So what is the spread then? It is definitively not a real market spread.
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Answer my question please, why is it the case trading DMA provide just as many losers?
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Trading SB is for "small boys" so I have have heard. Prospreads is just that, SB. But with that entry level and price I would go for the real futures.
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SB have it's advantages so does DMA, both have got their place and followers. If you can't make it trading SB you want make it with DMA. If you feel like that after trading SB I understand if you don't like trading SB. I however do not feel that way, but what do I know after 15 years of trading, as I am not part of the "big boys" league.
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Your right, at the end of the day it's down to the individuals preference, mine being through a DMA provider as I prefer to have transparency and know that I'm not being bent over with losses going into my providers back pocket!
http://www.iggroup.com/content/files/interim_res_jan12.pdf
Have a look at the betting duty they paid (HMRC states SB firms must pay 3% net on all client losses)...think that confirms my point of market makers profiting from client losses (if my figures are correct, over £102mill in client losses- now I don't know how much of this they have actually taken themselves, but anyone with any sense knows a large chunk of that has gone straight into IGs pocket)
Just as you asked me to do so, please back up this statement with some proof?
Yes I understand, but what about the winners? Usually there is someone at the other side of the trade. Sometimes there is an unbalance in the book, for which the SB hedges a certain percentage. The spread is not a loss in trading, but a price you pay to be able to trade with a SB. Most of the profit made by a SB is not trading against you, but from the spread itself. Also a quite considerable amount of the profit is made from the interest accumulated on funds from clients account.
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Hi Gle
I do not know where you are currently getting your figures from but if you look at our clients over the past year over 75% were profitable. I can’t give you exact figures for each SB company but the industry standard is around 80% of clients lose.
Each to their own, never tried claiming they weren't SB...you still (somehow) seem to be missing the point! YOU CAN STILL SB WITH DMA! IT IS THE EXACT SAME THING AS SB EXCEPT YOU HAVE TRANSPARENCY AND YOUR LOSSES IS NOT TAKEN BY THE PROVIDER! Get it yet???? Therefore, even though you may get better pricing with real futures, you still have to pay GCT....it's really not that hard to grasp a concept surely?
You pay a spread wrap around a real market spread so it is SB. It is categorized as SB and it is tax free (at least in the UK). I understand the concept but it is very expensive compared to trading the real futures. In fact some of the total cost is more than trading the "small boys" SB.
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Wow........yes with your traditional SB firm, just as with DMA, there is someone else who takes the other side of the trade! Difference being market making SB firms ALWAYS take the other side of the trade, not another trader/SBer! As for winners, check out FP Markets post (80% SBers lose)...which once again points to the fact that traditional SB firms profit from their client losses, so even though they have to pay out if a client wins, in the grand scheme of things that cost is insignificant compared to the cash made from losses! I'm not debating the fact of whether or not they make money from the spread, of course they do, just as a DMA provider makes money from the comms they charge!
For someone who has been apparently been trading 15 years, I'm genuinely surprised at your lack of knowledge and common sense! SB/ DMA SB is pretty easy to grasp, if your still struggling to 'get it' go google it...or of course draw on your 15 years experience (still trying to understand how with your 15 years experience you still think MARKET MAKERS don't create their own synthetic market
)....
Poem 101
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Actually, FP charges a commission, not a wider spread. I looked at them, the product seemed very good but the commissions were waaaaay too high. If they can get those down, they could potentially be a very good choice for serious futures traders.
You don't seem to understand that the SB only need to hedge what is unbalanced in the book. They don't need to hedge if there are traders on both sides. They earn the spread you see. It is not the real market, but it reflects the movement of the underlaying asset, they are market makers, meaning they don't create a price out of the blue, at least you agree on this simple fact. Otherwise it would be impossible to trade with SB.Wow........yes with your traditional SB firm, just as with DMA, there is someone else who takes the other side of the trade! Difference being market making SB firms ALWAYS take the other side of the trade, not another trader/SBer! As for winners, check out FP Markets post (80% SBers lose)...which once again points to the fact that traditional SB firms profit from their client losses, so even though they have to pay out if a client wins, in the grand scheme of things that cost is insignificant compared to the cash made from losses! I'm not debating the fact of whether or not they make money from the spread, of course they do, just as a DMA provider makes money from the comms they charge!
For someone who has been apparently been trading 15 years, I'm genuinely surprised at your lack of knowledge and common sense! SB/ DMA SB is pretty easy to grasp, if your still struggling to 'get it' go google it...or of course draw on your 15 years experience (still trying to understand how with your 15 years experience you still think MARKET MAKERS don't create their own synthetic market
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Hi Poem
Thanks for the kind words. Our equities and FX pricing is second to none, we are currently working on getting our index/futures trading costs down in line with our competitors for large traders.
Poem 101
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I think it would be worth your while because I believe there's definitely a gap in the market there that you could fill. I don't expect it to necessarily be the same cost ad a regular futures broker, because after all you are providing an extra service. But if you can get it in the same ballpark I think you could get a lot of business.
I was actually referring to Prospreads. Yes I understand FP hedges every single trade in the real market. How they can get away being categorized as SB in the UK I don't know, especially as they charge commission on trades instead of a spread. Probably due to the fact they are hedging every position.
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If you look at HMRC Public Notice 451, commission and interest can be charged for placing a bet
Why your prices is higher compared to trading the "real" futures is due to the fact you need to hedge all trades? Meaning no real DMA?
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:clap::clap::clap: once again your making so much sense and asking stupid questions :clap::clap::clap:
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Having read through this thread you have a serious lack of knowledge as to how providers work. I do not want to get draw into a long argument about this. I suggesat you should call the office if you need further clarification.