CMC - are they for real?

[JTrader]

You phone sales to ask the spread on an instrument.

They ask you if you're a client. If so, can i have your name & account number.
I refuse to give them this info as i don't see it as relevant because my question is purely sales related, so lets pretend i am not an existing client, but just a new potential customer enquiring about a product.
After being transfered to 2 other desks, with all 3 desks asking me the same questions, the last person says just as i have a right to not give them such info, they have a right to ask for & demand that info, and because i've already said i have an account, he isn't willing to tell me the spread - A PURELY SALES RELATED ISSUE, which i had phoned sales to find the answer to.
Next thing, the guy hangs up.

How they can expect to keep one single customer, i don't know .

 

[Atilla]

You phone sales to ask the spread on an instrument.

They ask you if you're a client. If so, can i have your name & account number.
I refuse to give them this info as i don't see it as relevant because my question is purely sales related, so lets pretend i am not an existing client, but just a new potential customer enquiring about a product.
After being transfered to 2 other desks, with all 3 desks asking me the same questions, the last person says just as i have a right to not give them such info, they have a right to ask for & demand that info, and because i've already said i have an account, he isn't willing to tell me the spread - A PURELY SALES RELATED ISSUE, which i had phoned sales to find the answer to.
Next thing, the guy hangs up.

How they can expect to keep one single customer, i don't know .

Did you say please? :cheesy:


Jtrader which instrument were you after?

Also, if you are a customer you can probably see it on your console if you open up the ticket?

But I do take your point if you are not a customer and was just enquiring.

When I use the chat facility to ask questions they are always very prompt, very sharp and very quick to leave.

I'm suspicious about them because my stops keep getting blown. I always wonder about real prices and CMCs prices but obviously hold my self accountable. Mistrust does creep in sometimes.

 

[KidPlunger]

Thats very strange! I phone them regularly to find out spreads and place trades, a very simple procedure...

Your phone the dealing desk... give them your details... and thats it, job done. If you get through to a receptionist say.. can you put me through to the dealers.. and they do it.

Then agen when I phone them I dont refuse to tell them my details and if I have an account. That might have been the problem.

The mind of a receptionist -

If you say you don't have an account (or refuse to tell them) then it is a sales issue as non clients can't speak to dealers or the help desk.

If you are a client and want to know a spread or to place a trade they put you to a dealer...

 

[Priceman]

Yep I have had the misfortune of being treated like a right shmuck by their dealers on live chat... I did save the content too of that chat conversation for future reference, if anyone is interested PM me and I'll try and dig it out. Worth a laugh it is!

I don't rate their customer support at all but do like the platform even though it's resource heavy on the PC. Makes you wonder doesn't it how safe your hard earned is with these lot...

 

[JTrader]

I don't rate their customer support at all but do like the platform even though it's resource heavy on the PC.

Thats a good point, the platform is very heavy/slow to load etc. compared to the more agile web-page based platforms. Just logging in can be an ordeal .

 

[top trader]

Thats a good point, the platform is very heavy/slow to load etc. compared to the more agile web-page based platforms. Just logging in can be an ordeal .

and don't forget a hidden charge, higher than others overnight finance charges.

 

[JTrader]

You phone sales to ask the spread on an instrument.

They ask you if you're a client. If so, can i have your name & account number.
I refuse to give them this info as i don't see it as relevant because my question is purely sales related, so lets pretend i am not an existing client, but just a new potential customer enquiring about a product.
After being transfered to 2 other desks, with all 3 desks asking me the same questions, the last person says just as i have a right to not give them such info, they have a right to ask for & demand that info, and because i've already said i have an account, he isn't willing to tell me the spread - A PURELY SALES RELATED ISSUE, which i had phoned sales to find the answer to.
Next thing, the guy hangs up.

How they can expect to keep one single customer, i don't know .

Maybe CMC have a discretionary policy of offering variable spread rates to clients depending upon their account status - hence their suspiscion & suspiscious questions :idea:

 

[TheGoose]

Hi guys,
I work for Spreadex.

I'm not going to get into a war of words with the other firms but i think that is shocking service. You wouldn't get that kind of treatment from me!!

You really shouldn't have to give your account number just to get a quote

i had a similar situation yesterday with a currency firm. I wanted to transfer some dollars to my US bank account and called this firm to see what rate i could get. They said they wouldn't give me a quote until i opened an account with them. They were quite rude about it and despite my polite protests, they refused to budge as it was their 'policy'

In my eyes that's stupidity and they just lost a potential client.

Ian

 

[JTrader]

Also, CMC won't tell you from which price sources they base their own spot forex quotes on. This presumably, basically means they have a free reign to publish whatever quotes they want whenever they want, and do stop-running whenever they want.

All other spot forex providers who i have spoken to, have told me the names of the banks/platformsfrom which they base their own prices.

 

[KTF]

Also, CMC won't tell you from which price sources they base their own spot forex quotes on. This presumably, basically means they have a free reign to publish whatever quotes they want whenever they want, and do stop-running whenever they want.

All other spot forex providers who i have spoken to, have told me the names of the banks/platformsfrom which they base their own prices.

You're right about their forex quotes. I trade news bets using CMC and capital Spreads and will have quotes on screen from both companies. CMC's quotes will go around 10 pips higher/lower than Capital Spreads so you will often get whipsawed with CMC but not Capital Spreads. Also CMC's slippage is nasty. Currently trying out FXCM which seems to be working well.

 

[KTF]

By 'news bets' I'm guessing you mean stop entry straddle orders over NFP etc?

Being the news bet tart I am, pretty much a straddle over anything I can get my legs around!It wasn't paranoia with getting stopped out by CMC, they were taking the p1s. It's working much better with Cap spreads the only problem being the lack of pairs they offer and need CMC for CAD $ and KIwi.

 

[KTF]

After 6 years of trading this way I understand slippage will occur in a fast moving market. As in any business it's important to get the best price and this is happing with capital spreads - CMC seemed to be a shift Essex car salesman...

After getting a certain insight as a market maker do you not straddle yourself?

 

[KTF]

NFP is vicious and I'll only trade a 1/4 position. After trying to teach a few folks this strategy I've realised there is a huge amount of skill needed for such bets but there is certainly no art in them. It's a bit like a respected singer releasing a catchy song the masses will buy to fund their not so profitable but artful tunes.

 

[the blades]

You phone sales to ask the spread on an instrument.

They ask you if you're a client. If so, can i have your name & account number.
I refuse to give them this info as i don't see it as relevant because my question is purely sales related, so lets pretend i am not an existing client, but just a new potential customer enquiring about a product.
After being transfered to 2 other desks, with all 3 desks asking me the same questions, the last person says just as i have a right to not give them such info, they have a right to ask for & demand that info, and because i've already said i have an account, he isn't willing to tell me the spread - A PURELY SALES RELATED ISSUE, which i had phoned sales to find the answer to.
Next thing, the guy hangs up.

How they can expect to keep one single customer, i don't know .

Eyup Jtrader,

Just to balance your point, I trade UK stocks with CMC and am always quoted the rolling and quarterly price, before I ask to deal and give them account details.

To someone else's point above, their rolling charges are higher than others, but the finance charge factored into the quarterlies are the lowest (cc IG, Fins).

I've got to add that I feel like the dealer can't wait to get me off the phone, unlike with the other companies. But given that their lower spreads are probably paid for with a lower cost base (fewer staff?), I wouldn't have it the other way around.

Cheers,
UTB

 

[Trader333]

CMC won't tell you from which price sources they base their own spot forex quotes on

It will be their own source to suit there own needs.


Paul

 

[stevespray]

Being the news bet tart I am, pretty much a straddle over anything I can get my legs around!It wasn't paranoia with getting stopped out by CMC, they were taking the p1s. It's working much better with Cap spreads the only problem being the lack of pairs they offer and need CMC for CAD $ and KIwi.

KTF - I think what you find is this. Lots of people, as they gain a little knowledge, start to come up with ways to beat the market, or in this case your counterparty which is the spreadbetting or cfd provider. The old 'lets set up some stops and limits around a semi predicatable period of volatility' is basically a re-invention of the wheel when it comes to that kind of data trading with these retail / over the counter products. At first (and on 'demo' trading platforms) you will of course get fills at your levels mainly because of lack of man power - no one has the time to monitor trial accounts or £1 per point traders around 1.30pm on a Non Farm Payroll day so they will often just get filled.
What tends to happen therefore is that people enjoy a few 'free lunches' and then jack the position sizes on the stop & limit orders to a level which starts to show up on the firms radar. Again you may be lucky and get a fill without any / much slippage. The problem is that you have an account history. After a while the firm get wise to the fact that you are using a particular type of strategy. A successful straddle strategy (from a clients perspective) will almost always be to the firms cost since the whole series of stops / limits etc get hit in a very short time frame. Due to the short time frame the company can not offset any of the risk - the money comes straight from their pockets.

It is also true that these over the counter providers make a form of 'intermediate market' which operates between the 'real market' and the grass roots clients like ourselves. The firm may therefore reasonably contend that the trades that you are placing with regard to stops and limits etc may not actually be replicated in the 'real market'. For example, do most folk realise that there is no such thing as a 'stop order' in an actual market context? People get used to using these over the counter providers and learn (wrongly) that stops and limits work identically (but obviously in reverse) and this is not the case. YOU CAN NOT PLACE A STOP ORDER IN A REAL MARKET! The only orders which can be placed in a real market are 'Limit Orders' - these effectively make the market as the limit orders make up the two sides of the order book (what some people refur to as 'Level 2' or 'L2 Order Book'). So, a limit order is one of two things, it is either an order below the market 'to buy' if the price drops to a specified level or it is an order placed above the market 'to sell' if the prices rises to a specified level..... I say again.... these are the only two orders which can be 'set' in the market. Of course you can use a 'market order' to open or close positions but this is simply an order to transact at the current market level ie hit the limit order which is the best offer (ask) if you are a buyer or hit the limit order which is the best bid if you are a seller. As you can see there is no facility for a 'stop order' and this is why there is so much contention over stops and slippage. So what is a 'stop order' really then??? In the 'real world', away from the over the counter spreadbet and cfd providers, stop orders are either held by your brokerage or by your trading software (or a mixture of both). In the real mechanics a stop order is executed by means of a 'market order'. It isnt that complicated - all that happens is that, the moment that your stop gets triggered (ie your stop level is hit), your broker (or your software) creates an instant market order to close your position - being as this is a market order the price that you get can not be set in advance since the price that you get is determinded by the bids & offers on the order book at the time the market order hits the market - this is why stop orders slip and limit orders dont which makes life a total bitch (in the real world).

Therefore, in essence, by placing stop orders with over the counter providers you are expecting a level of non slippage which can not be replicated in the underlying market. People often think that the market moves a long way after a data release due to the high volumes of trade which occurs but, in my experience, for a different reason. If you were to look into the market orderbook before the data was released then you would see that the orderbook was much thinner that it is normally. A thin orderbook means low levels of bids and offers at the various levels. This means that it doesnt take much of a disparity in the buying and selling to make the market move one way or the other. Movement in the market itself inturn causes more trade to occur since a sharp move causes other buyers and sellers to react who wouldnt react if the price hadnt of moved (does that make sense??). So what I'm saying is that thin orderbooks followed by brisk volumes of trade is going to cause the market to move and indeed gap quite violently. Of course, people with stop orders with their brokers, are prone to huge slippage because the are effectively using market orders trigger by price movements - this is why, when you analyse the price bars around data, you find such extremes of trade.

In simple terms, if your spreadbetting / cfd provider slips you big time then he is probably telling you that your free lunch pass has run out!

Hope this helps,
Steve.

 

[KTF]

Steve, Thanks a lot for your response. My initial gripe wasn't the slippage, as this is expected on volatile announcements as NFP because of the thin orderbooks like you said, it was when comparing CMC to Capital Spreads. The same chart will spike 10 points higher and then 10 points lower on CMC straddles compared to Capital Spreads. This goes to show our bookies aren't playing fair...

The way they make it difficult is to delay the fills online. The way around this is to place the order online and when its hit quickly call to close if it goes against you. This can quite easily be done on most announcements but not the likes of NFP.

Bets like this are exactly that, a bet! I enjoy a gamble and will carry on looking for a better system. I'm trying out FXCM which is an automated service which is currently much quicker as it takes out the human element, but your point is valid about trial systems or piddly pound bets so I'll let you know when the stakes are much higher.

Cheers

Kev

 

[lurkerlurker]

MarketMaker not so bad, peppering stops around news releases maybe bad

Thats a good point, the platform is very heavy/slow to load etc. compared to the more agile web-page based platforms. Just logging in can be an ordeal .

I do agree that logging in can foster some impatience!

1. Start MarketMaker
2. Wait.
3. Wait while it checks for updates and stuff (optional: wait 5 minutes for it to download and install updates when you want to trade)
4. Enter your details.
5. Wait while it logs on.
6. Wait for your layout / instrument to load.
7. Trade.

(by contrast, E*Trade, IG, and TradIndex have - click your bookmark, enter your password, trade)

Disclaimer: The following may not apply to most folk here, since I am using Linux, Firefox, and the Sun JVM. Your mileage may vary.

JTrader, not to be difficult, but that is not my experience of web based platforms. The only agile platform there is is TradIndex (and the agility comes at the cost of most everything you would expect from dealing software). My pet peeve is resource hungry embedded java apps which either leak memory or find a way to peg a recent CPU at 100% and hang the browser / JVM process when you open more than a few charts.

MarketMaker, on the other hand, seems to be a great piece of software when it comes to system resources. As I use Linux, I run MarketMaker (the most recent version, 5-something) in a VMWare emulator* on a virtual Windows 2000 which is allowed access to a mere 256MB of my laptop RAM and 512MB of my desktop. On the laptop, it runs by itself, and on the desktop when I use MarketMaker it has to compete with the resource hungry NinjaTrader platform (it is great by the way - give it a try!). The Win2K image I use is a stock SP4 with updates and no other software except MM and NT. I've never had a single problem.

On the other hand, I fire up the web platform of E*Trade or IG with charts with a recent firefox with standard compile time options and flags, and it is slow, eats memory like it is going out of fashion, and on the slower laptop especially pegs the CPU. These are both recent machines, and I am generally running nothing but fluxbox (a very light window manager - doesn't use more than about 60MB of my 512MB with the system fully booted) on the laptop, and KDE with a few programs on the desktop.

*Again, some of this is Linux specific, but an emulator is always slower than a native OS. Therefore, I would expect the performance of Win2K under VMWare under KDE under Linux to be a lot worse than native Win2K, except I find MM more responsive with orders and charting than any java based web platform. I've even tried Internet Explorer under the VM and it is equally resource hungry.

Just my two cents, but even though it isn't Linux compatible (and it should be because it is java based), we need to applaud CMC for their MarketMaker software. In my experience the actual resource footprint it trivial compared to having to run a whole browser, an inefficient java plugin, and then some really bloated java apps. It does have its shortcomings, which are too many to go into here, but suffice to say I took part in a recent CMC SB client survey regarding their platform, and I would hope to see more order types such as If Done etc in the near future.

I have to say I was spoiled by MarketMaker after coming to them from TradIndex though. I use quite a few platforms now, including the standard interfaces for TradIndex, E*Trade, CMC MM, IG (just to check prices mostly), NinjaTrader (great for simulated trading), and a nice simulation forex package from Oanda (check that out for paper trading the forex).

Regarding their customer service, I can't really comment. I've never had any problems. All SB firms quote their products and spreads on the web. If you have an account, it is perhaps better to give your details when talking to staff who deal with clients. A sales enquiry is something different I suppose, but still.

Regarding the news trading, I view that as perfectly legitimate - you could backtest this and probably see that the major news for example nonfarms generally provokes a trend in the direction of the news. Fine if you are prepared to get in at a sub-optimal price and hope the move continues. If you want the pre-news price, forget it. I can see why bookies may want to "slip" anyone who does this. Try DMA and see if you can trade at the pre news price. As for straddling stop orders? With a SB, isn't that just an invitation to get stopped in long (short) at the top (bottom) of the news spike, and then get the other side taken out as the market retraces? I'm not a fan of stop in entries, especially for intra day traders. I can understand those who can't watch the screens, but if you can when you anticipate a S/R break or similar, why don't you enter on a limit order at the current market price after the break, where you would have put your stop. Use a limit, and you may not get filled, but you shouldn't get slippage against you. Either that, or hit a market order on a pullback.

As another poster pointed out, there is thin volume on news. Smaller orders can move the market further. If the volume is absorbed and you buy or sell at the market you may get a bad fill.

Interestingly, I use price and volume on the YM during news, and if a breakout on volume on a low timeframe and the T&S supports a continuation, I will bet £1pp long or short accordingly, and wait to see if a trend develops in my favour. Otherwise, I usually have a tight stop set at the pre news price, so I am stopped if it moves against me. Usually, after the spike and when volume picks up, if the market reverses it is on high enough volume that my stop tends to get filled by the SB companies without too much slippage. Which firm I use is generally dependant on the spread for the instrument (and sometimes margin requirements), however some firms make it difficult or impossible to place a stop at the same time you place a market or limit order, and others stipulate an unfavourable distance from the market (I'm looking at you TradIndex, with your 30 point minimum stop on the Dow - then again, that is calculated into the margin - I just wish they would leave the margin requirement where it is and increase the NTR rather than enforcing 30 point Dow stops - I usually want around 10 on news, and a max of 20 on normal day trades).

Oh dear, I seem to be going a little offtopic here. I look forward to DMA on a decent platform with the little "buy market, buy bid, buy offer, sell market, sell bid, sell offer" buttons. Oh, and the "go flat" and "move stops to BE" buttons! The first time I tried paper trading the YM with those order facilities, and the ability to use the mouse on a chart to set buy and sell limits / stops, it wouldn't have surprised me to find a "make me money" button - contrast this with the paper trading facility at TradIndex! I've seen the NT platform, and the platforms for TwoWayFutures (and heard good things about IB's own platform). I can hardly wait, although to be fair out of all the SB firms I've tried so far (IG, TradIndex, CMC, and E*Trade) I find E*Trade to have the nicest platform (now if only the charting didn't peg my CPU and crash my browser....) It can't hold a candle to NT though.

 

[stevespray]

Lurker... I just tried out GFT Spreadbetting. In my opinion they now have the best spreadbetting platform. I run it on a fairly old pc (circa 6 years old) and it runs perfectly.

You can download a full working demo.

www.gftuk.com

I'm not connected with these guys but am fairly impressed with them.

Steve.

 

[JTrader]

Lurker... I just tried out GFT Spreadbetting. In my opinion they now have the best spreadbetting platform. I run it on a fairly old pc (circa 6 years old) and it runs perfectly.

You can download a full working demo.

www.gftuk.com

I'm not connected with these guys but am fairly impressed with them.

Steve.

Yes the GFT SB service looks pretty similar to CMC's in many ways (opening hours, spreads, etc.), don't know about the platform.

CMC have "confidientiality agreements" with the banks from whom they derive their price. One is a big German bank, one is a big Swiss bank, etc. so one might be able to guess....hahmm (UBS:idea, but if they don't come out & tell you, it ain't transparent and you're reliant upon them fully to be honest etc.
They do point out that they say they should always be at or within 5 pips of the real market in GBPUSD & EURUSD, whether this is the case or not ....