Phil Mibbutz
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It's simple, Dave: a palpable error is any situation arising in which the SB company makes a loss.
Best Thread Capital Spreads
I can only say, it might pay to give CS a try again, to see if things have changed. A great report, thanks.
I have been using CS for a little while now and their stated prices are in line with other spread betting co's. I have had CS, IG and CMC all runing at the same time to see if there is a different in prices but for a point or 2 they were the same, even in fast moving markets.
I have never had any trouble getting a trade on in a fast moving market, the only problem I have had is a freeze on the screen or losing front end processor and having to open in a new window. I will have to what OLD are like but 6 point spread out of hours is huge. 1 point in ftse trading hours and 4 points outside hours is not bad, but I would love a SB company to come out with a 2 point spread after hours for the ftse. On the Dax CS have a 2 point spread until 9pm which is good. I would like to be able to trade ftse 24hrs monday to friday or CS keep the ftse open until 9.30pm to take take advantage of the dows after hours trades which can affect the ftse price.
I have never had any trouble getting a trade on in a fast moving market, the only problem I have had is a freeze on the screen or losing front end processor and having to open in a new window. I will have to what OLD are like but 6 point spread out of hours is huge. 1 point in ftse trading hours and 4 points outside hours is not bad, but I would love a SB company to come out with a 2 point spread after hours for the ftse. On the Dax CS have a 2 point spread until 9pm which is good. I would like to be able to trade ftse 24hrs monday to friday or CS keep the ftse open until 9.30pm to take take advantage of the dows after hours trades which can affect the ftse price.
Potshot,
"there is a different in prices but for a point or 2 they were the same."
Not that surprising. I would bet all SB's monitor competitor's prices to avoid potential arbitrages; to avoid offering the worst prices (not necessarily the best).
Or maybe it's a cartel with price fixing.
Grant.
"there is a different in prices but for a point or 2 they were the same."
Not that surprising. I would bet all SB's monitor competitor's prices to avoid potential arbitrages; to avoid offering the worst prices (not necessarily the best).
Or maybe it's a cartel with price fixing.
Grant.
Grant, you are joking aren't you?
stevespray
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Simon,
I’m noticing that an increasing number of ‘trade attempts’ are falling outside of the boundaries which you have clearly laid out on these boards.
Previously you have stated that orders will be filled so long as the price contained in the order remains inside the quote showing on your system at the time that your dealer gets my order. I am finding that you are now repeatedly and consistently breaching your clearly specified criteria.
I will provide examples. This morning I attempted to close an overnight short position on FTSE for 2 contracts (ie £20). The quote on your system was showing 6050 – 6054. I entered orders for a buy to close at 6054...... short delay.... “Order Refused – The Price Is No Longer Valid”..... price is then moved to 6052 – 6056. This move in price clearly occurred between 5 and 10 seconds after my attempt to close. According to your order acceptance criteria my order should still have been accepted?? My attempt to buy was at 6054 and the quote is now 6052 – 6056.....6054 clearly falls inside the current quotation and thus, according to your publicly acknowledged rules, the trade should have been accepted. In the end I closed on the next attempt at 6056 which is clearly 2 points worse off thus you saved yourselves £40.
Next attempt to buy another 2 contracts was at around 7.40am. Quote was 6058 – 6062. I entered orders to buy at 6062. Again “Trade Refused – Price Is No Longer Valid”. Quote moves to 6060 – 6064. Again 6062 falls well inside the current quotation and again should have been accepted according to your publicly stated dealing rules. A few moments later the quote drops back to 6058 – 6062!
These don’t seem isolated events. I had a friend with me in the office this morning who also has an account. On the second failed trade we were monitoring the quotation on his account whilst I was waiting for the outcome of my attempt to trade on mine. Your quotation only appeared to edge higher once my attempt to trade had been sent. His comment at the time was, “They’ve only moved the price higher because you are trying to buy”. His suggestion is that you use certain clients (placed on manual dealing) as a proxy for setting your prices?
Regardless of whether you ‘use clients’ to set your prices or not, you are not keeping to what you have previously stated in this thread with regard to fair execution ie the attempt to trade falling within the spread at the time the dealer reviews the trade.
Steve.
I’m noticing that an increasing number of ‘trade attempts’ are falling outside of the boundaries which you have clearly laid out on these boards.
Previously you have stated that orders will be filled so long as the price contained in the order remains inside the quote showing on your system at the time that your dealer gets my order. I am finding that you are now repeatedly and consistently breaching your clearly specified criteria.
I will provide examples. This morning I attempted to close an overnight short position on FTSE for 2 contracts (ie £20). The quote on your system was showing 6050 – 6054. I entered orders for a buy to close at 6054...... short delay.... “Order Refused – The Price Is No Longer Valid”..... price is then moved to 6052 – 6056. This move in price clearly occurred between 5 and 10 seconds after my attempt to close. According to your order acceptance criteria my order should still have been accepted?? My attempt to buy was at 6054 and the quote is now 6052 – 6056.....6054 clearly falls inside the current quotation and thus, according to your publicly acknowledged rules, the trade should have been accepted. In the end I closed on the next attempt at 6056 which is clearly 2 points worse off thus you saved yourselves £40.
Next attempt to buy another 2 contracts was at around 7.40am. Quote was 6058 – 6062. I entered orders to buy at 6062. Again “Trade Refused – Price Is No Longer Valid”. Quote moves to 6060 – 6064. Again 6062 falls well inside the current quotation and again should have been accepted according to your publicly stated dealing rules. A few moments later the quote drops back to 6058 – 6062!
These don’t seem isolated events. I had a friend with me in the office this morning who also has an account. On the second failed trade we were monitoring the quotation on his account whilst I was waiting for the outcome of my attempt to trade on mine. Your quotation only appeared to edge higher once my attempt to trade had been sent. His comment at the time was, “They’ve only moved the price higher because you are trying to buy”. His suggestion is that you use certain clients (placed on manual dealing) as a proxy for setting your prices?
Regardless of whether you ‘use clients’ to set your prices or not, you are not keeping to what you have previously stated in this thread with regard to fair execution ie the attempt to trade falling within the spread at the time the dealer reviews the trade.
Steve.
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Phil Mibbutz
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Steve: Don't you think they can always claim that this sort of situation is caused by delays in 'the system', which covers just about everything?
stevespray
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No, because with all things considered the price contained in my trade order still fell bang inside the 'current quote' even if they were using my attempt to trade to modify their price.
Steve.
Crap Buddist
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Well if you want to capture & record this in realtime, windows encoder 9 series will do the job. You can record partial windows or entire desktops for video playback/recording.
Traders could also use this to record a trading session and put it to disk.
Its free !
Windows Media Encoder
Phil Mibbutz
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Worth a try, but another SB still wasn't impressed a few years ago when I sent them a screenshot proving that something they said was impossible actually happened!
Anyway, we wait with bated breath for CS's 'it's always the same people who complain...' response to Steve.
This is tricky Steve, you are trading off hours, so there is no actual movement on the real market. It is absolutely essential that you record the session as suggested by Crap Buddist. Record your friends' quote at the same time. Afterwards compare both against the recorded live feed of the futures that you have. I don't know how many times I have recorded a session, only to find out that the SB was not to blame. I don't mean to say that they haven't monitored the trade against you in this case. Remember that the SB does not know anymore than we do, about the way the market is heading. However, If the recording shows that you and your friend have quotes that differ, they are clearly not following the MiFID "Best execution" directive. A few have claimed this to be so, but so far no one on this thread has been able to prove it convincingly enough.
Phil,
"another SB still wasn't impressed a few years ago when I sent them a screenshot proving that something they said was impossible actually happened!"
So how did they respond to irrrefutable evidence?
Gle,
Re "MiFID "Best execution" directive". I can't see this being relevant seeing as there is only one price, ie the SB's price. I think the directive applies when there are numerous prices on the same instrument, eg different exchanges, multiple market-makers.
Grant.
"another SB still wasn't impressed a few years ago when I sent them a screenshot proving that something they said was impossible actually happened!"
So how did they respond to irrrefutable evidence?
Gle,
Re "MiFID "Best execution" directive". I can't see this being relevant seeing as there is only one price, ie the SB's price. I think the directive applies when there are numerous prices on the same instrument, eg different exchanges, multiple market-makers.
Grant.
stevespray
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Gle,
You are right, it is trading out of hours but CS charge an extra spread to cover this aspect. I’m not sure whether MiFID directives cover this kind of thing or is indeed applicable. As Grant mentioned there is only one ‘quote’ as such and this is the one provided by CS, in real time, via their platform or via the telephone.
Obviously ‘out of hours’ markets are hard to price correctly. Recently I’ve seen Finspreads quotes on FTSE and DAX (1 minute before the open) be 20 or 30 points away from the first print on the underlying when it officially opens. This is an inherent danger of market making out of hours – if there is someone out there who is better than you are then they will make money from you and, since you cannot hedge it off, a client’s financial gain is a firm’s loss. In my opinion it is possible to establish a very healthy living purely trading in this premarket period.
My feeling is that recently my number of rejections has gone up because CS dealers consider their quotation after they know my (or indeed other clients) instructions. Surely fairness dictates that a client would be filled if he or she submits (and the firm receives) the order BEFORE the price changes? This isn’t happening. Instead the firm seem to view and instruction to buy or sell as a prompt to, a ) stall the filling of the order, followed by b ) moving the price in the direction of the order, followed by c ) issuing a ‘Trade Rejection’ notice based on a price which the dealing staff have just moved because you placed an order. Therefore it’s much harder to get filled and the quotes mean very little.
Of course, to stay inside the criteria which Simon appears to have set out, the quote would still have to move more than 4 points for the price to become invalid. So as well as moving the prices based on individual clients orders the dealing staff also seem to ignore the test for ‘price validity’ which has been publically set out.
Just to clarify re my friends account; I was not implying that different prices were showing on the two different accounts – I want to make that clear. All that the second account was used for was to monitor the price of their market in real time after my trade was sent. In other words I could see that the price didn’t alter the split second that I sent my order. The price remained the same for between five and ten seconds after my order was sent. It was only after that time period that the price was moved higher and then, at that point, my order was rejected on the grounds of invalid price. I therefore suspect (who is that behind the grassy knowle?!?) that the firm may, from time to time, delay the filling of a clients order in order to move the price.
I don't want to make a huge issue out of this but I'm just pointing out that things aren't happening as they are suggested by Simon.
Steve.
capitalspreads
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steve
in pre market FTSE we try to give as good a price as we can but the only real information open to us is the pre-market orders put into the LIFFE futures markets. (and some premarket orders on a few FTSE 100 shares) As some traders reading this are no doubt aware, anyone can put a premarket order in the DMA system which will not be filled (as the market is not actaully open) but which will affect the average 'opening cross level'. So you (anyone) can put a 500 lot (£5000 bet equivalent) order to sell at 100 points below the market at 07.58 and this will (obviously) affect the average crossing price for the open. Our systems are not linked to this 'opening cross' as it is rather open to manipulation but our dealers must take note of it.
If the cross is looking to come in 20 higher but then a big order comes in which moves the average down to just 10 up then our dealers must 'estimate' whether this is a real order or just somebody trying to 'spook' the market in the minutes before the real open.
Sometimes traders play 'spoof' on the open (I often wonder whether it is an attempt to get the SB firms to adjust their pre-open quotes). I once saw a dealer lose over £70K when he placed a spooking order on a pre-market system and then he got distracted just before the open. He was filled at bang on 8.00 some 50 points away from the real level in huge size. A difficult conversation with his treasury manager ensued.
This morning was a case in point where we were merrily quoting 6054-6058 or thereabouts for most of the 07.00 to 08.00 period. The cross actually came in at 6070, for some reason. 16 pips higher. A minute or so later it was back at 6054. why? who knows?
My dealers are only human... in hours, £20 would go through without a blink on a one point spread. Pre-market, on a four point spread they, naturally, wonder why is somebody trading in £20 and automatically think "oh! our price must be wrong". If they then see than a big pre-market order has gone on the LIFFE system they will then assess the attempted trade. Out of hours quoting and trading is filled with fear. My dealers do not want to be seen to have been caught out when they should have been more vigilent.
Pre-market has no underlying instrument so it is the only time when a deal request is 'completely' a request to trade at a price and is entirely at the dealers discretion whether to accept or not. Out of hours markets are never auto accept ...even a £1 bet will go to a trader for verification.
On the other hand you are quite right about trading just before the open, some people seem to have a sixth sense about opening levels. We have some clients who only ever trade in the few minutes before the open and ignore the market for the rest of the day.
Simon
in pre market FTSE we try to give as good a price as we can but the only real information open to us is the pre-market orders put into the LIFFE futures markets. (and some premarket orders on a few FTSE 100 shares) As some traders reading this are no doubt aware, anyone can put a premarket order in the DMA system which will not be filled (as the market is not actaully open) but which will affect the average 'opening cross level'. So you (anyone) can put a 500 lot (£5000 bet equivalent) order to sell at 100 points below the market at 07.58 and this will (obviously) affect the average crossing price for the open. Our systems are not linked to this 'opening cross' as it is rather open to manipulation but our dealers must take note of it.
If the cross is looking to come in 20 higher but then a big order comes in which moves the average down to just 10 up then our dealers must 'estimate' whether this is a real order or just somebody trying to 'spook' the market in the minutes before the real open.
Sometimes traders play 'spoof' on the open (I often wonder whether it is an attempt to get the SB firms to adjust their pre-open quotes). I once saw a dealer lose over £70K when he placed a spooking order on a pre-market system and then he got distracted just before the open. He was filled at bang on 8.00 some 50 points away from the real level in huge size. A difficult conversation with his treasury manager ensued.
This morning was a case in point where we were merrily quoting 6054-6058 or thereabouts for most of the 07.00 to 08.00 period. The cross actually came in at 6070, for some reason. 16 pips higher. A minute or so later it was back at 6054. why? who knows?
My dealers are only human... in hours, £20 would go through without a blink on a one point spread. Pre-market, on a four point spread they, naturally, wonder why is somebody trading in £20 and automatically think "oh! our price must be wrong". If they then see than a big pre-market order has gone on the LIFFE system they will then assess the attempted trade. Out of hours quoting and trading is filled with fear. My dealers do not want to be seen to have been caught out when they should have been more vigilent.
Pre-market has no underlying instrument so it is the only time when a deal request is 'completely' a request to trade at a price and is entirely at the dealers discretion whether to accept or not. Out of hours markets are never auto accept ...even a £1 bet will go to a trader for verification.
On the other hand you are quite right about trading just before the open, some people seem to have a sixth sense about opening levels. We have some clients who only ever trade in the few minutes before the open and ignore the market for the rest of the day.
Simon
Sorry, this is just bull. From a client's point of view, it's the same intsrument whether in or out of hours. Perhaps you could point to the place in your t&cs where it specifies that until the market is open, a trade is only a request. On your products where there is no underlying market (FX, binaries) can we assume that you these deal requests as a 'request to deal' as well?
I don't often agree with Steve, but here you really are having your cake and eating it, claiming on the one hand that your dealers can't know where the opening will be with 10 points, and on the other that Steve's trades are rejected so that your dealers can finesse the price 2 pips. Frankly, it's pretty obvious that they just fancied another £40 for the privilege of trading.
Nick
Yes but there is no hedge when the market is pre-open, is there.
Two points - firstly, whether or not there is a hedge is a matter for the firm, not the customer. The product he is offering is identical according to his t&cs irrespective of the time.
Secondly, there is no identical hedge for a self-generated index product. During hours FTSE Cash can be hedged pretty effectively with FTSE futures, but nonetheless there is some risk from a shift in fair value. Out of hours, most SBs will hedge in other futures markets, generally the S&P. There is a strong corellation between the US and UK indices - overnight, this is what the price is generally based on (plus client trades, and other firms' pricing). A distinction can be made between pricing and hedging. Yes, there's no means of pricing perfectly (no underlying), but there are means to hedge exposure based on the relative betas of markets.
It's makes no difference to the trader though however the book is hedged.
