Best Thread Capital Spreads

[Spreadbetteur]

"When a request for a price is received the dealer is not aware if the trade is to open or to close a position, or whether the position is onside or offside. The trade is considered purely in terms of the current market level"

Marc - On what basis does your dealer decide to fill or not ? From our experience it seems that is tied to if the client is up (price expired) or down (fill) !

 

[t2wjunkie]

Newbie post - Capital Spreads

Hey everyone

Apologies in advance for what might seem like a newbie question.

I have been on capital spreads lately. Last night, the dow closed at 10513, and I was short 10517 on the close. Having missed the 9pm close, I didnt manage to close out my position. Thinking I'd get up early this morning (CS opens again at 7am), it has jumped up to 10540! Is this really possible despite the fact the markets were closed overnight? And that CS weren't taking in any orders??

Would appreciate any advice on this.

Regards

xxx

 

[Spreadbetteur]

The "Dow" you are betting on with Capital Spreads, or most other SB's, is not actually the same as trading the Dow directly. The SB's usually offer a price 24/7 during Mon / Fri.

Usually if the Cash Dow (SB's Dow) moves away from the close overnight, it usually returns to the yesterday close again before the open, so you might be lucky.

With Captial Spreads you are at risk when they are closed overnight, as your stop will not be honoured, they will take you out of the market at the price when they open in the morning, which might or might not be an advantage.

Be carefull of Capital Spreads. Many are complaining of delayed fills, which means you can place an order and have to wait 30 seconds to get the order confirmed. If the market moves in your favour during that time, there is a high chance they will not fill you and offer you a "Trade Expired" ticket. If the market moves against you during that time you get filled every time !

Don't be fooled by the PR exercise Simon (boss of Cap) and his assistants execute well on this forum.

 

[capitalspreads]

microsoft

I am afraid that missing deals when the market goes for you but being filled when it goes against is dare I say say it ..real life. We have exactly the same sensation in direct access when hedging client positions. If I try to buy the offer but someone gets there ahead of me then, tough, I have missed it and there I am sitting on the bid (or worse the market moves way away and I have to pay up further) or conversely I put my bid in, the market moves against me immediately, and lo and behold there I am filled at my price whilst the market is 10 points lower AND I am still waiting for my fill.

I can assure you that direct access fills, whilst admitedly faster than us, are still not instantaneous by any stretch of the imagination.

This problems over filling orders only really affects FX markets, as these are of course the most capricious markets from a quoting viewpoint (there is no definitive exchange), we hardly ever turn down trades in any other markets.

Microsofts' comments about increasing numbers of complaints is odd as we have not experienced any such increase at this end or on this web thread (which is where you would most notice it) and over which, incidently, I have absolutely no control whatsoever. Also his rather disengenous comment about Wall Street fills out of hours is sheer mischief making as he is well aware that the Wall Street is quoted from the futures contract which is traded whilst the NYSE market is closed. As the futures in question had moved 40 points during the small hours I wonder how he would quote the cash price the next morning, the question was not concerning stop slippage it was concerning the actual price. 97% of all the markets we quote are not traded out of their exchange hours and traders in these products (the FTSE 100, CAC the DAX every share price and most commodities for instance) know full well the facts of life concerning slippage or gapping on opening.

FX is the one market that consistently opens differently to the previous nights close. CS is not unique in not offering 24 hr trading less than half the SB cmpanies do and of those who do most do not have strict stop policies in place and you are therefore at no greater risk using CS (with its stop policy) than using one of our competitors (the opening price on CS would be the same as the price at that time on IG, CMC, City or Cantors etc etc)

I am also at a loss to understand why if, as Microsoft says, CMC always fill his trades (and their spreads in FX are pretty much the same as ours) he is trading through us? Is there some other advantage that outwieghs this perceived problem?

As I consistently say, we fill each and every trade as best we can BUT we are not a charity to be picked off by every scalper who comes along trying to trade on price delays or incorrect prints thinking that he/she is being cleverer than us. We quickly identify these people and then begin to check every single trade. Scalpers are not the friend of other traders as they take up our dealer's time and delay fills for other clients.

Of course some would say " well he would say that wouldn't he". You cannot please everyone all the time.

Regards

Simon

 

[Spreadbetteur]

Simon

What happens if you leave a position overnight, when Captial Spreads is closed in these situations:

A - Price goes through the clients stop and remains below it (assuming client was long), when you open in the morning - Do you close the clients position at the market price when you open or at the stop level ?

B - Price goes through the clients stop, though returns above it (assuming client was long), by the time you open - Do you stop the client out at his stop or leave the position running?

There have been increased delays in getting filled in the last weeks. Your Senior Dealer, Marc, posted this comment on 12/08/05:

"It seems that our tight spreads have attracted a greater volume of trades than we had planned for at this stage, and this has had a small effect on deal times (although outside of US figures our fill ratio/time is still very good). We have commissioned a completely new pricing engine but this will not be ready in the immediate future.

In the meantime, we have urgently addressed some areas that will improve our deal acceptance. One upgrade will be implemented next week and another major upgrade in two weeks time (we hope)."

What is the latest update on improving your deal acceptance ?

There are Pros and Cons in the Capital Spread v CMC argument. The important negative with Capital, is the risk of the 20 sec + delayed confirmation, not just in a fast moving market.

 

[capitalspreads]

microsoft

a) is filled at the opening price as with all our markets that gap. Every order is filled on an "our quote" basis. When our markets are closed there is no quote and therefore on the open the first quote would be the activation point.


b) the position is left running as it has never hit the price in our quoting time. This is by far the most common occurence as often the Japanese markets move currencies one way and then back again in the early morning. So quite frequently clients who would have been stopped out are not.

Simon

simon

 

[Spreadbetteur]

Simon

If a client places an order with an "If Done" stop: - If the order gets filled badly, from the clients view, where is the stop placed ? is it place at the original request or is it adjusted with the bad fill.

Here is an example, in case the above does not make sense:

Client places a Rolling Cable long order 1.8000, with an if done stop of 1.7980

If the fill is at 1.8007 where will you place the stop ?

 

[Mr Chill]

Simon

If a client places an order with an "If Done" stop: - If the order gets filled badly, from the clients view, where is the stop placed ? is it place at the original request or is it adjusted with the bad fill.

Here is an example, in case the above does not make sense:

Client places a Rolling Cable long order 1.8000, with an if done stop of 1.7980

If the fill is at 1.8007 where will you place the stop ?

I have been using c/s now for about 6 months ,i frequently place orders with if done stops and limit orders ,and as of yet i have never had any problems ,it will however only improve things if or when they go 24hr.

 

[capitalspreads]

if done stops and limits remain as they were set by the client.

If we did any differently it would be impossible as everyone would complain at levels being different to those chosen etc...

everyone can get their head around slippage but a unilateral changing of the order levels by us or our computers would be ridiculous.

Simon

 

[alf25]

hi simon
what about to reduce spread to 0,4 on SP daily future like finspreads.

and when you increase 4 min to 10 ?

thanks

 

[capitalspreads]

alf25

the spread on s&p rolling daily is 0.4 and has been for quite some time... I suspect that finspreads narrowed because of us rather than the other way round...i see that our daily FUTURE is still at 0.5 and as nearly all our clients trade on the rolling bet we prefer to keep it that way, as having to close out of hedging positions at 9.15 in the evening is very irritating for my dealers. In the same way that you see odd moves going on in the FTSE futures at just after 4.30, I sometimes wonder whether this is caused by the SB companies getting out of daily FTSE hedges at that time. IG, Cantors and City do not have a rolling bet ability (aside from you actually requesting them to roll for you) and this means that the 2 point spread on their daily product must be traded into and out of each day. Therefore, as they are the biggest of the SB companies, they probably have quite sizeable positions to trade out of at the close of the day when the market is not very liquid.

The ticket times is being discussed. But is not a done deal.

simon

 

[vedrex]

Can they steal your money?

Hello all,
I am registered with Capital spreads and was wondering if the spread bet companies have any obligation to follow the real life quote with their spread.

I bring this up because ( as we all know) oil is around the $65 mark. Yet the weekend before last I saw Capital spreads quote oil as $60. This was over the weekend and no trading was going on. The market closed friday and opened monday around the $65 mark. What possible reason could they have to quote so low. I also wonder did this trigger stops on anyones long position?

Lets say you go long on oil and something happens, like a major supply failure or a global political meltdown resulting in war and price of oil shoots up to $100+. What guarantee do I have that I will be able to take my money out?

 

[coolTrader]

Delay In Executing Trades On Capitalspreads

Simon,
what can be done about the price expiry that happens when trying to close positions/take trades. It is looks like trades are being rejected deliberately.

Why do I say that? When I close the my trade or take a new trade it takes a long time before I get a response and then the price moves up and down, Immediately it goes against me it the ticket comes back price has expired. (Even if the price moves 1 point away from my asking price)

This is a daily occurrence now with your trading platform when trading the currencies. One of the reasons I have used your platform in the past was because of the ability to trail your stops quite easily and also the margin.

The margin is meaningless if every time we try to take a good trade we dont get it or we get delayed and get bad fills

I am sure you have an audit trail in your system to see when buy/sell was requested and the price at the time it was requested and the dealer response.

I would have attempted to us the limit order but.. I am not confident at the moment that it will show up at the appropriate time if at all as it takes forever to fill stops...

One may say why don't I use the phone well... I want an internet based platform where I dont have to keep calling using my phone. and this defeats the purpose of having an internet based trading platform. I left finspread for this very reason. Though their execution was flawless, when available.

I hope you will look seriously into it.

Thanks,

 

[capitalspreads]

vedrex

as I have mentioned many times on this thread ... whatever happens out of out trading hours does not trigger stops or limit orders...... our price feeds are linked to the exchanges and if for some reason the price on our closed market in oil said $60 over the weekend that is probably because there was some work being done by the exchange.

Our terms and conditions make it quite clear on what basis we fill orders and when we do so we must be able to justify to our clients that the orders have been fairly filled by reference to the market quotes /charts /trade ticker etc.

If we filled clients at stupid out of hours prices dont you think this thread would be full of it.

We are regulated by the FSA and as such all of our clients funds must be held in segregated funds accounts (in our case with Barclays Bank) these funds are reported every day to the FSA, as is each and every trade made by our clients, from a £1 bet in Vodafone to a £500 bet on the S&P. As we are regulated our clients also benefit from the insurance cover provided by the FSA (I think that this is around £48,000 per client).

The client seg account must hold all current cash positions on client accounts and the value of all WINNING positions but we cannot deduct losing positions from this sum. This means that clients are heavily protected against liquidity problems in SB companies. Actually clients funds are much safer in an SB company than most financial trading institutions. This is because every SB client must be designated as a 'private client' which means that we (Capital Spreads) cannot use your funds as margin to hedge positions (even to hedge positions taken by you!) we MUST use our own money. Whereas if you have an FX account or a direct access futures account the chances are that you will have been designated as an 'intermediate client' which means that the company through which you are transacting business is under no obligation to put your money in a seg account and can use your funds as margin against other positions held by that company.

For those of you who think this unlikely I would direct you to the activities of Griffin Trading back in '98 when one rogue dealer took down a company and all the traders who had funds with that company lost their money (or most of their money). Because they were designated as non private clients (professional) they were not covered by FSA insurance.

Cooltrader

the vast majority of trades are filled (at this end) within 4 secs. Some take longer of course. The problem with trade rejections is that you only ever remember the ones that go against you. Traders tend to forget the many ... many times that we accept trades when the market has pipped in their favour as the temptation is just to say wasn't that good trading ... I caught Capital Spreads that time. Whereas if we reject a trade we are being unfair.
We do try to fill all clients as fairly as possible but sometimes you have to say .. no!

We are making an upgrade to the site early next week which should speed up trade acceptance even more (cross fingers) .

I must say though that I have accounts with other SB companies and our fills do seem to be faster than the majority!

We are always trying to improve the systems but these things take time. Unfortunately we also depend upon client computer power. Sometimes a client is trading on an old low processing (by modern standards) pc. This will naturally slow down the whole process.

On another note the deal ticket has now been put to 10 mins before closing.

Simon

 

[JillyB]

With regard to the Deal Ticket time - thanks for that Simon. I've been trialing your demo account for the past month and have been impressed, apart from the fact that the prices don't seem to follow my charting software prices - 5 to 10 points out - Is this something just with the demo accounts and does the real system follow the market more closely? I currently use CMC and their prices only seem to be 1 -2 points away from actual.

It's just that trying to work out stops and limit orders is not easy with such a difference.

 

[coolTrader]

Thanks Simon! I do remember the good trades and I have posted here saying your execution had improved .

This is not a finger pointing exercise. I just found it occurring too often for well over 2 weeks and I thought I should mention it.

The deal ticket change is great.


Thanks

 

[vedrex]

Thanks for the above explanation.

 

[alf25]

hi simon
thanks for 10 min.

 

[capitalspreads]

jilly B

demo prices ... in general the demo prices are the same as the live site.. the only (major) difference can be when what we call the 'Fair Value' on the exchanges changes. The Fair Value is the difference between the Futures price (on which we base all of our quotes) and the actual cash price. ie for the FTSE the difference between the September Future (currently the front month future) and the FTSE 100 ticker. This difference is made up of dividend payments and interest rate costs between now and the expiry date of the Future.

On the Demo site occasionally my dealer forget to update this Fair Value difference as from out point of view it is not as critical as the live real money platform. Unfortunately due to the movements of the Fair Value (especially when big shares go ex div) this means that our demo price can sometimes look a bit odd.

Be assured that the live site is very closely monitored !!

Simon

 

[capitalspreads]

XDA

I have been asked several times recently about XDA availability.

We are looking at this possibility but the development is expensive and to be frank (becus of the limited processing power of the average handheld) not very satisfactory when you quote tight spreads as we do.

The only companies that offer handhelds are the ones with much wider prices than us as, presumably, the delay in trading and fills is therefore less of a problem.

We would be unhappy about offering a service that had different prices on the XDA than on the live platform (as one of the SB companies does). And I can imagine the number of rejected trades on our site may reached epidemic proportions due to the delays involved with this instrument.

This does not mean that we are ignoring it .....far from it..... it is just an explanation as to some of the problems.

Simon