Best Thread Capital Spreads

[ZEPPO]

Zeppo,

You seem a little out of touch with regulation.

Since MiFID there is no 'intermediate' cateogry. All clients are retail, professional or eligible counterparty. The vast majority of CFD traders are classified retail. This means that -unless they have opted to transfer title to their funds, all funds have to be segregated, so your point about commingled funds is no longer correct.

Secondly, I'm not sure why you think that turbo pricing is more transparent than CFDs. There is only one market maker - SG- and they're not transferrable. Granted, the fact that they're listed means that your counterparty risk is to the exchange not a dodgy broker, but the execution risk is identical - you're reliant on the goodwill of one market maker.

Frankly, DMA CFDs seem more transparent to me; you're using the CFD provider as a broker not market maker

You're right about the regulation bit - I just checked IG Markets, and they do segregate their clients money; they didn't do that before, but they are MiFID compliants.
Other than that, their conditions are pretty much the same as their spread betting counterpart; and they state clearly that they can widen their spreads as they see fit.
In short, with CFDs you'll get different prices, just as with FOREX "brokers" and spreadbetting firms, on the underlying, and with different providers.
With Turbos, you get one market maker, but at least they don't make up their prices.
For me, it is all bets, whichever way it is put.
What would the difference be if, say, tomorrow the Treasury decides to tax spreadbets? Or not to tax CFDs? There would be little difference between each other, wouldn't it?
Anyone would like to comment on this?

Eduardo.

 

[Phil Mibbutz]

Tax on spreadbetting would probably result in more choice and better deals for DMA futures trading.

 

[gle101]

Tax on spreadbetting would probably result in more choice and better deals for DMA futures trading.

Could be, In fact I think the SB industry would not be against such legislation, why, it would probably open up for other huge markets, like the USA.

 

[PipStar]

Could be, In fact I think the SB industry would not be against such legislation, why, it would probably open up for other huge markets, like the USA.

I disagree. Remove the tax incentive and it will kill spreadbetting companies. There is too much of a wide choice out there for anyone to put up with their obsolete and slow platforms without the tax break. And on top of that being put on dealer confirm.

By the way, they can enter the U S markets right now as long as they don't offer products that are prohibited there. Not as spreadbets but just as normal brokers.

 

[Phil Mibbutz]

I disagree. Remove the tax incentive and it will kill spreadbetting companies.

That's what I meant.

 

[gle101]

I think you guys are wrong here. Let me explain why. If financial spread betting becomes taxable it would strengthen the legitimacy of the industry, it officially becoming a financial instrument. Thus, a much greater chance for it becoming legal in many parts of the world. Trading CFDs is allowed in many countries (not yet in the USA though). I believe there is a SB UK connected organization (read it somewhere), investing quite a lot of money lobbying in USA, on grounds of SB becoming taxable in the US.

 

[gle101]

By the way, they can enter the U S markets right now as long as they don't offer products that are prohibited there. Not as spreadbets but just as normal brokers.

What instruments are you referring to? As a Forex broker, I guess it could be possible. Prospreads can skip the SB wrap, but then, they are just a broker dealing with futures, which has nothing to do with spread betting.

 

[tar]

SB advantages is the tax free plus the trading size flexability ,so if it became taxable SB firms will lose many clients ...

 

[gle101]

SB advantages is the tax free plus the trading size flexability ,so if it became taxable SB firms will lose many clients ...

It will also gain many, SB becoming a financial instrument. I think the size flexibility and the number of products offered, this together with user friendly platform are underestimated. Why do you think CFDs are increasing in popularity?

 

[tar]

It will also gain many, SB becoming a financial instrument. I think the size flexibility and the number of products offered, this together with user friendly platform are underestimated. Why do you think CFDs are increasing in popularity?

Thats what i mean if it became taxable it will lose many clients , ofcourse if it became legal in the US many clients will join , so what ? we go to the zero again , some quit some join ...

 

[gle101]

Thats what i mean if it became taxable it will lose many clients , ofcourse if it became legal in the US many clients will join , so what ? we go to the zero again , some quit some join ...

tar, there is a huge market out there, just waiting to be explored by the SB industry.

 

[gle101]

I know that Simon have said, it is not likely that SB will become taxable. At the same time, I would be surprised if that is what he really wants (even though he don't like to say it out load). You have the whole of Asia, South Americas and the USA, at you fingertips, if SB becomes legal in these parts of the world.

 

[tar]

tar, there is a huge market out there, just waiting to be explored by the SB industry.

No , take for example Forex marketmakers in the US , their total volume is a very very small stake from the whole real Forex volume . Gle SB is a game only and it is very good for newbies also it can be used for hedging in small sizes , but it is not the market , when u SB u dont add volume to the market , it is like sports SB what ever u bet with your bookie u cant affect the results of the game . For me i like the flexability ( size ) in SB but for me the professional trading is in Direct Access , my goal is not taking some bets on the FTSE or Cable only , my goal is bigger than this , i want to trade in the market i want to anticipate in the real maket i want to add volume ...

 

[gle101]

No , take for example Forex marketmakers in the US , their total volume is a very very small stake from the whole real Forex volume . Gle SB is a game only and it is very good for newbies also it can be used for hedging in small sizes , but it is not the market , when u SB u dont add volume to the market , it is like sports SB what ever u bet with your bookie u cant affect the results of the game . For me i like the flexability ( size ) in SB but for me the professional trading is in Direct Access , my goal is not taking some bets on the FTSE or Cable only , my goal is bigger than this , i want to trade in the market i want to anticipate in the real maket i want to add volume ...

Do you know how much CFDs play a part of the London Stock Exchange? Also SB offset some of the bets in the real market. Doesn't this add volume to the real market?

 

[tar]

Do you know how much CFDs play a part of the London Stock Exchange? Also SB offset some of the bets in the real market. Doesn't this add volume to the real market?

SB firms dont hedge that much and It adds nearly nothing to the overall volume , and CFD DMA is DMA through third party so dont compare it to SB ...

 

[gle101]

SB firms dont hedge that much and It adds nearly nothing to the overall volume , and CFD DMA is DMA through third party so dont compare it to SB ...

Yes, I agree, not much seen from the total, but you said, they did not add volume at all. If I understand it correctly, most of the CFDs instruments are not listed as instrument traded directly at exchange. If you want to trade DMA in front of SB, it is of course your free choice, but this is hardly the issue here.

 

[Phil Mibbutz]

I think SB relies on a constant stream of newbies signing up, tempted by the 'free money' offers and the delusion that they'll make a huge amount of profit and not have to pay tax. Remove the tax incentive and half as many mugs will be sucked in.

 

[gle101]

I think SB relies on a constant stream of newbies signing up, tempted by the 'free money' offers and the delusion that they'll make a huge amount of profit and not have to pay tax. Remove the tax incentive and half as many mugs will be sucked in.

Yes this could be the case, but I think new groups will join in if taxation would become a reality. CS have increased their client base to 45.000 according to Simon, at the same time the competition has increased. I think it is about time to acknowledge the SB industry for what it is. If the SB industry matures and get rid of bad client policy, I cannot see anything but a bright future for the industry as a whole, this with or without taxation.

 

[PipStar]

Yes this could be the case, but I think new groups will join in if taxation would become a reality. CS have increased their client base to 45.000 according to Simon, at the same time the competition has increased. I think it is about time to acknowledge the SB industry for what it is. If the SB industry matures and get rid of bad client policy, I cannot see anything but a bright future for the industry as a whole, this with or without taxation.

Sorry, mate. I have to agree with Phil's post above. The only future for the SB companies is that it remains tax free. This is mainly a game for newbies attracted by free money, low margins and not having to pay tax. I say newbies because those who are good at it will eventually be chased off by the spreadbet companies by what you call 'bad client policy'. So the SB companies survival and progress depends on opening new accounts and sucking money from the inexperienced and unskilled out there.

I can't see new 'groups join in if taxation would become a reality'. If so why are they waiting to be taxed to 'join in'? Doesn't make sense. The spreadbetting industry will mature as much as a casino can mature; that's what they are really! They may be able to add some more bright lights and exotic games and give you some free meal tickets but in the end the house always wins!

 

[tar]

Yes, I agree, not much seen from the total, but you said, they did not add volume at all. If I understand it correctly, most of the CFDs instruments are not listed as instrument traded directly at exchange. If you want to trade DMA in front of SB, it is of course your free choice, but this is hardly the issue here.

No i am not talking about which is better , only i wanted to show u the real size for SB , and how it is a game only no more . Infact i think real trading will mature and will get re regulated ...