As I have pointed out before, the size issue could in some cases be applied when it comes to dealer intervention. The SB is making an offer by giving their quote, they just cannot refuse to deal whenever it is convenient for them. You also have Internet e-commerce compliance for every country (I have to look it over), this together with the MiFID financial directives, makes a very strong case for the client.
Systematic Internaliser : a Systematic Internaliser is a firm that executes orders from its clients against its own book or against orders from other clients. MiFID will treat Systematic Internalisers as mini-exchanges, hence, for example, they will be subject to pre-trade and post-trade transparency requirements (see above).Still, my point is that spread betting firms are not market makers; there is no product exchanged, like shares or futures or options; they do not make a market, just take bets, like bookmakers do.
Eduardo.
What about CFDs? Most of the CFDs offered by brokers, is not products listed directly at the exchange. Are they market makers or not?Still, my point is that spread betting firms are not market makers; there is no product exchanged, like shares or futures or options; they do not make a market, just take bets, like bookmakers do.
Eduardo.
Sorry Eduardo, I don't agree. CFDs are financial instruments, whether this applies to SB is debated, but in my point of view SB must be regarded as being financial instruments, as thus being under the jurisdiction of MiFID. It would be interesting getting some feedback on this subject.No they are not; besides a CFD is nothing more than a posh name for a bet, really; that and the fact that you are treated as a creditor rather than as a customer if things go pear shaped...brrr! Danger danger! And you pay tax, too!
Seriously now, market makers make markets, spreadbetting firms and brokers are not market makers, as they follow the underlying; market makers price the underlying.
If you trade through the Order Book, you are dealing directly in the market, and for a time make your own price (until it is accepted), but that makes you a trader, not a market maker, as you do not offer both prices, nor are required to, nor are a member of the exchange.
It doesn't matter how they are treated or called legally, officially, etc...If it quacks, chances are that it is a duck, don't you agree?
Eduardo.
No they are not; besides a CFD is nothing more than a posh name for a bet, really; that and the fact that you are treated as a creditor rather than as a customer if things go pear shaped...brrr! Danger danger! And you pay tax, too!
Seriously now, market makers make markets, spreadbetting firms and brokers are not market makers, as they follow the underlying; market makers price the underlying.
If you trade through the Order Book, you are dealing directly in the market, and for a time make your own price (until it is accepted), but that makes you a trader, not a market maker, as you do not offer both prices, nor are required to, nor are a member of the exchange.
It doesn't matter how they are treated or called legally, officially, etc...If it quacks, chances are that it is a duck, don't you agree?
Eduardo.
Again, if it quacks like a duck, it's probably a duck; a stock option is a financial instrument for which there is an exchange (it's called a "derivative" and lots of instutions make lots of money selling them); if you and I come into an agreement to buy and sell something between us, be it goods or services, in a Court of Law, this is called a contract, not a financial instrument! That is why it is called Contracts for Differences.
But there is no exchange in which to trade it, only an agreement between two individuals or persons (in UK Law, a company is a person); so you may call it what you want; you (or Parliament for that matter) can give it any privilege, name, status, etc... you want, it is still a bet: you take one side, say long, the broker takes the other side, say short; if the broker is smart, he'll hedge the transaction, but at the end of the day, you are left with that - a bet, no matter how you dress it!
Eduardo.
This is nothing new to me. Sorry, my post from the regulator is quite clear on the point ZEPPO.I would suggest that you read again my last post; there is a whole industry out there making a living out of giving names to things; they are called politicians and lawyers.
MiFID are regulations, but no matter how you much you regulates, a leopard still got black spots, you can't change that!
If you trade CFDs, you are regarded as an intermediate customer, whatever that means; the reality is that you are a creditor to the company, and your cash a source of finance, pooled with the rest of the business working capital; also, you are taxed - but look at the essence of the transaction: there is no difference between that and a spreadbet.
Having said that, there are CFDs which I do regard as financial instruments: SG Turbos; they are traded through an exchange, there is a market maker to make a market (presumably SG, but that is my assumption) and there is a well defined process to calculate its value - no goal posts shifting here; they are also dealt through a broker, meaning that you get the same price with whoever you deal.
Eduardo.
If you trade CFDs, you are regarded as an intermediate customer, whatever that means; the reality is that you are a creditor to the company, and your cash a source of finance, pooled with the rest of the business working capital; also, you are taxed - but look at the essence of the transaction: there is no difference between that and a spreadbet.
Having said that, there are CFDs which I do regard as financial instruments: SG Turbos; they are traded through an exchange, there is a market maker to make a market (presumably SG, but that is my assumption) and there is a well defined process to calculate its value - no goal posts shifting here; they are also dealt through a broker, meaning that you get the same price with whoever you deal.
Eduardo.
Yes, DMA CFDs, I guess there could be a problem with liquidity?
Ok, thanks a lot.
