Spread betting at FXCM

[Black Swan]

Monty, no problem, glad to hear things have improved for you...regards FCXM I think Jason has answered all your money queries, as you know I never have bought into all that bitter bull re. SB firms being glorified bookies etc. However, given fxcm are the only one to put your order into the markets then IMHO they will gain more of a percentage of the newcomers to SB than any other firm out there; numbers that, according to the intelligence I've seen, are set to grow from 100,000 to 200,000 in the next 24 months. They were/are my preferred solution...

However, I'm more interested in dma than SB and over the past 5-6 months having educated myself on that. Particularly given you can open corporate accounts with fxcm, Alpari, Fx pro, and once proven gain even more support from your investors/shareholders, it was the way to go...

 

[Jack Hughes]

Ok, it's confirmed. The indices, oil, silver, and gold CFD's will be available for trading on the spread bet accounts starting Feb 21.

Do you know what the spreads will be yet? Also, although I can see how the 'direct access' hedging on FX might work, how is it applied to indices - is there still no dealing desk intervention?

 

[montmorencyt2w]

Hi Mike,

The micro account can be funded by debit card

That must be a recent-ish change then musn't it? When we were discussing this not so long ago, I seem to remember debit cards could only be used in exceptional cicumstances.
It was something about keeping costs down wasn't it?

And do you mean funded and refunded?

Thanks.

, credit card, or bank wire.

For the spreadbet accounts, you can deposit by credit/debit card,
bank wire, and paper cheque. Instructions found here http://www.fxcm.co.uk/depositing-funds.jsp .

-Jason

OK, well I am glad that it is possible to fund SB accounts by debit card, and I assume get refunds in the same way.

What charges and restrictions, if any, are placed on refunds?

Thank you.

 

[montmorencyt2w]

Monty, no problem, glad to hear things have improved for you...regards FCXM I think Jason has answered all your money queries, as you know I never have bought into all that bitter bull re. SB firms being glorified bookies etc. However, given fxcm are the only one to put your order into the markets then IMHO they will gain more of a percentage of the newcomers to SB than any other firm out there; numbers that, according to the intelligence I've seen, are set to grow from 100,000 to 200,000 in the next 24 months. They were/are my preferred solution...

And one I will almost certainly try at some point, although the time isn't right for me just now. Various reasons.

However, I'm more interested in dma than SB and over the past 5-6 months having educated myself on that. Particularly given you can open corporate accounts with fxcm, Alpari, Fx pro, and once proven gain even more support from your investors/shareholders, it was the way to go...

As a small private trader, SB still has big advantages to me.

Sounds like you are getting into / progressing through a much bigger league though!
Good luck, or rather, may the markets and the gods (be they mortals or immortals) of business smile upon you

 

[carlos b]

hi jason valco..thanks for your replies..

valco trading more lots is simply upping your stake/ risk is it not to net equal gain?

regardless of lot sizes the underlying issue i'm trying to elaborate on..is that 1 pip at another UK SB firm = 1 unit of any denomination in this case £'s - at jason's place it is equal to 0.64 of that.

i am a fan of fxcm..but this scenario is a minus for me especially with the amount of capital i have to play with..

cheer

cb

 

[Vaco]

carlos if you are short on funds then you are better off at fxcm as you will be risking 64p per unit move rather then £1 and in fact will be able to trade as low as 6p a unit which you are unable to do with other sb firms.

All other things been equal trading more lots will increase risk and reward in proportion.

so you have the flexibility to risk from as little as 6p per unit up to much more then you need worry about right now.

 

[carlos b]

hi valco.. i'm trying to grasp this but in simplistic terms. so you are saying that the risk reward ratio is still 1;1 ie risk £0.64p to gain £0.64p.. if thats the case i think i have been missing the point and thankyou for correcting me. i ws assuming that due to the currecncy conversion you were somehow trading in £'s risking a full £1 on a trade but the profit/ gain was only seeing £0.64 back when the dollar conversion was done. this is incorrect i take it?

cheers cb

 

[jonobrienuk]

hi valco.. i'm trying to grasp this but in simplistic terms. so you are saying that the risk reward ratio is still 1;1 ie risk £0.64p to gain £0.64p.. if thats the case i think i have been missing the point and thankyou for correcting me. i ws assuming that due to the currecncy conversion you were somehow trading in £'s risking a full £1 on a trade but the profit/ gain was only seeing £0.64 back when the dollar conversion was done. this is incorrect i take it?

cheers cb

Hi cb.

Yes you have been missing the point. For each trade you put on at 10k you are risking £0.64 ($1) per pip (point) and you will gain £0.64 (1$) per pip (point).

Jon.

 

[Vaco]

hi valco.. i'm trying to grasp this but in simplistic terms. so you are saying that the risk reward ratio is still 1;1 ie risk £0.64p to gain £0.64p.. if thats the case i think i have been missing the point and thankyou for correcting me. i ws assuming that due to the currecncy conversion you were somehow trading in £'s risking a full £1 on a trade but the profit/ gain was only seeing £0.64 back when the dollar conversion was done. this is incorrect i take it?

cheers cb

the bit in red is the correct statement

 

[carlos b]

cheers guys.. just testing and its vaco of course not valco.. sorry dude..

the currency conversion thing had me going there for some reason..

 

[Jason Rogers]

cheers guys.. just testing and its vaco of course not valco.. sorry dude..

the currency conversion thing had me going there for some reason..

Happy to see it's all cleared up

 

[Shakone]

HI Jason. First off thanks for being around and willing to answer questions. It makes me think highly of FXCM.

I have some questions.

Could you clarify that whether or not there is an Active Trader for spreadbetting, and indeed, what the typical spread would be on say GBPUSD or EURJPY between 8am and 9pm Uk time. I saw that you mentioned there was an active trader equivalent, but then mentioned that there would be a pip (or so) buffer added for the spreadbet (because of no commission) . But 1 pip added would in fact not be that big an improvement on the standard account, whereas the commission based active trader is an improvement. Is there a demo of the spreadbet version of active trader that can be tried out to see what the spreads are like?

Also, I have read that to get the active trader, you need either a certain amount of volume per month (10 million+) or you need to deposit 25k+. LEts say I trade quite often and could easily surpass the trade volume mark. Would I have to trade with the larger spreads for the first month (if I didn't deposit 25k), and after FXCM sees the volume, they then trigger the active trader spreads for the second month?

Finally, I also read that commissions are somewhat negotiable depending on volume traded. Does this mean that for spreadbet version the buffer you add onto the spread is also negotiable?

Thanks for your time.

 

[Jason Rogers]

Do you know what the spreads will be yet? Also, although I can see how the 'direct access' hedging on FX might work, how is it applied to indices - is there still no dealing desk intervention?

Hi Jack,

Just noticed I missed your question yesterday.

At the moment, the CFD contracts are not direct market access. The dealing desk is managing the risk; however, there are no re-quotes on our CFD products. The goal is to eventually have direct market access available for the CFD's, but that is something we are working on for the future.

The target spreads are listed in the product disclosure http://www.fxcm.co.uk/docs_pdfs/cfd_product_guide.pdf. Page 3 for stock indices, page 9 for oil, and page 16 for oil and silver. Will post some screenshots a little later, pressed for time at the moment.

-Jason

 

[Black Swan]

HI Jason. First off thanks for being around and willing to answer questions. It makes me think highly of FXCM.

I have some questions.

Could you clarify that whether or not there is an Active Trader for spreadbetting, and indeed, what the typical spread would be on say GBPUSD or EURJPY between 8am and 9pm Uk time. I saw that you mentioned there was an active trader equivalent, but then mentioned that there would be a pip (or so) buffer added for the spreadbet (because of no commission) . But 1 pip added would in fact not be that big an improvement on the standard account, whereas the commission based active trader is an improvement. Is there a demo of the spreadbet version of active trader that can be tried out to see what the spreads are like?

Also, I have read that to get the active trader, you need either a certain amount of volume per month (10 million+) or you need to deposit 25k+. LEts say I trade quite often and could easily surpass the trade volume mark. Would I have to trade with the larger spreads for the first month (if I didn't deposit 25k), and after FXCM sees the volume, they then trigger the active trader spreads for the second month?

Finally, I also read that commissions are somewhat negotiable depending on volume traded. Does this mean that for spreadbet version the buffer you add onto the spread is also negotiable?

Thanks for your time.

Active trader for SB? Next you'll be asking for Meta trader to take SB trades as well... Be great though eh? Yep you need £25K for Active. There are other accounts that don't give quite the low spreads and depth of market analysis/insight/opportunity (level2 etc) though for less in your account...
Jason'll be along to explain..

 

[Jason Rogers]

HI Jason. First off thanks for being around and willing to answer questions. It makes me think highly of FXCM.

I have some questions.

Could you clarify that whether or not there is an Active Trader for spreadbetting, and indeed, what the typical spread would be on say GBPUSD or EURJPY between 8am and 9pm Uk time. I saw that you mentioned there was an active trader equivalent, but then mentioned that there would be a pip (or so) buffer added for the spreadbet (because of no commission) . But 1 pip added would in fact not be that big an improvement on the standard account, whereas the commission based active trader is an improvement. Is there a demo of the spreadbet version of active trader that can be tried out to see what the spreads are like?

Also, I have read that to get the active trader, you need either a certain amount of volume per month (10 million+) or you need to deposit 25k+. LEts say I trade quite often and could easily surpass the trade volume mark. Would I have to trade with the larger spreads for the first month (if I didn't deposit 25k), and after FXCM sees the volume, they then trigger the active trader spreads for the second month?

Finally, I also read that commissions are somewhat negotiable depending on volume traded. Does this mean that for spreadbet version the buffer you add onto the spread is also negotiable?

Thanks for your time.

Hi Shakone,

The short answer is yes, Active Trader level spreads are available for spread bet accounts. The active trader program is intended to be a rewards program for high volume traders, so if you do a large enough volume on the spread bet account you are eligible as well.

To go over more details....the active trader program is applicable to multiple platforms we offer: FX Trading Station II, MetaTrader4, and Active Trader Platform. So you don't have to use the Active Trader platform if you're more comfortable with one of the other two. In fact, we are only able to setup active trader spread bet accounts on the FX Trading Station II platform.

The active trader status (raw spreads with commission) will only apply to the forex transactions. To qualify, your account needs to have either a $25,000 balance or a monthly minimum trading volume of 10 million notional. The commissions are negotiable based on your trading volume. The higher the trading volume, the more we will be willing to lower the commission since we're making up for it with more volume. As far as what it goes down to at which levels, that's something you'll need to negotiate with the Active Trader team.

LEts say I trade quite often and could easily surpass the trade volume mark. Would I have to trade with the larger spreads for the first month (if I didn't deposit 25k), and after FXCM sees the volume, they then trigger the active trader spreads for the second month?

Yes again! You can request the active trader setup if your trading volume meets the minimum in the first month. If you're coming from a competitor and can show from your prior trading statements you have a history of high volume trading, then you could also request active trader setup. The active trader team is pro-active about working with you in most cases.

-Jason

 

[Jason Rogers]

FYI, I will be away until next Wednesday (February 24th) which means I won't be posting on the thread until then. Best of luck with your trading!!!!

If you have any pressing questions for FXCM, please contact client services, or leave a message and I'll answer first thing next Wednesday!

:cheers:

Jason

 

[Truth Seeker]

Hi TruthSeeker,

On NDD execution, slippage does not translate into a greater amount of revenue for FXCM. Revenue on NDD execution is based off of trading volume rather than market making activities. FXCM makes the same pip mark-up amount whether the order is slipped or not.

The most common time you would see slippage occur is during a volatile period such as a news announcement. While there is a substantial amount of liquidity in the forex market as a whole, there are periods when that liquidity will dry up such as a news event.

The liquidity will also vary by currency pair. Take a look at this table from the Bank for International Settlement's 2007 survey:

Source: http://www.bis.org/publ/rpfxf07t.pdf?noframes=1

It lists the currency pairs with the most volume being transacted in them. Even pairs such as EUR/JPY, EUR/CHF, EUR/GBP only make up about 2% of daily trading volume each. (The BIS survey is scheduled to be updated later in 2010 last I heard.)

In the end, liquidity on any platform will only be as good as the liquidity being provided by the banks the broker has a relationship with. And the banks don't provide the same amount of liquidity or spread levels to each broker. Brokers negotiate with each bank for the spread and amount of liquidity provided at each spread level. FXCM currently has 10 banks providing pricing for our NDD execution.

-Jason

Jason

Just to clear up a few things. When I win with my trades, where does the money come from that's credited to my account? It's from your bottom line profits right? As you are an artificial market, what I win, you lose. If not, that must mean you hedge every single trade that is executed through your platform.

I'm sure you haven't the technical capabilities to do that. Why is it when my trade sizes grow alongside my account, the slippage and fun and games start?

Side note: Could you introduce a feature that saves limit and stop levels (in pips) to a default to save time when entering the market? Oanda does this, it's an excellent feature.

Thanks.

 

[montmorencyt2w]

Jason

Just to clear up a few things. When I win with my trades, where does the money come from that's credited to my account? It's from your bottom line profits right? As you are an artificial market, what I win, you lose. If not, that must mean you hedge every single trade that is executed through your platform.

I believe they do claim to do just that (although not I think for the micro account).

Side note: Could you introduce a feature that saves limit and stop levels (in pips) to a default to save time when entering the market? Oanda does this, it's an excellent feature.

I think their active trader interface does that.

 

[Vaco]

spread bet platform also does this, click on trading mode then change setting to 1 or 2 click and the tp and sl defaults can be amended in that box.

 

[Jason Rogers]

Jason

Just to clear up a few things. When I win with my trades, where does the money come from that's credited to my account? It's from your bottom line profits right? As you are an artificial market, what I win, you lose. If not, that must mean you hedge every single trade that is executed through your platform.

I'm sure you haven't the technical capabilities to do that. Why is it when my trade sizes grow alongside my account, the slippage and fun and games start?

Side note: Could you introduce a feature that saves limit and stop levels (in pips) to a default to save time when entering the market? Oanda does this, it's an excellent feature.

Thanks.

Hi Truth Seeker,

With No Dealing Desk execution, your profit comes from the bank taking the other side of your position. It doesn't come out of FXCM's bottom line. Every trade is hedged back to back with a bank on NDD. We have the technical capabilities to do this, and have done so since Nov. 2006.

The only forex trades we make a market for are on the micro accounts; however, even this may change eventually.

-Jason