If the account is segregated and "ring fenced" with a approved bank it should be save. But don't take my word for it, one should check it up personaly in order secure funds.
JTrader
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With worldspreads I have also had price move againt me quickly, i try to exit, do not get an instant fill, price then comes back to in my favour, and they offer me a price that i have 2-4 seconds to accept. I do not accept it, and i am still in the trade, and could, if i then wanted to, exit at a more favourable price.
This shows that worldspreads do not automatically fill you if price goes against you.
This shows that worldspreads do not automatically fill you if price goes against you.
I agree, in general, during my previous trading with WS I got the feeling they are not playing games. However, if you are put on referral to a dealer you are in their hands and they can trade against you. Also, it is almost impossible to get the referral to a dealer removed, even years later. WS does not follow the MiFID "Best execution" directive as they are banning certain traders by not giving them equal trading conditions.
Let's get back to basics. We must remember that any of the SB firms are just bookies, with all that that means. We are betting against their money. Of course they will have the whip hand.
I don't care what SB firm you use, they are all the same. As soon as you become regularly profitable, they will get the cosh out.
The only answer to this is to use futuresbetting.com. They're DMA, so you get instant fills and never any requotes. The reason as to why they can do this is because they hedge all your trades in the futures market. Therefore you're not in competition with them.
I can thoroughly recommend them in every way
I left them because my discipline was all to pieces because you bet in contracts and not pounds per point. It was all too rich for me and I lost money. At present I'm thinking all this over before returning to them, hopefully.
Just my twopennorth.
I don't care what SB firm you use, they are all the same. As soon as you become regularly profitable, they will get the cosh out.
The only answer to this is to use futuresbetting.com. They're DMA, so you get instant fills and never any requotes. The reason as to why they can do this is because they hedge all your trades in the futures market. Therefore you're not in competition with them.
I can thoroughly recommend them in every way
I left them because my discipline was all to pieces because you bet in contracts and not pounds per point. It was all too rich for me and I lost money. At present I'm thinking all this over before returning to them, hopefully.
Just my twopennorth.
They are expensive compared to trading futures, most of the SB traders are not willing to put in the money they require, both in deposit and stakes.
I'm the son of a bookie, and he bars successful punters from his shop.
Don't let the glamour of being associated to the world of finance fool you, spreadbetting firms are just betting shops. If you make money they will bar you, or (as I don't know the legality of barring you), make it impossible to trade so you can make a profit.
As 95-98% of punters (apparently) lose money, they will not hedge their bets on the market, they will just let the positions run, and with a ratio like that, will come out as winners in the long term. I believe that this is contrary to the belief that spread betting firms actively take positions against their clients in the markets. I can't comment on the veracity of that, but the person who told me about the lack of hedging is a friend who happens to be a hogs trader on the floor of the CME. He also runs his own FX brokerage firm so I kind of belive him as he probably knows what he's talking about!
Don't let the glamour of being associated to the world of finance fool you, spreadbetting firms are just betting shops. If you make money they will bar you, or (as I don't know the legality of barring you), make it impossible to trade so you can make a profit.
As 95-98% of punters (apparently) lose money, they will not hedge their bets on the market, they will just let the positions run, and with a ratio like that, will come out as winners in the long term. I believe that this is contrary to the belief that spread betting firms actively take positions against their clients in the markets. I can't comment on the veracity of that, but the person who told me about the lack of hedging is a friend who happens to be a hogs trader on the floor of the CME. He also runs his own FX brokerage firm so I kind of belive him as he probably knows what he's talking about!
It would be nice if it were that simple. Each firm is different, and within each firm different clients are treated differently.
Every SB hedges to some extent, so it's not the same game as a racecourse bookie (unless he lays off his exposure). There are generally decent markets in which they can hedge. Largely, the firm won;t really care what each client's position is individually unless they're scalping slow prices, arbing or somehow trading on prices which can't be hedged. The firm will then run set limits in stocks, sectors and indices. If you're long and so is the SB's book, they'll be happy for you to make money as they'll be making more.
Some companies (like CMC) will run A and B books. A book would be the majority of smaller clients who generally lose, and so don't need to be hedged. Large -or consistently good- clients will have their positions fed into the B book which would probably be fully hedged. These are the clients on 'dealer referral'; if the SB can't get the price, they won't pass it on. Some firms probably also run a C book of consistent winners whose positions they overhedge.
Every SB hedges to some extent, so it's not the same game as a racecourse bookie (unless he lays off his exposure). There are generally decent markets in which they can hedge. Largely, the firm won;t really care what each client's position is individually unless they're scalping slow prices, arbing or somehow trading on prices which can't be hedged. The firm will then run set limits in stocks, sectors and indices. If you're long and so is the SB's book, they'll be happy for you to make money as they'll be making more.
Some companies (like CMC) will run A and B books. A book would be the majority of smaller clients who generally lose, and so don't need to be hedged. Large -or consistently good- clients will have their positions fed into the B book which would probably be fully hedged. These are the clients on 'dealer referral'; if the SB can't get the price, they won't pass it on. Some firms probably also run a C book of consistent winners whose positions they overhedge.
Maybe you should withdraw one every few days if you continue winning.
As long as the money is back into your account it's safer then in somebody else's
Lee Shepherd
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Again, another post that smells of sour grapes from a losers point of view.
Conventional bookies are a totally different ball game to Speadbetting companies.
You may be the son of a bookie but I am a full time spreadbettor of over 4 years. I averaged 25 contracts weekly last year and am currently trading around 50 contracts weekly at present. (due to market conditions)
I also make money consistanly from this to pay my lifestyle. I have not yet been banned from anywhere, in fact, I have contacts with other spreadbetting companies that want my business.
SB's, dont have to hedge their bets if their books are 50-50, ie, 50% are long, 50% are short, they will only hedge the difference if they feel (based on their tech trading teams) the need to do so. As long as the books remain around 50-50, it becomes a pure cash cow. They take from one, deduct the spread and pay the other, and around it goes.
If they are, like take the extreme and say 100% client long, they can just take the whole lot to market and do as the client has traded, if the outcome is they both win, the market pays the SB, the SB pays the client (less the spreads). If they both lose, the client pays the SB, the SB pays the market, again less the spreads. In this extreme instance its possible that the SB could be, and I stress, could be, out of pocket, but then again, this is the extreme case and is left entirely up to the tech trading teams to make educated decision's based in real time trading, the client/s could pull out short of a few ticks in the SB's favour or get in too early, also the spreads are more than DMA. It couldn't get any more extreme than that as 100% is the maximum.
Remember, it's mostly individual's trading on an account, SB's have a whole specialist team or collective force to make sure they consistantly make money through way of spreads and, if needed, direct to market.
This is how SB's can hedge themselves and make money hand over fist, I do not know how standard bookies hedge themselves, maybe you could enlighten me.
SB, will simply hedge themselves (if needed) against the underlying market.
So, How does a conventional bookie hedge themselves against a winning client against horses, football matches and the like?
EDIT: I also notice something extremely strange beyond reason here, you also have an account with spread betting companies, namely, Finspreads. If what you say is true from above, why in Gods name would you not go DMA. WTF.
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Yes, a controlled risk management system is an important part of a successful SB operation. There are a few SB companies that have failed considerably in this regard, they have paid a hefty price for not having a healthy risk management program incorporated in their business model. WS themselves had a serious risk issue and incurred losses a year ago, proving that their risk management setup did not work. However, all is not well in the SB industry and more strict regulation is needed, especially when it comes to the "Best execution" policy. The EU MiFID financial directives are a first step in this direction.
Lee,
Not often I disagree with you. BUT, if you take very quick trades in for a minute or two the spreadbet companies don't want your business. A guy I know who works at CMC has said basically if you try doing that in any size they just won't fillyou.
The way you trade gives a spreadbet company plenty of time to cover their asses, where as someone who jumps in for a minute or two you literally take the cash out the SB firms back pocket.
I only say this because when I spoke with WS to find out what the issues were. I was told that they didn't like the fact I was only in a trade for a minute or two and they were finding it hard to hedge me. Weather this is true or not I don't know but I only had problems once I built up to £5 a point on the dow. AT £1 I was trading the same way with no problems.
If I now try and place a £1 a point trade it takes them ages to fill the trade and I have been told catergorically that I am now on Dealer Referral.
Lee Shepherd
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Hi ya mate,
Not sure your post goes against me in anyway, maybe your post should be an add on to mine in respect to the fact that what you have posted is correct.
It must be noted that anyone trying to scalp (in and out for a few ticks within seconds/minutes) wont be favoured for by the spread bet companies.
For this type of trading I would always recommend going direct to market.
They dont hedge your bets or mine because they are too small. It's an excuse that they use to get rid of scalpers or put them on dealer referral. Reason they dont hedge: they know they will clean up most of the punters so why hedge and give away the profits to somebody else.
