Anybody else ripped off by deal4free?

jls483

Active member
173 0
I've just been looking at my daily statements for the past few days and I believe that the overnight financing charges are too big. Would anybody else mind checking to see if theres is the same?

To calculate the correct overnight charge on a spreadbet, take the current interest rate (4.881) and divide by 365. Then multiply the closing value of the instrument you are using e.g. (3889.2 for the UK100 Cash) and divide by 100.

This gives .520087 for the UK100 cash. In otherwords we lose about 52p a night for each contract that is held.

On my statement for friday the financing charge for the UK100 cash was 2.08827 for UK100 cash in other words financing for 4 nights. I never received a statement for thursday, but I can calculate from my current positions that I was also charged 2.08827 for Thursday night. This makes a total of six extra nights, when the weekend normally only includes two!

I believe that deal4free has overcharged me (and presumably every other customer) an extra 4 nights of financing - a tidy sum I'm sure.

If anybody could confirm whether or not the same has happened to them - I'd be very grateful.

Thanks,

John.
 

jls483

Active member
173 0
yes it does only apply to overnight positions.

There is a section on the statement which is entitled
"Opening Price Adjustment Summary for Next Business Day", here they add a small adjustment to the opening price of any contracts they roll over which affectively you charges you interest.
 

BristolBaz

Newbie
2 0
John,

Just been looking over the past statements - they sure make it difficult to see what you are really being charged.

But yes, I've been charged the same as you - But it seems to change from night to night?????

Quite high cost when you look at Friday's statement.

Also noticed that the credit interest has dropped from 3% to 2.75% with no prior notification from them.

Have you spoke to them about it?

Barry
 

jls483

Active member
173 0
The exact figure will change depending on the final closing price of the FTSE and the LIBOR.

I have written to deal4free and I will post back to the thread what happens.

John.
 

TheDealer

Newbie
1 0
What i find very frustrating about deal4free is the way that the manipulate their spreads. For instance spreadbetting on the ftse 100 (rolling cash) there is meant to be a spread of 3points. The reality of the situation is that you need to make around 10 points before you're in the money due to the way the spread is skewed outside the market price.
 

jls483

Active member
173 0
Dear TheDealer.

Welcome to deal4free. Yes many people find this annoying - there are quite a few threads already on this subject I believe most of the spreadbet companies do the same thing. I think the general consensus of the boards is trade real futures instead.

I don't mind them messing about with the price - but what annoys me is when they take money which they should not do. Still nothing back from deal4free ...

John.
 

BristolBaz

Newbie
2 0
Thanks John. I won't hold my breath for a reply from them!!

TheDealer :

Their prices follow the actual futures - you will notice how more aligned they become nearer the June expiry.
You can check futures prices at advfn.com.
 

waytogo

Active member
162 0
Hi

I used to trade with Deal4free, and it was such a relief when I finally closed my account with them. I now trade the FTSE future through Easy2trade and what a difference it makes - I finally feel in control of my trading and no more starting from a losing position by having to make the spread before I am in profit! I had many arguments with them over various different issues, and I can assure you they are very reluctant to ever admit that they are wrong. I did check the overnight charges once or twice and they seemed to be OK at that time. However, I wouldn't put it past them to change the rate at which they are charging you and then claim that they sent you an e-mail informing you (which somehow you never received - happened to me over another issue).

Good Luck

Waytogo
 

jls483

Active member
173 0
YES I WAS RIPPED OFF BY DEAL4FREE AND THEY ADMITTED IT

They didn't contact me, so I phoned them, got through to back office and the conversation went something like this:

Me: Hello, I believe I have been overcharged by your overnight financing costs
d4f: Ok (no shock and amazement) - what is your account number - I'll take a look.
Me: XXXXXXX
d4f: Ah yes. We are aware of the problem and you should have been automatically refunded the overcharge, but I'll do it for you now and it will be on your statement tonight.

Call me a cynic but I got the impression that you only get the money back if you complain - so if you held any overnight positions over the bank holidy weekend - get on the phone. Just use the script above and see what happens. If they start asking difficult questions say that you will explain it all in an e-mail and then check your statements as described at the top of this thread - e-mail me if you wish. Let us know the result and if it turns out they have done it to all of us and none of us have been refunded then lets get straight to the SFA!

John.
 

frugi

1
1,827 125
Obvious deal4free tip which only just occured to me - d'oh

If holding overnights for 3 or more nights always use the future for longs and the rolling cash for shorts.

A hideously oversimplified calculation but the idea is on the longs the extra spread costs less than the overnight financing cost while the rolling cash shorts benefit from the financing cost and a tighter spread.
 
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stevet

Established member
917 5
waytogo

i have always understood that easy esay2trade charged too high a brokerage fee, stuck people with costs if they did not trade, and the system was unreliable - have you had experience of other platforms so you can judge easy2trade realistically and/or do you believe they are good

what are you paying per r/t and can you do US markets
 

waytogo

Active member
162 0
Stevet

As you can see I wrote that post way back in April. Since then Easy2trade have gone bust and I now trade with IB. Easy2trade were a bit on the expensive side, but as a beginner with direct access they were absolutely ideal as they had an extremely helpful bunch of guys on their help desk who were always able to answer my questions, however stupid! It is true that their platform was not always reliable, but I think that was due to the fact the company had mis-spent money in the past and that is why they went bust. Had I been more experienced I would have no doubt changed my account, but at the time I didn't mind too much. I dont regret having an account with them, but IB do offer a much better service in terms of cost, markets and reliablity so E2T did me a favour by closing my account for me!
 

jls483

Active member
173 0
Dear frugi - I am not sure that your logic is quite correct. I think most people would argue that if you hold your bet for any length of time you should avoid the rolling cash bets.

N.B. The following illustrates how you can work out which is best -I know it is it simplification and I don't guarantee that the figures are accurate.

GOING LONG

The rolling cash on the UK100 has a financing charge of about .5 a night, but the december contract on the UK100 has a cost of carry built into it which is approximately .3 per day until expiry. So if the rolling cash has a spread of 3 and the december contract has a spread of 5 and we hold our bet for N nights then the effect on our profits are

3 + .5*N for rolling cash and 5 + .3*N for december contract.

These two equal when .2*N = 2 or N = 10.

So for this instrument use rolling cash if you expect to go long for less than 10 days and use a december contract if you expect to hold for more than 10 days.

GOING SHORT

When you are going short then I think you receive a financing charge of about 0.1. This has the following affect on your profits

Rolling cash: 3 - 0.1 *N
Dec: 5 - .2*N

These equal each other when .1N = 2 or N = 20.

So in both scenarios it is better to hold Rolling cash for short term bets and december contracts for long term bets. I'd be interested to hear if you agree!

John.
 

DanielLambert

Active member
145 1
Might be a stupid question...


Occasionally get a Corporate Action Adjustment on my statement next to the financing adjustment?

Ive had a 3point adjustmnet on a short Dow Cash position on this mornings statement


Anyone know what this is?...
 
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