You would get more business if you gave the option of half contracts also.

Any how I want clarification on the trust mentioned regarding client segregated funds. I think you are totally wrong to even try to infer you are offering some protection to Clients in this way and to me it sounds like a load of flannel and does not do anything for your credibility.

If this was the case then why would governments go to the trouble of offering the compensation schemes for banks with segregated clients accounts, which You ARE NOT OFFERING to your clients because you classify them as Pros.

The fact you are classifying Clients as Pros says to me you are avoiding this for whatever reason it is I don't know but believe it is the latter that I have mentioned. The euro mifid is a smokescreen of sorts if it is not please quote the applicable section of it you are referring to which makes you classify Clients in this way.

 

[johnnn]

Yes, but how/why/when do you decide not to hedge, and if it's not automatic why not allow trading in amounts other than the underlying market's lot size?

Yes - why not hedge all client trades? Surely that's a sound model if the idea is that all profits will come from brokerage? Easy too, if all bets are in multiples of exchange-determined lots.

Also does the Prospreads software (or possibly wetware) decide to put certain clients on 'don't hedge' or certain trades?

I thought all money in all bank accounts was held by the bank 'on trust'.

 

[Ross Spur]

Yes - why not hedge all client trades? Surely that's a sound model if the idea is that all profits will come from brokerage? Easy too, if all bets are in multiples of exchange-determined lots.

Supposedly, that's how it worked when they started as FuturesBetting.

 

[riogordo]

I could not agree more!
Why full lot sizes only when you are not hedging against them. You would get more business if you gave the option of half contracts also.

Any how I want clarification on the trust mentioned regarding client segregated funds. I think you are totally wrong to even try to infer you are offering some protection to Clients in this way and to me it sounds like a load of flannel and does not do anything for your credibility.

If this was the case then why would governments go to the trouble of offering the compensation schemes for banks with segregated clients accounts, which You ARE NOT OFFERING to your clients because you classify them as Pros.

The fact you are classifying Clients as Pros says to me you are avoiding this for whatever reason it is I don't know but believe it is the latter that I have mentioned. The euro mifid is a smokescreen of sorts if it is not please quote the applicable section of it you are referring to which makes you classify Clients in this way.

I am only guessing but I am sure if they have one client buying and one selling then they would not hedge. Surely you can not seriously expect a company to tell you the ins and outs of how they do things. Maybe you should ask them for their system coding!!
Maybe they are not interested in clients who can not afford to trade the minimum of 1 lot?
Also they have said that funds are held in a segregated account. There must always be trust and they have been owned by LCG for a good few years.
Anyway this thread is boring me now and I am happy with them at that is all that matters.

 

[A Dashing Blade]

. . .
All client money is held in a segregated account at Barclays in London, so is held separately from ProSpreads own funds. If anything happens to ProSpreads, client funds are protected. Also the client money is held ‘in trust’ at Barclays, so even if they go into default, client funds are protected.

I can personally confirm this, had my brother (semi-senior in Barclay's retail banking) check this out.

Yes, but how/why/when do you decide not to hedge, and if it's not automatic why not allow trading in amounts other than the underlying market's lot size?

One client wants to buy at the same time another clienrt wants to sell. They cross the trade in-house. Clients benefit by (effectively) moving straight to the top of the trade queue. Simples.

. . .
Why full lot sizes only when you are not hedging against them. You would get more business if you gave the option of half contracts also.

Yes - why not hedge all client trades? Surely that's a sound model

Then PS would turn into just another spread-betting company.
You guys are missing the whole point. Think of them as a futures brokerage offering clients the ability to take the exact prices offered on the underlying market.

. . . Anyway this thread is boring me now and I am happy with them at that is all that matters.

+1 (been happy with them since they started up as FB)

 

[johnnn]

One client wants to buy at the same time another clienrt wants to sell. They cross the trade in-house.

OK so please can PS confirm that this is the only time when they don't hedge. If so, when they get an order, I wonder how long they sit around waiting for an order in the opposite direction before they hedge, and whether this varies from client to client. What I'd really like to know is whether how they handle an order is automatic, depending only on that order and what other orders they have in, or whether it depends on the client's position or history or details in any way.

I have to say, I haven't heard anyone call PS a bunch of crooks, as many have called the ordinary-SB firms, especially in relation to always-against-the-clients'-interests disconnections etc. I haven't even heard that kind of thing about them from the kind of client who's probably blaming the broker or SB-firm for their own poor money-management skills. So PS - one last effort to sell yourselves to the doubters would be welcome

 

[ProSpreads]

OK so please can PS confirm that this is the only time when they don't hedge. If so, when they get an order, I wonder how long they sit around waiting for an order in the opposite direction before they hedge, and whether this varies from client to client. What I'd really like to know is whether how they handle an order is automatic, depending only on that order and what other orders they have in, or whether it depends on the client's position or history or details in any way.

I have to say, I haven't heard anyone call PS a bunch of crooks, as many have called the ordinary-SB firms, especially in relation to always-against-the-clients'-interests disconnections etc. I haven't even heard that kind of thing about them from the kind of client who's probably blaming the broker or SB-firm for their own poor money-management skills. So PS - one last effort to sell yourselves to the doubters would be welcome

John

from the moment you select to buy/sell your order will be filled in around 100th of a second with zero dealer intervention, the platform has no manual input, with regards to auto hedge of a trade the software is very advanced so that we do not have to check on other clients orders

With regards to your second paragraph yes we dont really get much criticism and allways try to help clients rather than hinder them with disconnects and requotes

regards

ProSpreads

 

[johnnn]

John

from the moment you select to buy/sell your order will be filled in around 100th of a second with zero dealer intervention, the platform has no manual input, with regards to auto hedge of a trade the software is very advanced so that we do not have to check on other clients orders

Thanks for this, but when the software decides whether or not to hedge ASAP after receiving an order, does its decision depend on the client's position or history or details in any way? I.e. could the decision possibly vary according to which client the order came from? (Assume everything else to be identical).

 

[ProSpreads]

Thanks for this, but when the software decides whether or not to hedge ASAP after receiving an order, does its decision depend on the client's position or history or details in any way? I.e. could the decision possibly vary according to which client the order came from? (Assume everything else to be identical).

John

No never we have no interest in what client or what particular product they are trading

Regards

Prospreads