Best Thread Capital Spreads

[capitalspreads]

we hope to be live towards the end of next week.
Of course I am relying on the most timely department in the world the 'IT' guys. So fingers crossed.
We will be launching quietly to start with so that we can go live with a smallish number of clients (i.e any who have already made a full application), which should means that any 'bugs' that we have missed don't annoy too many people.

Simon

 

[stevet]

"But customers must realise that if you make a trade at one thirty in the afternoon just after a Non Farn Payrolls number from the States the chances are that by the time we have received the price from Chicago / put it through our price engine / shoved it out onto the web / you, our client, see it and respond and deal on it..... etc the market could be twenty or thirty points away. In reality you could not get the deal away in the real futures market so why would you expect to get it away in the SB market?"

capitalspreads

not too sure what this point means - are you saying that if someone has a quote and they take that price, that you may not confirm it if the market has moved away from that price?

or are you saying that you may not issue quotes in a fast market?

or?

 

[capitalspreads]

No, of course we will quote in fast markets, but what I am saying is that allthough, we would hope that all trades would go straight through we cannot, and nor would anyone else, guarantee that if you hit a price online you will definately get it.

We will try to fill all trades at the levels attempted but as, with all things, we cannot say that we will always do so. That is what I meant to say.

We are trying to make an honest point here not split hairs over what may or may not happen.

Simon

 

[Finlayson]

capitalspreads

forgive me if I have misread, r u saying u do 're-quote' if I hit a market price & price has moved fast, or that deal will 'fial' as u say above u dont do re-quotes.

excuse me if I have missed the point here

jay

 

[capitalspreads]

Our system does not do re-quotes .... if we do not accept a trade you will have to hit the trade button again. I must emphasise that we do not anticipate many disallowed trades but I cannot in all honesty say that it will not happen.
What I can say is that you will know immediately whether the deal has gone on or not and you will not be left in limbo wondering if anything happened.

 

[Finlayson]

Ok Cap

many thanks

jay

 

[stevet]

capitalspreads

whilst i can see the probs for you in fast markets, the only problem with how you are quite rightly protecting yourselves- is that if someone is trying to exit a positon as opposed to enter a poition - they could be trapped in the position as they might keep having to reissue the trade as they get it refused and with the market possibly tanking against them

and whilst i take you point about the real market and getting fills - i assume it is not quite the same with spreadbetting since in the real market - if you want to get out for sure - you just put a market order in and get out in relation to the time of your order - whereas if you are being requoted in spradbetting - you are trapped until the market settles

and of course the fast market issue at 1:30 news times is not that often - but if people enter trades at the high volatilty times of the day - which for most should be the only time to trade - you could be locked in positons everyday

i suspect though that this problem affects all spreadbetting companies - and may just be a cost of trading that way

 

[capitalspreads]

stevet

Yes ... but you could have placed your stops at a level at which you wished to exit any trade. And then, after the event, we would look at where it would have been reasonable for us to have executed the trade. or of course we could have place our own stop orders in the market to protect us, thus protecting you. The point of Stops in the SB world is that it gives the SB a chance to exit a position as well as the client.

It must be remembered that if there is a sudden move in the market every body is trying to get out. Yes, your bet might be just £5 but from the SB point of view the total of bets may be £500 -£1000 and without orders in the market the SB may be looking at loses of 50 -100 K if they just allow every trade to go thru.

An SB is not going to be too sympathetic to a customer who says that he tried to get out of a £100 bet in the DOW but that the SB said sorry market had moved too much and that accepting the Bet in unreasonable circumstances would just transfer a £5000 loss to the SB company. And in the full knowledge that if the SB had been able to place the Stop order in the market prior to the event it would have saved a great deal of grief.

Simon

 

[warm_machine]

Although the odds are firmly weighted to the side of the spreadbetting company and 99% of the time most complaints are justified, I think it's unreasonable to expect to be filled "at seen", especially during a fast market. Not long ago I remember that one would have to trade by the phone and you would not get your fill for a market order for a good few minutes, this during a normal market, nevermind fast. The "fill or fail" instant execution system in this case is probably the best solution as it lets the trader know where they stand immediately.

 

[stevet]

warm_machine

whilst you are right about the fact that things are millions of times better now - you just can't compare the days of phone orders with now - simply because it is very very difficult to trade successfully now - it was 100% impossible in the time of phone only orders to do short term trades - so it is only electronics that now make it at least feasible for an individual to trade successfully in the shorter time frame

when i started i could read an article in the FT and it might take a month for the market to catch up because the insiders had such an easy run - that they just moved the market as they wanted - so fundamental trading over time really worked - that is not the case now as news and analysis of news is constantly diseminiated and priced in by the market

electronics have given a real opportunity - but it still aint easy!


capitalspreads

putting stops in the market is just a way to wear down your account over time - instead of in one hit - and i suspect that in order for you to protect your own companies P&L - there is no way to make it easy for the customer to exit a trade when the market is nervous - the customerwill always have to stand behind your own company needs - but this is going to be for all spreadbet companies - not just yours -and i suspect if you have had a chance to see how the others operate and start with new software - you are probably in a better spot then most to give a fairer deal to the punter - since you should be more efficient at protecting your own book - and by extension add a few % safety factor to the punter

 

[capitalspreads]

we are also in a position to be sensible about a stop that only just hits and then bounces away. In these scenarios we will try to be as accomodating as possible ( at least to start with) unless we have put our own stops in place. In which case it could be 'tough luck'.
But then, as you say, our entire platform has been biult for the online client not as an afterthough to the telephone trading desk.

Simon

 

[darrren]

Capitalspreads

1. You mentioned that your speads are competitive, but when looking on your site I see examples such as AMGN with A SPREAD OF 26 Against Deal4Free who quote a spread of 8.

2. I can't see DAILY US stock prices, only futures

3. Top traded US NASDAQ stocks missing eg AMGN, MERQ, QCOM etc.

 

[capitalspreads]

Hi

yes 8 pips on a daily bet US share against our quarterly bet.

You must compare like for like.

It depends what you are looking to do. If you calculate what it would cost you to run a daily US rolling bet for the two months odd to the 16th Dec you would no doubt find a spread wider than my 23 points. But you are right it is too wide, we are looking at all the spreads on the various shares and markets and comparing them throughout the SB world (not just D4F).
Markets quoted .... we are not looking to match any one company on the number of markets quoted ... for our launch date we have picked a selection of US stocks, maybe not the biggest or most liquid but a fair selection. We simply cannot launch on day one with 350 UK stocks ,200 Europeans, 500 US etc and expect our systems to work perfectly.

We are not doing daily shares at the moment, but we will be looking at them from a CFD perspective.

Simon

 

[darrren]

Capitalspreads
Thanks for your reply.

Far be it from me to tell anyone how to construct their business model BUT.............

If launching into a competitive market, you need something that DIFFERENTIATES you from the rest, as your market will mostly be existing clients of other SB, who need an incentive to use you.
I haven't seen, yet, how you are different from the rest.


The main player is D4F and they made their mark from day one by having a unique and very cleverly thought out name and advertising campaign to reinforce it. They also ensured they had better spreads than their competitors. This is why they keep customers , and have grown so quickly that they have expanded to Australia, despite acting in an often disgraceful way that resembles the practises of a bad street market trader, rather than an ethical company trading under the umbrella of the FSA.


D4F stand out from the others with their pricing, range of products and flexible platform (yes, and their intractable attitude).

If your model is the same as the others 5 not mentioned by name, then what is there to attract their customers (which is what your aim must be).

D4F don't do quarterly bets on many stocks, but more and more the clients are going to the shorter term, hence the success of D4F with their big ranger of Daily bets.

In your reply, you correctly pointed out that the difference over three months between your spread and D4F would narrow, BUT, three months is a lifetime for most traders using SB, and this is why Daily is so popular.

I was surprised that your platform looked and felt so flat and run of the mill (IMHO) when you had the opportunity to see what is out there on the WWW and take the best ideas - just a dash of colour would help.

I do wish you success, but nothing I have seen or heard tells me that a new dynamic company is about to hit the SB scene - which is what all new startups should be aspiring to.

A good test of this is whether your company and product/platform/proposition would inspire a newspaper or magazine to want to make a special feature of it and have the phones ringing off the hook after it appeared.

Notwithstanding the above, I recommend your easiest route to success is to study D4F carefully, and even if you only just match them in price, and act very ethically and fairly, you should be able to get their customers flocking to you - after all, they don't stay with them because of any allegience(many forums will attest to that).

Good Luck

 

[capitalspreads]

Well yes, I cannot in truth argue with most of your points. But we as a company have to look at it from a different angle.
As a company we are here to not only provide a service but also eerrrr... (sounds bad I know but) make money doing so. If we quoted as tight prices as D4F and also allowed every trade to go through we would just lose money...as customers would sit at their screens and just wait for the late or the incorrect price.
If you sit at any trading screen for long enough you will probably see three or four a day in the more volatile products.

We have had quite a bit of interest from the press, but as you say we are not reinventing the wheel here (if some of you could comeup with a product that you would like to see, please, drop us a line).

I cannot comment on the deficiencies of opposition web sites, all I can say is that you all know that there are pros and cons to every company. We will just add a few more pros to the equation.

Simon

 

[juanbyte]

I have been using the demo account for quite a while and I am very pleased with the speed of trading and when switching to different pages. It may not look the best but it WORKS.

There was a minor glitch with one trade early on, I informed CS and they look like they have sorted it, good service.

Their spreads on the popular markets are the second tightest, they may prove to be the tightest in reality. I trade the Dow and have noticed that D4F's prices jump above and below the market effectively widening the spread, if CS prices follow the market a little closer then this would be to the spread-betters advantage.

When Microsoft started they were not top of their sector, they just back engineered IBM's source code, the company grew over a number of years. All companies have to learn, lets give CS a chance.

There seems to be quite a bit of moaning about SB companies, without them many people would not be able to trade, if you don't like them go and trade futures or options see if they are better.

From the replies it seems that the spread firms always make errors in their favour, in my experience it is both ways. Early on in my trading I phone the SB firms and gave money back to them, I do this less often now, it is swings and roundabouts and balances out.

Spread betting is classed as gambling, it is a gentlemens agreement and both sides know the risks.

Darren did you go straight to D4F or did you tade with someone else and then gave the new comer (D4F) a try. If you don't try you won't know for sure. If you know everything you cannot learn.

True wisdom is the knowledge that we know nothing

When the market is crashing it does not know or care that we know it is going up.

PS Simon is that cheque in the post...........just kidding

 

[capitalspreads]

juanbyte

uummm

problem is, people probably think you are me !!

but thank you for your comments

Simon

 

[juanbyte]

Capitalspreads

No I am not you, there is only one juanbyte.

It is just that I know how hard it is to run your own company, I started and ran an engineering business for several years, I found that no matter how hard you try, you are only as good as your last job.

You can provide a great quality service for years then fail once and it is this what the customers remembers.

I find trading for a living far easier and less stressfull, e.g.no nagging customers.

I just do not understand bemoaning something without trying it out properly first.

I am happy with your tading platform all I ask is that your company acts in a fair manner, e.g. the month after winning 10k with Finspreads strange things happened to the way I was quoted, It was taking 20-40 seconds to get a price (I am not taking times of high demand such as the US open), when I shorted the market and it went in my favour I tried to close and the quote I was given was nowhere near the market or D4F price causing me to be flat, this went on for several minutes and so I added to my position, the market stated falling rapidly and they had to move their price because I was short £44 per point and if it continued untill the end of day it could have cost them a considerable amount.

So all I ask is for CS to be fair, having quotes that follow the market and be consistent.

I do have one question which I hope will be constuctive, I like the graphs on the demo account but have noticed that they are delayed, will they be real-time on live accounts.

 

[Airthrey Capital]

Simon / Capital Spreads,

I too have been using your simulated system, and so far like what I see.

The tightness of the spreads isn't such an issue with me, as long as it is balanced by a superior service in terms of few technical glitches, quick response in transferring money, good communication etc.

I still would like to know a little more about Mr.Rowe's background. I only say this as I do get comfort from some of your competitors knowing that they are publicly quoted or have publicly quoted parent companies. Your website gives very little info about your company in the "About Us" section.

It would also be useful if your options simulator was up and running as I would like to try this out too.


P.S...Were you previously working for Cantor's?

 

[capitalspreads]

We are working on live graph data and are discussing with a provider as to them supplying us with a reasonably priced information.

The problem is that the exchanges want vast summs of money to allow us to provide free graphs to whoever wants to look at them, even Bloomberg (who you would have thought could afford it) do not give away live graphs.

We are looking at either creating graphs from our own data or creating a rolling client access ( i.e 400 people can look at graphs at once but the 401st would knock out the 1st.

But this will not be for a while...

Simon