city index and whitbread

[thebesttrader]

city index were quoting for june whitbread somewhere around 1070 a few weeks ago, so i went long, current price being around 1200p

the next day, around 4:45pm I got a call saying that the quote had been a mistake and that the opening price had been corrected to 1210 or something.

after returning froma trip abroad i phoned city index, they said that they were expecting a dividend but realised it wouldn't me made anymore. (whitbread had made a special dividend in may last year)

so according to city index, they are allowed to change the opening price in accordance with their terms

"14.5 This clause applies if a dividend is declared or paid in respect of
any equity which is unusually small or large or unusually early or late
(compared to dividends declared in previous years). In this case City
Index may (acting reasonably) make an appropriate adjustment (which
may be retrospective) to the opening level of a bet relating to that
equity, in order to reflect that dividend in the opening level of the bet."

But whitbread didn't declare or pay any dividend around that time. They hadn't said that they would pay a dividend, and hadn't said they wouldn't. The case is that city index thought they would and then changed their mind and the opening level of the bet.

i won't be taking this laying down, but wanted to know anyone's thoughts/ and whether anyone else was involved in whitbread with city index.

any thoughts/opinions greatly appreciated

 

[the blades]

this is the kind of thing i'm talking about in my recent posts....it's flagrantly ridiculous

Hello Jason,

The quote was obviosly wrong - it would have been a huge dividend, wouldn't it?

In my opinion, I want predictability in the pricing. If the company makes any mistakes then I would want them to rectify them, and I can't have it both ways. So I don't see an issue with this.

I havent' used City Index. I use CMC, IG and Fins, and luckily have never been in your position. If you experience this with any frequency, I suggest you change your company.

Cheers,
UTB

 

[thebesttrader]

Hello Jason,

The quote was obviosly wrong - it would have been a huge dividend, wouldn't it?

In my opinion, I want predictability in the pricing. If the company makes any mistakes then I would want them to rectify them, and I can't have it both ways. So I don't see an issue with this.

I havent' used City Index. I use CMC, IG and Fins, and luckily have never been in your position. If you experience this with any frequency, I suggest you change your company.

Cheers,
UTB

The quote wasn't obvsiouly wrong tho.

Last year, there was a special dividend made by Whitbread of around 135p. see whitbreads website. Cityindex aren't saying there was a mistake in the quote, but that they expected Whitbread to make the dividend this year (sometime in May) but realised it wouldn't be made so changed the quote and any open bets accordingly.

The guy from cityindex said on the phone. Well if whitbread do make the dividend you'll receive it!!!!

 

[the blades]

The quote wasn't obvsiouly wrong tho.

Last year, there was a special dividend made by Whitbread of around 135p. see whitbreads website. Cityindex aren't saying there was a mistake in the quote, but that they expected Whitbread to make the dividend this year (sometime in May) but realised it wouldn't be made so changed the quote and any open bets accordingly.

The guy from cityindex said on the phone. Well if whitbread do make the dividend you'll receive it!!!!

Eyup TBT,

I take your point - but some of their clients would be short as well. Surely the best way all round is for the company to rectify the quotes, all round. As long as any actual dividend paid is reflected at the time, I wouldn't care.

Cheers,
UTB