zigglewigler
Well-known member
- Messages
- 346
- Likes
- 50
Why would anyone expect the majority of people to make money in the markets, irrespective of the instrument they use? Nobody makes a penny unless somebody somewhere loses a penny. 97% lose or 50%, who cares. Nobody promised it was going to be easy. It's a little churlish to blame the SB firms. I sense the whiff of daytrader resentment.
You all remember the daytrader in the US that walked into the brokerage with a gun and shot everyone because he lost $50k of his life's savings. He should have shot himself first, but that would have meant accepting responsibility.
How exactely are the SB companies forcing you to lose money? All they are doing is beating you at a game you agreed to play.
Casinos make money off of smucks, you can't beat them at Blackjack unless you are a good card counter. Well making money in the markets means you have to be good, not lucky, deserving, hopeful, desperate, etc, but 'good' requires effort and that's probably the problem.
From the web:
Sounds familiar doesn't it?
And, if the market as a whole is a zero sum game, then the mass of liquidity supplied by the majority, ends up in the hands of the minority, 100% in, 100% out, in perfect balance. What more could you want?
You all remember the daytrader in the US that walked into the brokerage with a gun and shot everyone because he lost $50k of his life's savings. He should have shot himself first, but that would have meant accepting responsibility.
How exactely are the SB companies forcing you to lose money? All they are doing is beating you at a game you agreed to play.
Casinos make money off of smucks, you can't beat them at Blackjack unless you are a good card counter. Well making money in the markets means you have to be good, not lucky, deserving, hopeful, desperate, etc, but 'good' requires effort and that's probably the problem.
From the web:
Sounds familiar doesn't it?
And, if the market as a whole is a zero sum game, then the mass of liquidity supplied by the majority, ends up in the hands of the minority, 100% in, 100% out, in perfect balance. What more could you want?
I remember a couple of years ago, I was looking to short the US stock AMAT... on checking my SB price.. it wasn't near.. AMAT started dropping, SB didn't for a while. AMAT dropped 50c, the SB dropped approx 30 c. In my mind, was... if AMAT bounces, the SB will reverse its bias and I'm done for..
The penny dropped.. why am I giving myself 2 problems...1. the stock direction and 2. what will MY 'broker' do. Its hard enough getting the stock direction right.
So I immediately closed the SB and opened my IB account.
(I accept the SB companies right to make money, my trading mistakes on other occassions and maybe an incorrect strategy to trade with a SB'er)
The penny dropped.. why am I giving myself 2 problems...1. the stock direction and 2. what will MY 'broker' do. Its hard enough getting the stock direction right.
So I immediately closed the SB and opened my IB account.
(I accept the SB companies right to make money, my trading mistakes on other occassions and maybe an incorrect strategy to trade with a SB'er)
What an excellent thread!! and lots of well considered contributions. It seems that the winner/loser ratio stumped up by The Times has drawn the reasoning into the final analysis: whether you win or lose is determined by what happens between YOUR ears!! It seems that most of us - including me - have still got a lot of work to do, mostly with the raw material, that between our ears that is.
Interesting observation Cigar, just bear in mind that the SB companies are just another form of futures - they are laying off the bets placed with them on the real market - assuming of course that they are honest, non price manipulators, etc.
Keep it coming chaps, and thank you ZW for your openess.
Alan
Interesting observation Cigar, just bear in mind that the SB companies are just another form of futures - they are laying off the bets placed with them on the real market - assuming of course that they are honest, non price manipulators, etc.
Keep it coming chaps, and thank you ZW for your openess.
Alan
TheBramble
Legendary member
- Messages
- 8,394
- Likes
- 1,170
ragl said:
ragl - don't know just how firmly your tongue was pressed into your cheek with that one, but in my experience and to my knowledge, very little of the SB's punters' bets get hedged.
capitalspreads
Experienced member
- Messages
- 1,452
- Likes
- 79
re hedging
I always love this argument as to whether an SB company hedges a bet.
If an SB client makes a bet it frankly makes b*****r all difference if the SB company hedges, or not, to what happens in the market.
The volumes concerned, in general, dwarf the SB business by such massive margins that it would be impossible to spot whether a hedge had gone in or not. Frankly if a client buys (or sells) a market an SB company is in the main hoping that a) the client is wrong or b) another client has the equal and opposite opinion and takes him out of his position. Either way the SB will win, the only way the SB will lose is if the client gets it right in such size as to damage the odds (in the long run unlikely) and he has not hedged and the market moves big time. All of which is unlikely because the SB traders are professionals and do not run loss making positions.
In some small shares clients seem to find it offensive that on level two they can see that the SB company has not hedged a bet as though this in some way this would validate the trade they have just made. Some traders seem to think this is an insult to them that the SB company did not think their bet worth hedging as though the SB company believed that that particular trader was useless. What do people think Market Makers do ? Just turn round and sell (or buy) whatever position is given to them. Imagine you made a bet on the favorite in the 2.30 at Cheltenham you would hardly expect William Hill to blink an eye until the total risk reached a level that forces them to change their odds (thus, by the way, encouraging further punters to place any further bets with a competitor) in the same way an SB company may bias thier price.
Aside from perceived bad faith on trades (which may lose a few pips at worst) the main problem for SB clients seems to be that the SB companies make money. Forgive me for saying so but you could have exactly the same conversation with hundreds of punters inhabiting every bookie shop from Lands End to John O'Groats.
As I keep on saying on this, and other, discussion boards. Always ensure that your stop losses are less than the level you are looking for on your profits. AND STICK TO IT. If you are willing to run a hundred point loss on a position but take only 15 point profit you will always lose in the end. Believe me this is not a stupid observation, we see it all the time.
If trading was easy why do you think that major banks (investment houses) pay their top traders so much? I can assure you it is not through charity. It is because they recognise that the ability to make huge sums from a standing start is a rare talent that must be nurtured lest it moves to a more rewarding nest. People talk about 90% or 97%, or whatever, traders who lose, imagine how small the percentage is for serious winners!!
SB companies will hedge when the risk seems too great and otherwise will not. At the end of the day they pit their wits, not against the clients, but along with everyone else against the markets.
The idea that somehow the SB companies can in any way affect market prices is laughable.
Simon
By the way
Cigar
Do you really think that an SB company has time to look at one share amid thousands and bias thier price?
If the SB company was quoting the wrong price just trade with them on the wrong price and then trade with somebody else on what you percieve to be the right one. Instant profit. What on earth do you think arbitrage traders do?
I always love this argument as to whether an SB company hedges a bet.
If an SB client makes a bet it frankly makes b*****r all difference if the SB company hedges, or not, to what happens in the market.
The volumes concerned, in general, dwarf the SB business by such massive margins that it would be impossible to spot whether a hedge had gone in or not. Frankly if a client buys (or sells) a market an SB company is in the main hoping that a) the client is wrong or b) another client has the equal and opposite opinion and takes him out of his position. Either way the SB will win, the only way the SB will lose is if the client gets it right in such size as to damage the odds (in the long run unlikely) and he has not hedged and the market moves big time. All of which is unlikely because the SB traders are professionals and do not run loss making positions.
In some small shares clients seem to find it offensive that on level two they can see that the SB company has not hedged a bet as though this in some way this would validate the trade they have just made. Some traders seem to think this is an insult to them that the SB company did not think their bet worth hedging as though the SB company believed that that particular trader was useless. What do people think Market Makers do ? Just turn round and sell (or buy) whatever position is given to them. Imagine you made a bet on the favorite in the 2.30 at Cheltenham you would hardly expect William Hill to blink an eye until the total risk reached a level that forces them to change their odds (thus, by the way, encouraging further punters to place any further bets with a competitor) in the same way an SB company may bias thier price.
Aside from perceived bad faith on trades (which may lose a few pips at worst) the main problem for SB clients seems to be that the SB companies make money. Forgive me for saying so but you could have exactly the same conversation with hundreds of punters inhabiting every bookie shop from Lands End to John O'Groats.
As I keep on saying on this, and other, discussion boards. Always ensure that your stop losses are less than the level you are looking for on your profits. AND STICK TO IT. If you are willing to run a hundred point loss on a position but take only 15 point profit you will always lose in the end. Believe me this is not a stupid observation, we see it all the time.
If trading was easy why do you think that major banks (investment houses) pay their top traders so much? I can assure you it is not through charity. It is because they recognise that the ability to make huge sums from a standing start is a rare talent that must be nurtured lest it moves to a more rewarding nest. People talk about 90% or 97%, or whatever, traders who lose, imagine how small the percentage is for serious winners!!
SB companies will hedge when the risk seems too great and otherwise will not. At the end of the day they pit their wits, not against the clients, but along with everyone else against the markets.
The idea that somehow the SB companies can in any way affect market prices is laughable.
Simon
By the way
Cigar
Do you really think that an SB company has time to look at one share amid thousands and bias thier price?
If the SB company was quoting the wrong price just trade with them on the wrong price and then trade with somebody else on what you percieve to be the right one. Instant profit. What on earth do you think arbitrage traders do?
Last edited:
Trader333
Moderator
- Messages
- 8,746
- Likes
- 1,025
I dont think that this statement was what people were saying. It is that SB companies will often move their own quote around to take out client stops and this quote is often a country mile away from where the market is actually trading.
I dont use SB companies but I know quite a few who do and many have got into ongoing arguments about stops being taken out when the market didnt trade at the price the SB company activated it at. Often these only get resolved if the client proves (with their own realtime datafeed) that the market was no where near the price which the SB company was quoting.
Frankly the fact I have seen this happen to so many of my colleagues means that I would only ever consider a SB company for position trading and never for intra-day trading.
Paul
ZERO SUM GAME
It can't be - can it? Nearly but not quite.
Dealing charges and commissions should be deducted from the overall pool of funds from both parties.
Winners win slightly less than the losers lose - the only sure winners are the intermediaries.
It can't be - can it? Nearly but not quite.
Dealing charges and commissions should be deducted from the overall pool of funds from both parties.
Winners win slightly less than the losers lose - the only sure winners are the intermediaries.
Zero sum ....
you can think of it as strip out the costs of making the market and by default you are left with zero sum where there must be a balance between winners and losers...
or
A minus sum game
which is simply that what comes out (winnings) will always be less than simple traders losses again stripping out costs of making markets from losses and winnings.
It's all a bit irrelevant other than it should focus your mind on the need to minimise losses and the costs of doing business .
Cheers
you can think of it as strip out the costs of making the market and by default you are left with zero sum where there must be a balance between winners and losers...
or
A minus sum game
which is simply that what comes out (winnings) will always be less than simple traders losses again stripping out costs of making markets from losses and winnings.
It's all a bit irrelevant other than it should focus your mind on the need to minimise losses and the costs of doing business .
Cheers
zigglewigler
Well-known member
- Messages
- 346
- Likes
- 50
Fastnet
The intermediaries are part of the winning group, in the zero sum game the successful traders and the 'intermediaries' are in opposition with the losers. It balances.
In a gold rush the guy selling the shovel always makes money. Would you rather dig with your hands?
Capitalspreads
Hallelujah!
The intermediaries are part of the winning group, in the zero sum game the successful traders and the 'intermediaries' are in opposition with the losers. It balances.
In a gold rush the guy selling the shovel always makes money. Would you rather dig with your hands?
Capitalspreads
Hallelujah!
Of course it is a minus sum game. You have to take account of the costs of providing the exchanges, brokers and other intermediaries. Who do you think pays for all those salaries. Us of course. Ever seen a poor broker?
Does that mean it is a pointless exercise trading.
No, it just means you have to be very particular and only go after the very best opportunities. I assume I am going to lose, until the market proves otherwise. Means I keep my losses very very small ( by only starting any position with a single unit), but when I get it right I go will a full committment (full position size)
Does that mean it is a pointless exercise trading.
No, it just means you have to be very particular and only go after the very best opportunities. I assume I am going to lose, until the market proves otherwise. Means I keep my losses very very small ( by only starting any position with a single unit), but when I get it right I go will a full committment (full position size)
stevespray
Experienced member
- Messages
- 1,289
- Likes
- 156
Simon – I would have to agree with what Paul (Trader333) has said after your last post. You seem to be misunderstanding the arguments that people are making. It was myself who said that I’d monitored certain spreadbet companies to see if they were hedging off my positions and I can assure you that I am in no way insulted if that company chooses to ‘bucket’ my position (ie hold it themselves). The point I was raising was one which is very valid when dealing in stocks where depth of market is considered an issue. I have simply stated that there is a problem for the spreadbet company if it takes an order on such a stock and fails to lay it off in the underlying. The problem exists because the neither the price of the stock or the order book will have altered and therefore that customer or any other customer surely has the right to deal at the current market price at any given moment in time. All I have done is to point out that spreadbet companies take issue with this but are then unable to give a satisfactory explanation on how they expect customers to act when such a situation arises.
Another problem, as I have outlined before, is where the spreadbet company says in its T&C that it “has the right to vary the price of its market more than the underlying”, whilst a few terms latter says that “We reserve the right to cancel a bet if we see that its been filled at the wrong price” – I have therefore asked the question “How is a customer expected to know if a company is advertising a ‘wrong price’ or just ‘a price which is varying from the underlying’ ?”
Obviously what you say about bookmakers is correct. At the end of the day ‘bookies’ are in business to make money and earn a living just like anyone of us and the S/B co’s are no different but this doesn’t give them the god given right to make a profit come the end of the day. Whilst your goal is to turn a profit and pay staff etc this doesn’t always work out and business go to the wall every day. As a market maker a spreadbet company can only make money (unless it trades for itself) if people place trades with them. If no one traded then you would have no chance of making any money. As, with most of the spreadbetting companies, your exact methods of how you generate these profits are unclear, different companies say different things and people from some companies say different things about other companies so from the punters point of view it is all very unclear. However, as you have already pointed out, this doesn’t really matter to the punter at the end of the day because the position is with the spreadbet company regardless.
If we can return to the subject of those profits. As has already been discussed, these profits can be generated in a number ways but the most obvious are simply by having more losing punters (cash value) than winning ones. Another way is to hedge all positions and simply make you money on the spread, in order to do this you either have to be very quick to lay off positions or have very large spreads. The bottom line is that by what ever way you choose you are attempting to make your money as a market maker or ‘middle-man’. What I have attempted to point out in few of my previous posts is that the business of the ‘middle-man’ does carry certain risks, many people would argue that that is how you earn your money. All I have done is to point out that I have noticed that most of these spreadbet companies attempt to cover these risks by a series of Terms and Conditions that are written in the customer agreements. Terms and Conditions such as being able to ‘vary its market’ and ‘cancel trades after it has excepted them’. These are not situations which are allowable in the real market yet you expect us to except that from the S/B Co’s. These are just simple illustrations of how S/B Co’s gain unfair advantages over customers. There are other ways that have been clearly illustrated by others such as being held and then requouted if the situation suites the S/B Co. again, a situation which is to the detriment of the customer.
So, as you can see, its not the fact that the spreadbet companies make money which is the problem, it’s the methods that they use to do it. The companies only use these methods because they find it more financially rewarding than not. This is what annoys most of the more experienced traders who post. It’s the lack of professionalism which is encountered. It’s the way that the S/B Companies want everything their own way and nothing benefits the company. It’s no wonder so many punters are reported as losing the cash, the clever ones simply don’t trade with you guys (the spreadbetting companies as a whole) because they know all the tricks which go on.
Steve.
Another problem, as I have outlined before, is where the spreadbet company says in its T&C that it “has the right to vary the price of its market more than the underlying”, whilst a few terms latter says that “We reserve the right to cancel a bet if we see that its been filled at the wrong price” – I have therefore asked the question “How is a customer expected to know if a company is advertising a ‘wrong price’ or just ‘a price which is varying from the underlying’ ?”
Obviously what you say about bookmakers is correct. At the end of the day ‘bookies’ are in business to make money and earn a living just like anyone of us and the S/B co’s are no different but this doesn’t give them the god given right to make a profit come the end of the day. Whilst your goal is to turn a profit and pay staff etc this doesn’t always work out and business go to the wall every day. As a market maker a spreadbet company can only make money (unless it trades for itself) if people place trades with them. If no one traded then you would have no chance of making any money. As, with most of the spreadbetting companies, your exact methods of how you generate these profits are unclear, different companies say different things and people from some companies say different things about other companies so from the punters point of view it is all very unclear. However, as you have already pointed out, this doesn’t really matter to the punter at the end of the day because the position is with the spreadbet company regardless.
If we can return to the subject of those profits. As has already been discussed, these profits can be generated in a number ways but the most obvious are simply by having more losing punters (cash value) than winning ones. Another way is to hedge all positions and simply make you money on the spread, in order to do this you either have to be very quick to lay off positions or have very large spreads. The bottom line is that by what ever way you choose you are attempting to make your money as a market maker or ‘middle-man’. What I have attempted to point out in few of my previous posts is that the business of the ‘middle-man’ does carry certain risks, many people would argue that that is how you earn your money. All I have done is to point out that I have noticed that most of these spreadbet companies attempt to cover these risks by a series of Terms and Conditions that are written in the customer agreements. Terms and Conditions such as being able to ‘vary its market’ and ‘cancel trades after it has excepted them’. These are not situations which are allowable in the real market yet you expect us to except that from the S/B Co’s. These are just simple illustrations of how S/B Co’s gain unfair advantages over customers. There are other ways that have been clearly illustrated by others such as being held and then requouted if the situation suites the S/B Co. again, a situation which is to the detriment of the customer.
So, as you can see, its not the fact that the spreadbet companies make money which is the problem, it’s the methods that they use to do it. The companies only use these methods because they find it more financially rewarding than not. This is what annoys most of the more experienced traders who post. It’s the lack of professionalism which is encountered. It’s the way that the S/B Companies want everything their own way and nothing benefits the company. It’s no wonder so many punters are reported as losing the cash, the clever ones simply don’t trade with you guys (the spreadbetting companies as a whole) because they know all the tricks which go on.
Steve.
zigglewigler
Well-known member
- Messages
- 346
- Likes
- 50
Stevespray
The SB firms are under no obligation to supply spreads anywhere near the underlying if it jeopardises their financial health. Through 2002 if you were trading the Dow, you would often find the spread 100+ points away from the actual market price, with the huge(by today's standards) daily ranges and big moves, people would come charging in taking positions, that the SB firms could clearly see were 'right'. If the Dow for example, broke off in a particular direction, everyone bet on that direction, offering a spread around the underlying would mean a huge loss, as there were few positions of opposing clients to hedge the firm's position, so the spread is moved away. This is because SB firms operate their bank balance as bookmakers do. They have an over-round, if it's 130% as is sometimes the case at the races, then the 100% represents total money in from the punters, the 30% is their profit, no matter which horse comes in. If suddenly a whole heap of money is placed on a horse, the odds are shortened on that horse, with possibly odds being lengthened on other horses, to balance the over-round. Odds are not a reflection of which horse the bookies think is going to win, but a means of balancing the books so that profit is always there. With bookmakers there is no underlying. You bet against the bookmaker's money, which is mostly a pool of other punters' money. The spread quoted by the SB firms moves in a similar way to bookies' odds, in brisk trade the popular indexes' spreads hop about like mad, as the total pool of short/long bets is balanced. If there are too many long bets, the spread moves up to take value out of the market as far as the client/punter is concerned. They must do this or go bust. Well, that's how I understand it anyway.
Steve, are you suggesting that SB firms can only make their money by re-quotes and forced out stops? They wouldn't make enough that way. They just need most people to do what most people do. To do things badly. Bookmakers always make money, only a few punters do. That is not because of deceit, but lack of skill. I don't know the ins and outs of professional sports gambling, but in basic terms they look for value, odds that underestimate the chance of a particular winner. They also know their game, you have to understand the sport you're betting on. Well it's the same in the financial markets. You have to understand how they work, most people that spread bet are clueless. I use spread bets as a trading instrument with all its vagaries, and trade it only when it offers value. I understand the markets I trade. You have to have those skills in place. My losing trades have always been my fault, not because the SB firm suddenly moved the spread into a losing position, running my stops. If you are stupid enough to trade a fast moving market, with excessive spread in relation to the target on the trade, and being therefore dependant on a tight relationship with the underlying, then frankly it's your fault for being a consistent loser. If you are a day trader trying to scalp these tight markets for a few points here and there against a fat spread, you will lose. Day traders need instant execution tight to the underlying. Since the SB firms are not taking your position to the 'market', it has to be hedged on other clients' positions, this causes too much short-term movement by the spread, and of course that's no good for day trading.
Scalping the markets on short-term moves looks easy. And hence attracts alot of hopefuls. When the Internet went mainstream and allowed easy access to the markets, just about every American fancied themselves as a day trader. Most were fleeced on the 'proper' markets because they didn't have the skills. Once fleeced they didn't have an appetite for learning the business. This was not the fault of any brokerage. Most who are new to the financial markets believe it will be easy and put in the commensurate level of effort and study.
The original question on this thread asked if anyone actually makes money spread betting, as 97% apparently don't. If Steve you have failed to make money yourself with SB firms, then you have two explanations; they ripped you off or you were trading the wrong markets, in the wrong time frames with the wrong system. If you have never traded using SB's then your opinion, though interesting, is slightly unhelpful. You are looking for a conspiracy of sorts, which doesn't exist. The SB firms are not the middle-men, rather the opposition, you take money from them. They are not going to give it to you with a compliment slip. Anyone who is new to this business just needs to know that it isn't easy and is not meant to be. Up your game!
The SB firms are under no obligation to supply spreads anywhere near the underlying if it jeopardises their financial health. Through 2002 if you were trading the Dow, you would often find the spread 100+ points away from the actual market price, with the huge(by today's standards) daily ranges and big moves, people would come charging in taking positions, that the SB firms could clearly see were 'right'. If the Dow for example, broke off in a particular direction, everyone bet on that direction, offering a spread around the underlying would mean a huge loss, as there were few positions of opposing clients to hedge the firm's position, so the spread is moved away. This is because SB firms operate their bank balance as bookmakers do. They have an over-round, if it's 130% as is sometimes the case at the races, then the 100% represents total money in from the punters, the 30% is their profit, no matter which horse comes in. If suddenly a whole heap of money is placed on a horse, the odds are shortened on that horse, with possibly odds being lengthened on other horses, to balance the over-round. Odds are not a reflection of which horse the bookies think is going to win, but a means of balancing the books so that profit is always there. With bookmakers there is no underlying. You bet against the bookmaker's money, which is mostly a pool of other punters' money. The spread quoted by the SB firms moves in a similar way to bookies' odds, in brisk trade the popular indexes' spreads hop about like mad, as the total pool of short/long bets is balanced. If there are too many long bets, the spread moves up to take value out of the market as far as the client/punter is concerned. They must do this or go bust. Well, that's how I understand it anyway.
Steve, are you suggesting that SB firms can only make their money by re-quotes and forced out stops? They wouldn't make enough that way. They just need most people to do what most people do. To do things badly. Bookmakers always make money, only a few punters do. That is not because of deceit, but lack of skill. I don't know the ins and outs of professional sports gambling, but in basic terms they look for value, odds that underestimate the chance of a particular winner. They also know their game, you have to understand the sport you're betting on. Well it's the same in the financial markets. You have to understand how they work, most people that spread bet are clueless. I use spread bets as a trading instrument with all its vagaries, and trade it only when it offers value. I understand the markets I trade. You have to have those skills in place. My losing trades have always been my fault, not because the SB firm suddenly moved the spread into a losing position, running my stops. If you are stupid enough to trade a fast moving market, with excessive spread in relation to the target on the trade, and being therefore dependant on a tight relationship with the underlying, then frankly it's your fault for being a consistent loser. If you are a day trader trying to scalp these tight markets for a few points here and there against a fat spread, you will lose. Day traders need instant execution tight to the underlying. Since the SB firms are not taking your position to the 'market', it has to be hedged on other clients' positions, this causes too much short-term movement by the spread, and of course that's no good for day trading.
Scalping the markets on short-term moves looks easy. And hence attracts alot of hopefuls. When the Internet went mainstream and allowed easy access to the markets, just about every American fancied themselves as a day trader. Most were fleeced on the 'proper' markets because they didn't have the skills. Once fleeced they didn't have an appetite for learning the business. This was not the fault of any brokerage. Most who are new to the financial markets believe it will be easy and put in the commensurate level of effort and study.
The original question on this thread asked if anyone actually makes money spread betting, as 97% apparently don't. If Steve you have failed to make money yourself with SB firms, then you have two explanations; they ripped you off or you were trading the wrong markets, in the wrong time frames with the wrong system. If you have never traded using SB's then your opinion, though interesting, is slightly unhelpful. You are looking for a conspiracy of sorts, which doesn't exist. The SB firms are not the middle-men, rather the opposition, you take money from them. They are not going to give it to you with a compliment slip. Anyone who is new to this business just needs to know that it isn't easy and is not meant to be. Up your game!
donaldduke
Experienced member
- Messages
- 1,665
- Likes
- 258
zigglewigler,
Excellent post!
Like ive already said, our own trading mistakes will probably
cost us 100 times more than any slipage as a result of a bad fill or
a stop being taking out..
At the end of the day blaming others for anything to do with
your own trading serves no helpful purpose and is probably
detrimental to your own psyche..
SB is tax free!! I say enjoy it while it lasts and dont complain,
It might not be available 5 years from now.
There is alot of tax free money to be made for those who are up
to the challenge!
Excellent post!
Like ive already said, our own trading mistakes will probably
cost us 100 times more than any slipage as a result of a bad fill or
a stop being taking out..
At the end of the day blaming others for anything to do with
your own trading serves no helpful purpose and is probably
detrimental to your own psyche..
SB is tax free!! I say enjoy it while it lasts and dont complain,
It might not be available 5 years from now.
There is alot of tax free money to be made for those who are up
to the challenge!
stevespray
Experienced member
- Messages
- 1,289
- Likes
- 156
Zig / Don - I'm not disputing what you guys are saying. The fact is that I have a lot of money through spreadbetting over the last 2 years. I have many strategies and profits don’t come from one particular area. The points I am making are not based on 'sour grapes' although I understand where you are coming from. The points I make are however based on experiences with the spreadbetting companies which have more or less forced me over to direct access (save a few 'punts' now and again). These experiences are for the most part as a result of 'sharp practices' or downright cheating by the various companies. In the recent complaint I have against IG it is clear that they have sought to cheat their way out of paying me a large win. I still won anyway, it just wasn’t as big as it should have been. It's all very well about talking about them swinging their prices etc but the fact is that when the circumstances suite them they'll act in a manner to catch you out, in my case it was keeping me in a queue for almost a minute then claiming I couldn’t have the price because while I was in that queue the market had moved somewhat, they even admit that the price was correct when I submitted the order. This isn’t the service the T&C say I'll receive nor is it what they advertise. I know what goes on at these places, its simple, and if you read the background of the 'bucket shops' you'll learn all the tricks that can go on, its the same evolutionary cycle happening again 100 years later, as you say, bought about by the internet. The ‘lets keep the customer waiting and see which way the market moves’ trick has to be the oldest in the book. You try ringing dealing and asking if you can have almost one minute to think the quote over, see what response you get. It’s all very well asking about winners and losers, the reason that there are so few winners is because the winners get detected and are then subject to rogue practices, these winners then correctly note that the playing field is becoming more and more angled and quickly leave, again a repeat of what happened to successful ‘bucket shop’ traders in the late 1880’s. Most people who are successful in this game are only successful by a few percentage points spread over a long period of time. As I said in a previous post, the reason people fail is because the fail to correctly determine risk over an extended period of time. This risk of ‘rogue practice’ is a clear and present danger to your capital over an extended period of time, it can turn systems which are successful into ones which lose money by simply tweeking the odds without the customer seeing the dangers.
Steve.
Steve.
zigglewigler
Well-known member
- Messages
- 346
- Likes
- 50
Steve
I'm glad you've clarified your particular experiences, was it a queue encountered while trying to telephone your order, or was it whilst waiting for a dealer to respond via trading platform? What was their excuse, simply a rush of clients trying to get orders in? I can't say I've ever experienced this, all my stops orders have been executed, I never force-close a losing position, I trail the stop to lock the profits in and sometimes force-close winners if I know I've hit the optimum. But my targets are big and the action slower than the main indexes.
Concerning your complaint, which market were you trading and on what time frame etc.? I don't doubt what you say, but it would be helpful to all, if you would describe the situation a little more in detail, and perhaps we could get the official response from the firm in question.
I'm glad you've clarified your particular experiences, was it a queue encountered while trying to telephone your order, or was it whilst waiting for a dealer to respond via trading platform? What was their excuse, simply a rush of clients trying to get orders in? I can't say I've ever experienced this, all my stops orders have been executed, I never force-close a losing position, I trail the stop to lock the profits in and sometimes force-close winners if I know I've hit the optimum. But my targets are big and the action slower than the main indexes.
Concerning your complaint, which market were you trading and on what time frame etc.? I don't doubt what you say, but it would be helpful to all, if you would describe the situation a little more in detail, and perhaps we could get the official response from the firm in question.
donaldduke
Experienced member
- Messages
- 1,665
- Likes
- 258
Last month i noticed my trades were getting queued alot and
even refused if the market moved alot.
However recently over the last couple of weeks, my trades
are going much faster and if anything i have slightly
increased my trading size from last month.
I dont know if IG are reading these boards and backing off a bit,
or if stevespray has had an influence on them!!
Despite all their faults i still think IG offer a superb service and
would recommend them to everyone .
even refused if the market moved alot.
However recently over the last couple of weeks, my trades
are going much faster and if anything i have slightly
increased my trading size from last month.
I dont know if IG are reading these boards and backing off a bit,
or if stevespray has had an influence on them!!
Despite all their faults i still think IG offer a superb service and
would recommend them to everyone .
Last edited:
stevespray
Experienced member
- Messages
- 1,289
- Likes
- 156
Zig – okay, happy to re-cap what has gone on so far on this issue. Apologies to peeps who have read about this situation on another thread.
Basically one morning at around 8.15am I opened a down bet for £80 per point on IG’s ‘Wall St Daily’ (WSD) product. This is their ‘Daily Dow’ product. All the orders were place via the internet. The bet was opened with no problems and added to my open positions. Over the next 30 to 40 minutes European markets fell back quite sharply, what some people call a ‘pop and drop’ opening. S&P and Dow obviously followed the move lower and by around 8.50am my position was showing a profit of 29 points after the deduction of the spreads.
I decided at this point to close my position and lock in my profit from the trade. In entered the order in the normal manner via the client area of the website and submitted it. Within a second or so I received an order reference number which indicated that my order had been successfully submitted onto IG’s system. The prices quoted were perfectly inline with the prices being quoted by the other spreadbet agents at that time. So, with the order submitted I waited for the conformation. After almost one minute I received a message saying that my order had been refused on the grounds of ‘Invalid Price’. In the meantime the IG price had not moved more than a few ticks. I phoned dealing immediately and suggested that there had been an error and asked them to put the order through. The dealer refused point blank. I questioned him on his actions and he said that he didn’t have to fill any order if he didn’t want to. When I asked why the order wasn’t filled he said that he made the price on daily dow and on reflection the price might not have been where he was advertising it. I told him that his price was inline with other quotes at the time but I was informed that he could move his price where he wanted. I asked for a fair price to close my trade and was given a price 14 points higher than where my first order was. By now IG were weighting their market in a heavy fashion to the up side. I refused the quote and ended the phone call. I then closed the position online for a price 16 points above where my original order had been. I then review the 1 min chart for dow futs and re-telephoned the dealer to complain again. Still he refused to allow my order to pass at the original price, he also wrongly advises me of my rights under the T&C.
That afternoon I write a letter to compliance outlining what has taken place. Compliance say they will look into it. Several days later I receive a letter from compliance saying that “all normal practices have been followed” and that nothing out of the ordinary has taken place. I then write a further letter to the compliance officer pointing out what the T&C say about dealing with incoming orders. I point out that the T&C say that in order for them to refuse my order the price has to have been invalid ‘at the time it was submitted’. This cuts no ice with compliance, instead I receive back a ‘snotty’ and badly presented email which contains a convoluted series of terms and conditions which are mainly quoted out of context. The section of the T&C relevant to order rejection is at no point mentioned. I then make a number of phone calls to compliance and customer services to establish some facts. I then write a third letter to the head of compliance stating that my compliant isn’t being dealt with in the correct manner and I state that I will no longer except their ‘stone walling’ and ‘flannelling’ as a response. After a couple of weeks I receive a response from the Head of the Legal department. Now I’m starting to really make some progress. The letter is worded in a far better fashion than the letters from the compliance department but its contents are still questionable. It agrees with my argument about T&C stating that there has to be a valid reason for order refusal but the letter then goes on to say that there are further terms or conditions that are not listed in the customer agreement which allow them to refuse orders. They then use these ‘further reasons’ to state that ‘dealers can refuse orders at anytime’. I then submitted a 6 page complaint to the FSA / Financial Ombudsman Service.
I then proceeded to make further enquires myself of IG Index. I informed IG Index that I was a contracted party and therefore allowed to see all the T&C of any contract which exists between us (the customer agreement is a contract which IG and a client enter into). After much conversation and few phone calls the compliance department inform me that there are in fact no such extra terms and conditions and that what is written in the Customer Agreement is the full contract. I also make further enquiries about my refused order. The compliance department inform me that my order was refuse on the grounds that “Despite your order being valid at the time it was submitted there was sufficient movement on our order book while you order was being routed to a dealer for the dealer to consider the price incorrect by the time he came to review your order”. So they have admitted that the reason for my order being refused is directly due to the market having moved while I was in the queue.
At this stage I point out to compliance that according to the T&C this is not grounds for order refusal as the price was in no way invalid at the time it was submitted, compliance admit that in principle they agree with my argument but go on to say that because the head of legal has ruled they can not reverse their findings because the compliance department comes under the legal department.
And this is where we are up to at present. The Ombudsman is still carrying out his enquiries and I am awaiting their report. Once I have that I will start the legal proceedings to recover my money through the courts. As far as I can see I should win hands down. The letter from the head of legal has some huge mistakes in it. Firstly he is relying on these ‘extra terms’ which is something which appears to have been plucked out of thin air and secondly, even if these extra terms did exist, there is a prerequisite set out in term 5(4) of the customer agreement which states that in order to reserve the right to refuse my order fault has to be found with that order based on the price of the quote “at the time the order is submitted” and IG have already admitted that the order was refused due to price movements after that time. Of course IG also advertise “The price you see is the price you get” on the website so I would also ask the question “Why would they advertise this ?”, its clearly to promote an aspect of their service which they claim they will provide.
Steve.
Basically one morning at around 8.15am I opened a down bet for £80 per point on IG’s ‘Wall St Daily’ (WSD) product. This is their ‘Daily Dow’ product. All the orders were place via the internet. The bet was opened with no problems and added to my open positions. Over the next 30 to 40 minutes European markets fell back quite sharply, what some people call a ‘pop and drop’ opening. S&P and Dow obviously followed the move lower and by around 8.50am my position was showing a profit of 29 points after the deduction of the spreads.
I decided at this point to close my position and lock in my profit from the trade. In entered the order in the normal manner via the client area of the website and submitted it. Within a second or so I received an order reference number which indicated that my order had been successfully submitted onto IG’s system. The prices quoted were perfectly inline with the prices being quoted by the other spreadbet agents at that time. So, with the order submitted I waited for the conformation. After almost one minute I received a message saying that my order had been refused on the grounds of ‘Invalid Price’. In the meantime the IG price had not moved more than a few ticks. I phoned dealing immediately and suggested that there had been an error and asked them to put the order through. The dealer refused point blank. I questioned him on his actions and he said that he didn’t have to fill any order if he didn’t want to. When I asked why the order wasn’t filled he said that he made the price on daily dow and on reflection the price might not have been where he was advertising it. I told him that his price was inline with other quotes at the time but I was informed that he could move his price where he wanted. I asked for a fair price to close my trade and was given a price 14 points higher than where my first order was. By now IG were weighting their market in a heavy fashion to the up side. I refused the quote and ended the phone call. I then closed the position online for a price 16 points above where my original order had been. I then review the 1 min chart for dow futs and re-telephoned the dealer to complain again. Still he refused to allow my order to pass at the original price, he also wrongly advises me of my rights under the T&C.
That afternoon I write a letter to compliance outlining what has taken place. Compliance say they will look into it. Several days later I receive a letter from compliance saying that “all normal practices have been followed” and that nothing out of the ordinary has taken place. I then write a further letter to the compliance officer pointing out what the T&C say about dealing with incoming orders. I point out that the T&C say that in order for them to refuse my order the price has to have been invalid ‘at the time it was submitted’. This cuts no ice with compliance, instead I receive back a ‘snotty’ and badly presented email which contains a convoluted series of terms and conditions which are mainly quoted out of context. The section of the T&C relevant to order rejection is at no point mentioned. I then make a number of phone calls to compliance and customer services to establish some facts. I then write a third letter to the head of compliance stating that my compliant isn’t being dealt with in the correct manner and I state that I will no longer except their ‘stone walling’ and ‘flannelling’ as a response. After a couple of weeks I receive a response from the Head of the Legal department. Now I’m starting to really make some progress. The letter is worded in a far better fashion than the letters from the compliance department but its contents are still questionable. It agrees with my argument about T&C stating that there has to be a valid reason for order refusal but the letter then goes on to say that there are further terms or conditions that are not listed in the customer agreement which allow them to refuse orders. They then use these ‘further reasons’ to state that ‘dealers can refuse orders at anytime’. I then submitted a 6 page complaint to the FSA / Financial Ombudsman Service.
I then proceeded to make further enquires myself of IG Index. I informed IG Index that I was a contracted party and therefore allowed to see all the T&C of any contract which exists between us (the customer agreement is a contract which IG and a client enter into). After much conversation and few phone calls the compliance department inform me that there are in fact no such extra terms and conditions and that what is written in the Customer Agreement is the full contract. I also make further enquiries about my refused order. The compliance department inform me that my order was refuse on the grounds that “Despite your order being valid at the time it was submitted there was sufficient movement on our order book while you order was being routed to a dealer for the dealer to consider the price incorrect by the time he came to review your order”. So they have admitted that the reason for my order being refused is directly due to the market having moved while I was in the queue.
At this stage I point out to compliance that according to the T&C this is not grounds for order refusal as the price was in no way invalid at the time it was submitted, compliance admit that in principle they agree with my argument but go on to say that because the head of legal has ruled they can not reverse their findings because the compliance department comes under the legal department.
And this is where we are up to at present. The Ombudsman is still carrying out his enquiries and I am awaiting their report. Once I have that I will start the legal proceedings to recover my money through the courts. As far as I can see I should win hands down. The letter from the head of legal has some huge mistakes in it. Firstly he is relying on these ‘extra terms’ which is something which appears to have been plucked out of thin air and secondly, even if these extra terms did exist, there is a prerequisite set out in term 5(4) of the customer agreement which states that in order to reserve the right to refuse my order fault has to be found with that order based on the price of the quote “at the time the order is submitted” and IG have already admitted that the order was refused due to price movements after that time. Of course IG also advertise “The price you see is the price you get” on the website so I would also ask the question “Why would they advertise this ?”, its clearly to promote an aspect of their service which they claim they will provide.
Steve.
CityTrader
Established member
- Messages
- 666
- Likes
- 26
Conspiracy theories.
Not quite. What happens is the big/decent players/winners deal through a special desk , via a direct number- thus avoiding the telephone jockeys who answer the normal 0800 numbers. The BIG punters ( £500+ per point on idices or £5,000/point individual stocks ) are obviously going to get the service they deserve. Same as a casino - you realy think Mavis from Harlseden would ever sit next to Sheik Camel shagger? naw.... only difference is, the Casino wants you to lose. The SB WANT & NEED their big punters to win.
stevespray said:
Not quite. What happens is the big/decent players/winners deal through a special desk , via a direct number- thus avoiding the telephone jockeys who answer the normal 0800 numbers. The BIG punters ( £500+ per point on idices or £5,000/point individual stocks ) are obviously going to get the service they deserve. Same as a casino - you realy think Mavis from Harlseden would ever sit next to Sheik Camel shagger? naw.... only difference is, the Casino wants you to lose. The SB WANT & NEED their big punters to win.
