Best Thread Capital Spreads

[FXNEOTRADER]

broadsword et als

I know oanda are good but 'perfect fills' ?

as you say dedicated fx marketmakers wll always be better than us because we have to focus on a massive array of markets and offer them permanently on line rather than just a small selection of FX markets.

from mikeandpete's comments, aside from saying thanks .. I should also point out that he is quite right when he says that not being 24 hour probably has as its benefits as well. As being stopped out on an extension move at 3 in the morning because of illiquidity in the GBP/CAD (or some such) is bound to hurt !! Especially when you come in and the market appears unchanged from last nights close.

Simon

Simon,

How can you say that being shut overnight is not to your advantage. i think you're forgetting a couple of key things that no one has yet touched upon. Firstly we the clients pay the spread and you recieve it. Therefore your 50/50 theory goes straight out the window. You are the spread taker and as such have the immediate advantage. We have a 50/50 chance of getting it right minus the spread. Add to that the 2% spread that you charge us for the pleasure of the roll and that works out at another pip to our disadvantage.

Now we only have a finite period of time for the market to move by the entire spread ( plus said 2% charge) in our favour before we close for a profit. If we hold for 24 hours you'll simply charge us another pip (2% annual charge) for the pleasure. So how long do we have to close the deal before incurring another charge ( or to put it another way paying you more spread)? Well with D4F and IG it's 24hours with you it's only 14 hours.

To put it another way what do you think the reaction would be if you were to say to Liverpool.." listen we're going to give Man U a 1 goal headstart and shorten the game by 52mins but that doesn't disadvantage you really, it's still 50/50 who wins"

My sugesstion to anyone dealing FX is to chose a 24hr provider. You're putting yourself at a massive mathamatical disadvantage if you don't.

 

[BroadSword]

My sugesstion to anyone dealing FX is to chose a 24hr provider. You're putting yourself at a massive mathametical disadvantage if you don't.

Indeed...

Also, Simon, when you stated that some clients would complain about being stopped out overnight but seeing the market moveback again by morning, do these same clients not mind 100 pips slippage when your price comes on line when you open at 7am?

Out of interest, if a client had a ;limit to take profit, that was exceeded by say 100 pips in a strongly trending Asian FX market, would you honour the limit, paying a reduced amount, or would you give the client market price (i.e. much more than their limit would have given).

Let's illustrate with a simple example: Suppose cable was at 1.7800, with a take profit limit at 1.7850. before the limit is reached you close, and price trends overnight to 'open' on your quote at 1.7900.....do you honour 1.7850 or 1.7900?????????

 

[capitalspreads]

FXneotrader

I have seen some good arguments over the past few years but I have to assume that you do not know how markets work. Of course you pay the spread when you enter a position. YOU WILL PAY THE SPREAD NO MATTER HOW YOU TRADE not just with spread betting but with 'oanda', IG, CMC, IFX etc etc etc... how do you think we hedge our positions ? do we have some magic button which allows us to buy on the bid or sell on the offer? what absolute b******ks. We also have to 'pay' the spread.

you do realise of course that D4F charge you 3% overnight (a full 1% more than us or put another way 50% more) and IG just say that 'they will adjust your bet price to reflect premium or discount' which is not much help. At least we specify what our charges are. And in fact we will pay clients to hold positions in many instances if the interest rates are in your favour or if you are short the rolling indices or equities.

Broadsword

of course we give the improvement as a few clients have kindly pointed out on this thread. We cannot make a rule which does not affect both us and the client equally.

simon

 

[Phil Mibbutz]

CS promotes itself by saying it has the tightest spreads, but this no longer seems to be true with indices, from where I'm sitting. Is there any chance of CS leading the way by offering 2 or 3 pips spread on the Dow, or 1 on the DAX and FTSE? Most people (including me) would still make a loss, of course, so how about it?!

 

[capitalspreads]

Phil Mibbutz

we dont actually say we are the tightest just that we are tight! ... ummm i think that may not read as it was meant.

If you look at our rolling and quarterly share prices and coupled with our rolling charge/payment rates you will see that we are far tighter in nearly all instances than our major competition. Obviously there will be some markets that we are beaten on (we cannot check every market against every competitor price) but for the vast majority we are still either the best or the equal best when all factors are taken into consideration.

Although as our competitors would say we don't offer credit which, if you have it, does have some impact on returns. But frankly leveraged trading on credit for the average private punter is not something that I would recommend.

Simon

 

[Hoggums]

Phil Mibbutz

we dont actually say we are the tightest just that we are tight! ... ummm i think that may not read as it was meant.

If you look at our rolling and quarterly share prices and coupled with our rolling charge/payment rates you will see that we are far tighter in nearly all instances than our major competition. Obviously there will be some markets that we are beaten on (we cannot check every market against every competitor price) but for the vast majority we are still either the best or the equal best when all factors are taken into consideration.

Although as our competitors would say we don't offer credit which, if you have it, does have some impact on returns. But frankly leveraged trading on credit for the average private punter is not something that I would recommend.

Simon

Simon,

Do you ever intend to offer credit? I am finding that my returns from CS are noticably less (approx 65%) than that of other SB providers. I find it slightly annoying to keep jiggling the stop losses on winners so that I can fit in extra positions or keep the losers going.

 

[BroadSword]

Broadsword

of course we give the improvement as a few clients have kindly pointed out on this thread. We cannot make a rule which does not affect both us and the client equally.

simon

Well, that's absolutely fair enough then. Thank you, Simon!

 

[fxmarkets]

of course we give the improvement as a few clients have kindly pointed out on this thread. We cannot make a rule which does not affect both us and the client equally.

simon

Hark, I hear the distant rumble or belly ache laughter, and the rapid slapping of hands on desk, in an attempt to regain some sort of composure, on that one.



Just kidding. have a good week all.

Fx.

 

[capitalspreads]

Hoggums

unfortunately we are unlikely to offer credit in the medium term. I realise that this in effect means that we leave the bigger players to our competitors but it also means that we do not have the situation where we have to employ credit officers who are expensive and generally have the worst job in the world. We also find (surprise surprise) that clients will show the same evidence of wealth to all the SB companies and get credit from all of them which is obviously a very dangerous situation. We would rather not go there.

sorry

simon

 

[Jyde]

'Morning, Simon.

Any plans on letting us try out the binaries on the Demo?

CJ

 

[capitalspreads]

jyde

unfortunately binaries are a heavy manpower instrument and we are therefore unable to put them on the demo platform.

simon

 

[pboi]

Shame the man power was put into binarys, and not into a better Forex service..business decision I guess Cant let your competitors offer more options than you, rather than quality of current lines.


Still love CS tho, easily the best GUI of them all. and where else could I do my daily 10pm orders for the next day so easily !

 

[Phil Mibbutz]

Thanks for the reply to my earlier message, Mr CS, but no response about my idea of offering narrower spreads on indices?

 

[stevespray]

Order rejection on Binary Bets...

Afternoon Simon, After a recent email I received from your good self I decided to have a little play around with you binary bets.

If I can I’d like to make the following points.

Firstly the execution times seem quite big. I assume that these deals are being manually executed? This is a real problem in the binary bets market place. This delay in execution gives a good chance of the price moving away from the price submitted in the order. In just a few trial bets I’ve had a trade rejection even though the price was valid both at the time I sent the order and for a good many seconds after. The trade was rejected because ‘price was no longer valid’. This seems rather unfair since I can not control how long you guys take in dealing with an order. Surely these orders can be executed by computer? Can you not just get your computer to compare the price of your current market against the incoming order and simply execute it instantly if it falls within a specified tolerance?

Secondly, when I resubmitted the order (at a new lower price) the quoted price went back in my favour whilst I was waiting for the order to be executed yet this better price wasn’t reflected in my position – the order was simply executed at the order price when I submitted it. Are you therefore gaining the best of both worlds? If the order goes against you (the company) it is rejected saying ‘price no long valid’ yet when the boot is on the other foot an out of date price is still valid and the order is executed at that level? The customer is losing out on both fronts and an advantage seems to be being gained by Capital by having this delay between order submission and order execution – You are simply using subsequent movements in the market to determine the financial viability of orders which are waiting to be dealt with.

Thirdly, Surely the nature of these high delta products means that this type of execution procedure isn’t going to work very well? An increase in execution time is surely going to lead to an exponential increase in order rejections which go against the customer? Surely these products demand an execution procedure similar to Finspreads where the price you see onscreen is the price at which the order is executed?

Fourthly, The seems to be no way for the customer to cancel the order while it is waiting to be processed. This seems to be rather unfair since, during the period between submission and execution / rejection, the customer is effectively treated like the deal is done (ie the customer can not get out of it) whilst the company is at liberty to back away if market conditions alter during the order process. Doesn’t this effectively introduce a kind of ‘stealth spread’, an additional cost of trading which isn’t visible in the advertised spreads? Surely if you have the right to ‘back away’ in the period of order processing then the customer should be allowed to do the same? If that were so then the customer would at least be able to take advantage of any price betterment which takes place as they’d be able to cancel the order and resubmit at the new better price. Of course all this fourth point would be invalid if executions were instant.

Apart from that the binaries look good and I’m looking forward to playing about with them.

Steve.

 

[fxmarkets]

 

[FXNEOTRADER]

FXneotrader

I have seen some good arguments over the past few years but I have to assume that you do not know how markets work. Of course you pay the spread when you enter a position. YOU WILL PAY THE SPREAD NO MATTER HOW YOU TRADE not just with spread betting but with 'oanda', IG, CMC, IFX etc etc etc... how do you think we hedge our positions ? do we have some magic button which allows us to buy on the bid or sell on the offer? what absolute b******ks. We also have to 'pay' the spread.

you do realise of course that D4F charge you 3% overnight (a full 1% more than us or put another way 50% more) and IG just say that 'they will adjust your bet price to reflect premium or discount' which is not much help. At least we specify what our charges are. And in fact we will pay clients to hold positions in many instances if the interest rates are in your favour or if you are short the rolling indices or equities.

Simon

The difference between your 2% charge and D4F's 3% rollover charge on say GBPUSD works out at approx 0.5 of a pip. The fact is you both charge an extra full pip for the pleasure of rolling over the only difference being that you then shut up shop for 10 hours and they don't. Your statment that it is 50/50 whether the client makes or loses in this time is simply not true. You are either deliberately misleading people or you don't understand the mathematics of it ( personally I believe it's the latter).

If there was no charge and we all believed in the random walk theory then yes we would have a 50/50 chance ( i.e. break even) but the fact you charge us 1pip just to roll a position over means that on average we will lose that pip. The fact the you also then shut up shop is simply ( to go back to my football analog) shortening the goalposts. A 50/50 chance is the same as tossing a coin but charging a full pip and then shutting up shop is like asking us to toss 2 heads in a row to win and then giving us 10 hours less time than someone else to do it in. On average we will lose.

As for how you hedge, it is evident that you're going to take just as much spread on a deal that needs to be hedged as you are one that is not. Why is this so? I hear you ask...Well it;s because of your lovely policy of waiting before you accept any deal and rejecting if it goes for us and accepting if it goes against. Your dealing terms are going to be better than ours and your brokers certainly don't charge a full pip extra for rollovers!!

I don't mind you defending your little company but every time you come out with utter nonsense like the 50/50 rubbish I will step in and inform the people on here that they're being misled. Admit you have an advantage by taking that extra rollover charge and then shutting up shop for the night i'm sure the people on here will respect all the more for it.

Stevespray

As for you I don't know what to say! Where on earth have you been? Did you honestly think that a company that employs those tactics on a relatively transparent market like FX would do anything different with it's binaries?? I trade them too but am not even going to bother with these guys a market like that has to be auto accepted otherwise there really isn't any point whatsoever. My advice is simply to stick to companies who offer auto acceptance and avoid these guys like the plague.

 

[mickandpete]

FX
There is a simple market formula for working out a rollover/fwd price
Pts = Interest differential x days x outright Divided by 360 x 100
Example
US$ 4 1/2 % Euro 2% = Interest diff 21/2
To roll over 1 day
2 1/2 x 1 x 1.21 = 3.025 divided by 36000 = .000084
The fourth digit being a pip
the cost is approx 7/8 of a pip
To use correctly requires the 2 extremes of interst rates Lend/Deposit
as in 4 5/8 4 3/8 2 1/8 1 7/8
making a diff of 2 3/4 2 1/4
If your trade is long $ short euro who would need to lend $ at 4 3,8 and borrow eoros at 2 1/8 thereby earning a carry/ the reverse applies if short $
It would be extremely difficult to find any institution on the high street willing to work on the interest rate spreads I quoted for the pittance involved in your trades .
(A pittance in this case being less than $ 10 milion)

 

[mickandpete]

Simon
Why is it or was it 360 days a year when involving US$
It was something to do with Fed Funds but cannot remember
Of course it may have changed now.
Thursday/ friday and weekend all **** about face because of Fed Funds then
Note
thur/Friday Euro$ (US$ ) interest rate was 3 x daily rate weekend 1/3 of daily rate
And then there was the "turn" (turn of month/year) when it could go BANANAS
I can recall back in the "Volker" days of being long $ on a tuesday just to earn nearly a Pffenig from rolling "spot" thursdat to friday
It was allways one of those market FACTS I could not really grasp (never traded in NY) but had to accept as gospel
It never applied to any other currency as far as I am aware

 

[stevespray]

FXneotrader

Stevespray

As for you I don't know what to say! Where on earth have you been? Did you honestly think that a company that employs those tactics on a relatively transparent market like FX would do anything different with it's binaries?? I trade them too but am not even going to bother with these guys a market like that has to be auto accepted otherwise there really isn't any point whatsoever. My advice is simply to stick to companies who offer auto acceptance and avoid these guys like the plague.

You may well ask where on earth I have been?? I've been making these same points for the past 4 / 5 years. Take a look back at other posts on other threads which take the same theme.
For what it is worth I agree with you with regard to executions on these products - 'price becoming invalid' is not the fault of the punter but the companies choice to delay order execution.

Good evening,
Steve.

 

[mickandpete]

Stevespray/FX
Allways was/ Allways wil be
Solution
Deal with each other