Best Thread Capital Spreads

[x4x]

Although i agree SB has its advantages but here is a summary of the main disadvantages :

SB : Dealer intervention DMA : no dealer intervention

SB : conflict of interest DMA : no conflict of interest

SB : you trade with a single market maker DMA : you trade with multiple marketmakers and with other traders .

SB : your market maker has full control over your orders DMA : nobody control your orders , nobody knows who you are .

'Dealer intervention': What do you mean by this - if you mean they move the market to take your stop, that's rubbish. I make an average of 20 trades per day and regularly win after the price coming within 0.0001-5 of my stop being hit.

'conflict of interest': I doubt they look at each individual's trade (impossible?), they can surely only look at their aggregated position and protect themselves against loss, and with most losing (due to their own shortcomings) I doubt they would even need to have a conflict of interest.

'you trade with a single market maker' - again, I doubt very much they are looking at each trade individually, individual traders/trades really aren't that important within the big picture.

'your market maker has full control over your orders': now you're sounding neurotic! LOL

 

[tar]

'Dealer intervention': What do you mean by this - if you mean they move the market to take your stop, that's rubbish. I make an average of 20 trades per day and regularly win after the price coming within 0.0001-5 of my stop being hit.

'conflict of interest': I doubt they look at each individual's trade (impossible?), they can surely only look at their aggregated position and protect themselves against loss, and with most losing (due to their own shortcomings) I doubt they would even need to have a conflict of interest.

'you trade with a single market maker' - again, I doubt very much they are looking at each trade individually, individual traders/trades really aren't that important within the big picture.

'your market maker has full control over your orders': now you're sounding neurotic! LOL

and you sound like an a***hole , if u didnt understand what a dealer intervention is then go f*** yourself

 

[x4x]

and you sound like an a***hole , if u didnt understand what a dealer intervention is then go f*** yourself

LOL - so rude!

I've obviously hurt your ego

 

[tar]

LOL - so rude!

I've obviously hurt your ego

no seems i've hit a nerve there with my post !

 

[tar]

tar

i would agree with your point one.. but this in reality only affects a tiny minority of our clients.. over 99% of clients have no dealer input at all

but point 2 .. this is 'perception' not actually fact. All clients seem to think that we are watching them and are interested in their individual actions. All my dealers are really watching is our risk books. After the event of the client trading, has the net efect of their action broken any internal risk limits? if this is the case then CS will go and hedge. In reality this should (in a very small way) help the client as we hedge AFTER the client trade (in the vast majority of cases) and therefore potentially 'move' the market in their favour.

single market maker .. well yes, but the SB companies generally take the best price on the market from which to quote their price. i.e. we take all the multiple market makers and use them for our clients.

control over orders... you only get actioned if the quote reaches the price of your order (the SB company cannot change this) nor can the DMA provider. But on the other hand on SB platforms the SB provider does have the option to 'let the client off' an order execution event (as happened with many US stocks on the flash crash event of May 2010) if you had had a stop order (or margin connected stop) on a DMA platform then you would have had your trade executed.

The unfortunate (and quietly forgotten) fact is that on DMA you would have to get a multitude of people to agree to reject trades on a fat finger spike so this very seldom happens. But with SB providers, as the trades are made with us, we can do this.

I am not saying that SB platforms suit every person or event (of course they do not). As charliechan points out for certain types of trading style then DMA is definately better.

Mr Simon regardless of your explanations , but these still a valid disadvantages unless you disagree then please make it clear ...

 

[x4x]

no seems i've hit a nerve there with my post !

No, on the contrary, I couldn't care less:cheesy:

 

[PipStar]

i would agree with your point one.. but this in reality only affects a tiny minority of our clients.. over 99% of clients have no dealer input at all

The reason why this could be true is because those that are put on dealer intervention eventually leave. Therefore they are not counted in this 99% number which in turn is misleading. If all those that have been put on dealer confirm over the years and whose accounts are now dormant as a result are counted it would give a better idea what percentage of your clients are on automatic execution. I'd be surprised if you divulge the real number :whistling

 

[Black Swan]

'Dealer intervention': What do you mean by this - if you mean they move the market to take your stop, that's rubbish. I make an average of 20 trades per day and regularly win after the price coming within 0.0001-5 of my stop being hit.

'conflict of interest': I doubt they look at each individual's trade (impossible?), they can surely only look at their aggregated position and protect themselves against loss, and with most losing (due to their own shortcomings) I doubt they would even need to have a conflict of interest.

'you trade with a single market maker' - again, I doubt very much they are looking at each trade individually, individual traders/trades really aren't that important within the big picture.

'your market maker has full control over your orders': now you're sounding neurotic! LOL

I think the combination of neurosis and paranoia that exists with many struggling or inexperienced traders is as a direct result of the myths that have grown up around the industry which they then latch onto in order to explain their personal failings. To imagine that the SB firm hunts your stop or monitors your account carefully if you're a small but consistent winner is facile in the extreme..Heh, if you place your stop at a 'big' round number, S1 or R1 then good luck to ya..

I've always maintained that one of the most fascinating aspects of T2W for me has been the study of human behaviour. I used to ponder that if I'd discovered this industry at it's birth (web platform birth approx ten years back), when spreads were 10 pips+ on cable and the fills slippage etc must have been a sight to behold, whether or not I'd have played the game..

This business has made massive strides over a decade, we're getting great fills on; the euro, cable, dax and ftse at 1-2 pips with most of the SB firms, the overall levels of customer service are excellent, the regulation of the industry (imposed and self imposed) has made huge improvements..

Blimey, what else do folk want, as Mr Wolfe would say; "pretty please and sugar on top..?"

 

[capitalspreads]

tar

sorry.. i should make it clear.. most of your differences are just your perception.

we really just never look at client activity as we take over 30,000 trades a day and we only have 2 dealers at any one time watching the book. (they cannot possibly watch the actual trades!)

the SB price is as good as a DMA price as our price comes from them ! how can it be otherwise?

Order execution... same .. but the one major difference is that you cannot be filled on SB unless the market actually goes offered (or bid) at your requested price. i.e you happen to put your bid at the actual low point of a market move (or you offer at the exact high point). But to be truthful this just hardly ever happens.

but as many people say the problems for SB is that if you lose you lose to us.. which somehow makes it worse than losing to a faceless counterpart on a DMA platform. This gives rise to misconceptions over the service provided that somehow Capital Spreads 'manipulates the market' . This is just not true, but trying to prove it is.... impossible .. especially when sentiment gets involved which is always the case when you are dealing with people who have lost money.

simon

 

[tar]

No, on the contrary, I couldn't care less:cheesy:

Ok then , a dealer intervention is when your order goes to a dealer waiting for a requote or a rejection or acceptance , it happens with some clients , i didnt mean stop hunting .

 

[x4x]

Ok then , a dealer intervention is when your order goes to a dealer waiting for a requote or a rejection or acceptance , it happens with some clients , i didnt mean stop hunting .

Yes, that was my mistake - according to an interview with Simon, CS will only put you to DI if you are exploiting a slow or lagging price difference - they don't mind scalpers in the true sense of the word ie. very short term trades.

 

[tar]

tar

sorry.. i should make it clear.. most of your differences are just your perception.

we really just never look at client activity as we take over 30,000 trades a day and we only have 2 dealers at any one time watching the book. (they cannot possibly watch the actual trades!)

the SB price is as good as a DMA price as our price comes from them ! how can it be otherwise?

Order execution... same .. but the one major difference is that you cannot be filled on SB unless the market actually goes offered (or bid) at your requested price. i.e you happen to put your bid at the actual low point of a market move (or you offer at the exact high point). But to be truthful this just hardly ever happens.

but as many people say the problems for SB is that if you lose you lose to us.. which somehow makes it worse than losing to a faceless counterpart on a DMA platform. This gives rise to misconceptions over the service provided that somehow Capital Spreads 'manipulates the market' . This is just not true, but trying to prove it is.... impossible .. especially when sentiment gets involved which is always the case when you are dealing with people who have lost money.

simon

Thats totally irrelvant to the points i've mentioned , maybe you are honest , you dont care about winners you dont watch every trader or order but still the disadvantages i've mentioned are valid :

Do you filter your clients , and you put some of them on a dealer or not ? YES , DMA : NO

Is there a conflict of interest when i trade with CS ? YES or NO ?
When trading on an exchange there isnt .

You see my orders or not ( regardless if you care or you dont ) ?
In an exchange i have full anonymity .

These points are very clear so why we are arguing ? Does this mean SB has no disadvantages but the lack of order types ?!

 

[Ross Spur]

Yes, that was my mistake - according to an interview with Simon, CS will only put you to DI if you are exploiting a slow or lagging price difference - they don't mind scalpers in the true sense of the word ie. very short term trades.

That's all been discussed to death here too many times, but I think you'll find that scalping in the original sense is impossible with SB. SBs don't like short-term traders unless they lose, which seems fair enough.

 

[x4x]

If it comes down to the one point of dealer intervention, it would be great to get official clarification as to when and why this happens.

 

[x4x]

That's all been discussed to death here too many times, but I think you'll find that scalping in the original sense is impossible with SB. SBs don't like short-term traders unless they lose, which seems fair enough.

As stated, this was denied in an interview I read.

 

[Black Swan]

That's all been discussed to death here too many times, but I think you'll find that scalping in the original sense is impossible with SB. SBs don't like short-term traders unless they lose, which seems fair enough.

I'd suggest SB firms love the vast majority of spread-betters who trade off low TF charts...the guys who try to pick up their pennies in front of the steamroller..kerching..

 

[x4x]

I think the combination of neurosis and paranoia that exists with many struggling or inexperienced traders is as a direct result of the myths that have grown up around the industry which they then latch onto in order to explain their personal failings. To imagine that the SB firm hunts your stop or monitors your account carefully if you're a small but consistent winner is facile in the extreme..Heh, if you place your stop at a 'big' round number, S1 or R1 then good luck to ya..

Agreed - I've never suffered from this problem purely because I have never used brokers charts, always 3rd party. The prices quoted by my SB has always matched (as near as dammit) my chart price. In all the years I've been trading I can never remember feeling I've been stopped out unfairly.

 

[charliechan]

simon - so you dont seem to offer many markets do you like us stocks etc. thats another reason to go dma. eg i can open an account with interactive brokers and trade all the main stock and futures markets in the world, so why should i go for a spread betting firm that will rip me a new a*rs hole at the first opportunity, while charge me interest for the privo?

as for icebergs and order types, i think youre wrong (yet again). why would a sb provide iceberg functionality when they would rather just fill the whole order in 1 fill which is better for both parties? do you know what an iceberg order is and why its used?

as for dealer intervention and stop hunting, here are the facts:

joe goes long at 5, he places his stop at 2.75. the sb algo sells to him at 5, and gladly takes his stop order too. lets say the REAL market is trading at 4.75 - so joe is already at a loss, but thats another story... later on the real market is at 3.25. sb algo is quoting everyone else at 3 bid. but wait! sb algo knows it has a stop on its book at 2.75. there is nothing that says sb has to quote all customers the same price, or x ticks away fron the REAL market. so, while fred sees 3 bid, joe sees 2.75 bid and his stop filled. no human intervention there fellas! yet hang on, the REAL market never even went there.

suddenly price is quoted at 3 again to entice joe to get back in for another bath. if joe does get in, this time with luck on his side (boy does he need it!!). price goes up to 6. fred sees 6 quoted, but joe sees 5.75 as sb computer knows joe is long, so it knows joes next action will be to sell - so why quote him at 6 when it can buy back at a lower price?

thats what happens folks. you can see that such logic isnt hard to code into any software, and the odd tick away from the REAL market can easily be explained as 'spread'. i know because a good friend demoed his firms algo to me - sorry, thats some bloke down the pub to you lot!....

why do you think all sb companies love pushing their 'free education' programs and teach what seems to be a good idea - our friend the stop loss order? what nice guys having such an interest in our financial well being!!

finally simon, as for that report, clearly, as you acknowledge, it wasnt commissioned by any exchange - i thought as much. good of you to admit this. you earn an extra big pair of floppy shoes!

 

[charliechan]

further more simon, id love to see the spread you quote on something like a butterfly. given these are multi legged strategies used to harness volatility, the spread you would charge would negate the point of doing such a strategy. lol.

does your clown car really run on glitter?

 

[Black Swan]

Agreed - I've never suffered from this problem purely because I have never used brokers charts, always 3rd party. The prices quoted by my SB has always matched (as near as dammit) my chart price. In all the years I've been trading I can never remember feeling I've been stopped out unfairly.

I use PRT (the package linked to IG, cost 2 trades a month..) and Marketscope from FXCM..there may be a pip difference on the charts..wtf..who cares..honestly? They're both very good chart packages for the retail investor..

I really wish folk could move on from the SB firm and broker bashing and take some responsibility for their failings..Once that Rubicon is crossed I'm sure their trading would improve.