Best Thread Capital Spreads

[kevin546]

Levll

This is one of a number of issues surrounding SB and one SB company from another. Part of the trading plan is to establish how a broker or SB may operate and be aware of it and work around it if possible, if not then you may have to change the instrument you trade or the broker IMHO. Knowledge is important, correct knowledge is everything.

 

[kevin546]

Dave

You have to go with what you are comfortable with, I prefer to chart the SB price because I do not get odd skews I also avoid markets I know are likely to attract the sort of problem that Levll has displayed.

I have to say in my limited experience of CS they do not throw the price around as much as D4F on the prices I have viewed but that does not mean to say on the faster markets there maybe differences.

 

[capitalspreads]

Blimey

I have been a bit busy for a few days and did not look in the Trade2win site .... and I see there are three pages of new comments .... you will forgive me if I miss specific questions on this post ... if I do please ask them again and I will get round to them.

Live charts

this has been, obviously, a PR disaster on our behalf ... we were hoping to use our own prices to create charts so that clients would have a June chart for june prices etc... unfortunately as we quote our Daily Rolling prices at such a tight spread to the market the exchanges came back to us and said words to the effect of 'your quotes can no longer be considered derived prices and we will therefore charge you a per client fee for chart information'. Rather like if you want live prices from ADVFN, for example, you will have to pay up to £50-£60 and more per month (!!) for the information that you would, effectively, get for free from us (and the other SB companies). This means that we are having to come up with another solution to this problem. This is taking us some time.

24 FX trading

We are working on this but it will take some IT development time because... We at the moment do not intend to have night dealers, because of the extra cost and the limited actual demand. I know everybody says they will deal during the night etc... but when it really comes down to it night desks in dealing rooms are absolutely dead..this is not just an opinion it is a known fact... so this means we are starting to design an automated dealing program which will do the job for us. This will take time. sorry

Bias prices.

Please guys .. I have commented on this so many times.... WE NEVER BIAS PRICES.... if a price appears to be biased it is probably because you are not comparing like with like in some way.... We pay large sums of money to receive Raw Data feeds direct from the exchanges. In indices, for example, we just take the futures bid price add the offer price and divide by two and then add half our spread to each side. The price is then rounded to nearest integer. There will also be an adjustment if the market expires at a different time to the future in question. In general you can see the underlying price feed that we use because it is also the code for the chart that you can see in top RH corner of the chart.

Delay on prices

I am sorry ... but in answer to this I will take an extreem example, we quote CABLE 3 pips wide ... if our prices were delayed significantly we would just get murdered all day long with clients trading at disadvantageous (for us) prices. I continually look at our feed for cisco and google and although there is of course a tiny delay (after all we get the info from the exchanges and then have to put it through our pricing engines and then out onto your web pages) I cannot see these odd price moves that are commented on by some providers on this thread. If you have the deal ticket open the prices change every second or so. If you are just generally looking at a page then, yes there is an update every 5 seconds or so, if it is required.

Providing all of these tradable markets to our clients is not cheap.. every exchange..service provider .. IT developer and yes even the good old FSA require their cut. Every upgrade that we develop has to be wieghed against the cost and the actual real benefit that it provides. Live charts are a good example ... If a dealer wants live charts so badly to trade then go and actually pay for them (!) (there are dozen of providers out there) when you see how much you are charged for even a limited range then you might see what problems we have when trying to give them for free to thousands of clients. The exchanges make a massive income stream from providing them, do you think that they are going to let us just give them away without doing something about it?

Aside from the last comment we are still looking at some form of solution.

The spreads on our rolling bets are so tight when you consider that you pay no commission or Stamp Duty and you only have to put up margin of as little as 3% (in FTSE 100 shares) or 0.3% in the case of rolling currencies when compared to the money required to actually buy the stock/currency (etc) in the physical market.

In this environment there is always a trade off between what is possible and what is bearable. If you think any of our prices are wrong or slow or whatever then... TRADE on them. This will put you in at the right side of the market thus improving your chances of winning and as soon as they correct then trade out and take your profit!

There was also a question on what markets do we quote . In the FTSE we quote the next two quarters (currently march and june) and the next serial (april) we quote the same spread for them all (4 points), unlike our competitors who widen them for the further dated ones. We also quote the Daily (3 points) and rolling daily (2 points). We dont do 'special offers' of temporarally narrowing our spreads in a tiny number of markets in an attempt to blind our clients to the remaining 2000 (or so) markets that have not changed. Our prices are tight and will always remain tight.

The point about forward prices always being higher than 'spot' prices. This is again a tired old chestnut. The reason that prices in the future are higher is because we have to account for the cost of funding between now and the expiry of the bet. If you make a bet , we buy the shares... this costs us money.. which is therefore not now sitting in our bank account earning interest (or we borrow the money on which we have to pay the interest).. this means that there is a quantifiable price that a share should reach in the period of the bet. At the moment we use an interest rate of 4.8% for UK shares. Differing SB companies may use slightly different funding rates which will usually be the reason for the slight difference in the mid points of forward prices. (that and also in the odd cases where we differ in our expection of forward dividend payments)

And on that note I will go and have a cup of coffee.

Simon

 

[kevin546]

Simon

Well done for taking the trouble to respond on a weekend.

 

[Jyde]

Simon, just out of curiousity: Why are the prices shown up to 5 secs delayed?

 

[cj12]

I think simon have answered this for you.

simon
Delay on prices

I am sorry ... but in answer to this I will take an extreem example, we quote CABLE 3 pips wide ... if our prices were delayed significantly we would just get murdered all day long with clients trading at disadvantageous (for us) prices. I continually look at our feed for cisco and google and although there is of course a tiny delay (after all we get the info from the exchanges and then have to put it through our pricing engines and then out onto your web pages) I cannot see these odd price moves that are commented on by some providers on this thread. If you have the deal ticket open the prices change every second or so. If you are just generally looking at a page then, yes there is an update every 5 seconds or so, if it is required

 

[DaveJB]

Seconded,
thanks for the lengthy reply - as I read it your quote page is running on a sort of refresh cycle, which is different from what I'd see with a dealing ticket showing onscreen. I guess that just means I have to keep a dealing ticket onscreen then while I have a bet in progress, at least whenever I think I might be looking to exit, if I want to see the price on CS move inline with the market.

Bias - I accept the point readily enough about being slaughtered if your price deviates from the market too much, which is why it seemed unlikely to be on purpose, which is why I asked about CSCO - it was definitely off centre for an extended period, and I suspect it's through rounding. I've a trade ticket showing 1836 (CS 1836-1841 as stated) and the bid:ask is readily obtained from the relevant period of the tick chart as 1837-1838... -1/+3 as stated. Going into 1846 bid/ask was at 1838-39, mid 1838.5, 2.5 each way gives 1836-1841 which is your quote. About 10 secs into 1846 the price drops to 1837-1838, 2.5 off the 1837.5 mid gives 1835-1840 - with your quote appearing to sit on 1836-1841 this leaves an apparent offset onscreen. I wasn't aware that the display of prices on the portfolio screens etc updated less frequently than the dealing ticket display, the time lag would explain why there seemed to be this small 'bias'.... as I said, it just means a dealing ticket has to be onscreen a bit more often.

Please note that it isn't a case of chasing you determined to 'prove' a bias, it's simply that there's something apparently incorrect in view - those price moves WERE visible, I am reasonably happy now that I know why ... it's basically all a function of having a price refresh on CS screens that is delayed.

I do have to say that

TRADE on them. This will put you in at the right side of the market thus improving your chances of winning and as soon as they correct then trade out and take your profit!

would require a somewhat bigger gap to be apparent, got to take the spread into account remember.

 

[DaveJB]

By the way -
will the automated dealing program (as and when) handle normal trades, or are you just planning to use it overnight etc?

 

[Perrington]

Yes, thanks for taking the time out to post on a sunday Simon, much appreciated.

My personal opinion is that moving to an automated system for laying bets is the answer with regards to speed.... this is going to save CS resources in terms of not having to pay staff to visually accept or reject bets all day, and opens the market to 24 hours trading with only the smallest of management required.

As for the speed delay by having to process through your own system and onto the webpage, well, considering todays technology, this time in not even percieveable to the human eye. However this brings me onto one question you missed Simon, are you planning to offer a downloadable dealing interface in addition to your web client ? increased security & smaller ping times are the most obvious benefits.

 

[Roberto]

this means we are starting to design an automated dealing program which will do the job for us. This will take time. sorry

We understand this, Simon. You've already explained well and clearly why this will mean limiting position-sizes at night, and people understand and accept that. But your comments above don't answer my question in post # 1239 on page 124 of this thread.

Sorry if I seem to be being a bit pedantic about this, but I'm actually asking this question on behalf of several people whose actions (i.e. whether to wait for you, or open accounts elsewhere) depend to some extent on your answer, so I'd be really grateful if you could reply.

Not trying to have a go at you at all, Simon, but honestly we did put quite a bit of thought into how we could phrase this question to make it as easy as possible for you to reply. But we still seem to have screwed up, because you haven't told us what we need to know! Sorry to be pushy, but a simple "yes" or "no" will suffice.

 

[Jyde]

I think simon have answered this for you.
...

Ok, let me rephrase my question:
Just out of curiousity, why are the main prices screen only UPDATED every 5 secs or so, when the dealer window updates more timely? Is it a technical limitation you have?

All the best...

 

[Malele]

Hi everyone!

I would like start trading spread betting, I have been reading many articles and books about it, I think I have gained a little knowledge but I believe the only way I wil understand it better will be if I start trading right now. So I have been checking many brokers to open an account and I still don't know which one to choose because most of them ask for a minimum deposit of 1,000 pounds but I would like to start with less than that. I don't know if you know any broker which can offer less than that. Another thing is that they ask to fill in forms and then I have to send it to them and wait if they accept me, this things meke feel stuck and think that I will not have a chance to start trading, I feel sometimes hopeless because I don't have 1,000 pounds and also in the form they ask for many things (financial questions) that I fell like it will not apply for me as a beginer.
Is there an easy way to apply for an account with an on line broker? or Can anyone help me to understand really what do I have to do to open an account to start trading spread bettig?

Many thanks, I will really appreciate any help.

Malele.

 

[che]

Finspreads let you open for £100 and let you trade for the 1st 8 weeks or so for 1p/ point6.

Good luck

----------------------

Not started myself - just researching

 

[Jyde]

Hi everyone!

I would like start trading spread betting, I have been reading many articles and books about it, I think I have gained a little knowledge but I believe the only way I wil understand it better will be if I start trading right now. So I have been checking many brokers to open an account and I still don't know which one to choose because most of them ask for a minimum deposit of 1,000 pounds but I would like to start with less than that. I don't know if you know any broker which can offer less than that. Another thing is that they ask to fill in forms and then I have to send it to them and wait if they accept me, this things meke feel stuck and think that I will not have a chance to start trading, I feel sometimes hopeless because I don't have 1,000 pounds and also in the form they ask for many things (financial questions) that I fell like it will not apply for me as a beginer.
Is there an easy way to apply for an account with an on line broker? or Can anyone help me to understand really what do I have to do to open an account to start trading spread bettig?

Many thanks, I will really appreciate any help.

Malele.

CS here took care of me within a few hours. Living outside the UK, the only difference was that I had to send a few scans of bank account or utility bills, followed by snail mail hardcopies. No problem whatsoever. Also, you only have to make funds available to cover your bets.
Why don't you give them a call, the are really friendly and helpful?

 

[capitalspreads]

jyde

yes this is currently a technical limitation to our platform... we are commisioning a push prices model but...this is VERY expensive .. at least for us it is (it will probably cost us as much as our original platform!!) Push prices have only just arrived at the coal face with some of the SB companies, (generally those with the biggest pockets) the prices in the pricing engine which runs limit and stop orders are as fast as the deal ticket. So you will never miss out on an order even if you dont see it on line.

Perrington

a downloadable platform is not currently on the menu , sorry.

Roberto

missed your question...our intention is to get a system for dealing with night trades . In general along the lines of / limited size/ limited position building/ wider spreads (sorry). The stops/limit/new order monitor will automatically fill out of hours. I suspect that this will mean more stops get hit !!!

Dave JB

i will try to monitor the us shares over the next few days and see what is going on. If there is a problem of some kind I will raise it with the IT guys and sort it out.

Simon

 

[Jyde]

...(generally those with the biggest pockets)...
...

Ain't that always the case? Thank you for your honest answer, though. I guess I can learn to live with it, that being the reason.

The stops/limit/new order monitor will automatically fill out of hours. I suspect that this will mean more stops get hit !!!
Simon

Even though you say that statistically this is often bad for us, I think it's the worry about things outside our own control... Besides, if we get stopped out overnight, we only have ourselves to blame/thank. Rather wake up to a missed opportunity than a margin call!

All the best...

 

[mustafa]

Simon,
any comments to my post no:1245 on page 125?
hope to hear from you,
Best regards,
Mustafa

 

[Roberto]

Roberto, missed your question...

Still missed it, Simon.

My question was "Is it still your current intention, as you've told people by email, to have this up and running by May"?

Please appreciate that in no way do I wish to sound aggressive about it, but people need an answer to this question because if it's "no", they need to make decisions about opening accounts elsewhere. You can appreciate this, I think?

 

[MacroDog]

Simon, could you explain why moving from human to automated dealing during the night would require wider spreads ? What do you expect to absorb with automated trades that you dont with human trades ? Just curious, thanks. Or anyone else can answer it if iam missing the point.

 

[capitalspreads]

Mustafa

1.24 hrs trading(it does not mention on the website)
this will be in line with existing comments

2. forex calendar,currently i use fx news,but would be nice to have it under 1 website.
looking at this in conjunction with partner ..but not urgent from our viewpoint

3. forex bet converter.(useful for anybody new or interested in fx spreadbetting)I believe D4F have one on their website.
we were looking at this and it will be there ..i.e £1 bet =xyz dollars etc

4.mobile dealing.not on specialised or selected handsets like igindex,but more like tradndex,dealing available on any wap enabled handset.
not on the horizen yet...


roberto

the coding will be started at the begining of april hopefully will be inplace some time in may (with emphasis on hopefully)

Simon