Complaints, Warnings and Problems

[twinj]

I thought it would be nice to start a thread on anything you find unhappy about spread betting (and CFD) companies.

I hope this will become useful to anyone who intends to use these companies. After 10 years using them, I have encountered numerous problems but I will only discuss one which has partly contributed to my reason for unwinding my operation.

The trouble with Spreadco (Spread Co) arose in December and finally concluded at the end of March. The Financial Ombudsman has sided with Spreadco so I am unsatisfied with the outcome.

So in December, I traded with the DJIA (Wall Street 30, ws30). Their platform behaved in an illogical manner. This was not clear to me at first but as the number of trades reached about 8, I realised that the order of the trades were not in chronological order. This contributed to unintentional trades and I foolishly carried on trading with them thinking I could weather the storm. I have never come across a spread betting company that orders executed trades in a haphazard way. They have since corrected this illogical behaviour.

I first contacted them but they would not take my case seriously. So I complained to the CEO and he told me to contact Compliance. Compliance dismissed my claim that the irregularity in the platform partially contributed to my loss. If I had known of this irregularity, I would never have traded so much.

The Financial Ombudsman dismissed my claim as well. They do not have the capability to see from a day trader's perspective. They told me I could have gone to the Trade History tab and monitored the trades (very cumbersome) and noted down the Trade Reference numbers of all the trades ( a long string of letters and numbers) and if I wanted to close a certain trade, I could go back to the Positions tab, find the certain trade using the Trade Reference and close it. Who would do this? The fact that Spreadco fixed this problem later on surely means that they realised there was a problem. Not in the eyes of the Ombudsman.

After all these trouble, I think I will still keep some funds in the account to take advantage of the 2 percent interest on deposits. I won't trade large amounts with them any more. I do hope this thread becomes useful to all traders out there. I would feel happy that my loss was not all in vain. Good luck everyone.

 

[tomorton]

I've checked my SB provider's rules -
5.12 Where a series of Orders may be filled to close existing open Transactions and/or open new Transactions then these Orders will be filled by us in any sequence determined by us.

Reading the T&C between the lines it seems the sequence will be driven by the level of funds in the account plus the level of risk they are taking on plus the liquidity at the particular time.

I don't understand the reference to irregularity in the platform - maybe someone was just trying to massage the truth as a tech glitch rater than a firm T&C take it or leave it issue.

 

[twinj]

Thanks for your post, tomorton. I don't think there was any suspicious behaviour apart from the fact that their platform was illogical. I checked on their demo platform and I could recreate the problem.

Not sure on your terms and conditions but with Spreadco, you execute a trade and it shows in the Positions window. You open another, it shows above or below the previous trade. You carry on opening more and it turns out that the most recent executed trade can appear not at the top or the bottom but somewhere in between.

 

[tomorton]

The LCG platform is totally logical - shows trades by default in chronological order, youngest at top. You can re-sort to reverse the order but it can't be random. You can also re-sort ascending/descending by when created, market name, direction, size, entry price, TP price, SL price and unrealised profit/loss. Each trade does have a reference number but the open positions are not sortable by this.

 

[highbury fx]

I thought it would be nice to start a thread on anything you find unhappy about spread betting (and CFD) companies.

I hope this will become useful to anyone who intends to use these companies. After 10 years using them, I have encountered numerous problems but I will only discuss one which has partly contributed to my reason for unwinding my operation.

The trouble with Spreadco (Spread Co) arose in December and finally concluded at the end of March. The Financial Ombudsman has sided with Spreadco so I am unsatisfied with the outcome.

So in December, I traded with the DJIA (Wall Street 30, ws30). Their platform behaved in an illogical manner. This was not clear to me at first but as the number of trades reached about 8, I realised that the order of the trades were not in chronological order. This contributed to unintentional trades and I foolishly carried on trading with them thinking I could weather the storm. I have never come across a spread betting company that orders executed trades in a haphazard way. They have since corrected this illogical behaviour.

I first contacted them but they would not take my case seriously. So I complained to the CEO and he told me to contact Compliance. Compliance dismissed my claim that the irregularity in the platform partially contributed to my loss. If I had known of this irregularity, I would never have traded so much.

The Financial Ombudsman dismissed my claim as well. They do not have the capability to see from a day trader's perspective. They told me I could have gone to the Trade History tab and monitored the trades (very cumbersome) and noted down the Trade Reference numbers of all the trades ( a long string of letters and numbers) and if I wanted to close a certain trade, I could go back to the Positions tab, find the certain trade using the Trade Reference and close it. Who would do this? The fact that Spreadco fixed this problem later on surely means that they realised there was a problem. Not in the eyes of the Ombudsman.

After all these trouble, I think I will still keep some funds in the account to take advantage of the 2 percent interest on deposits. I won't trade large amounts with them any more. I do hope this thread becomes useful to all traders out there. I would feel happy that my loss was not all in vain. Good luck everyone.

So you were upset with them to the degree that you escalated it all the way to the FOS but clearly not so upset with them that you still want to keep your account open !!

 

[twinj]

Hi tomorton,

That is exactly what I am used to. A nice chronological order.

 

[twinj]

Hi highbury fx,

Thanks for the post. I was upset with them naturally but also upset with the Financial Ombudsman because they clearly have no idea what went on.

The reason for keeping the account open is because of the low saving rates of the banks. Spreadco offer 2 percent on deposits if you make 10 open and close trades per month. If I just keep my positions small and only a few trades, it won't affect me. If the interest rate of the banks go up above this, I will most likely move all my funds out.

 

[tomorton]

Hi tomorton,

That is exactly what I am used to. A nice chronological order.

Well, yes......., but its the SB firm who decide the chronology.

 

[highbury fx]

Hi highbury fx,

Thanks for the post. I was upset with them naturally but also upset with the Financial Ombudsman because they clearly have no idea what went on.

The reason for keeping the account open is because of the low saving rates of the banks. Spreadco offer 2 percent on deposits if you make 10 open and close trades per month. If I just keep my positions small and only a few trades, it won't affect me. If the interest rate of the banks go up above this, I will most likely move all my funds out.

Hi Twin

I think you'd have more to lose in terms of misplaced trust and added anxiety by remaining with a broker that has demonstrated to you that they are not prepared to compromise all because you're getting 2% interest per annum on your funds.

Whats important to you when you choose your broker? It sounds like so long as you get 1/12th of 2% per month on your deposit that's the game changer. Never mind client services or reputation or trading conditions or products offered, you have decided that you can put up with poor behaviour and an unwillingness to resolve problems because you're getting your bit of interest. That to me really doesn't make sense.

What do you think will happen next time you're in dispute with them? They'll see you've tried the FOS route once before and was unsuccessful and will be reluctant to do that again. They've got you where they want you, a client that they took on at arbitration and won and who has remained a client. Your path ahead with them is a rocky one I would guess.

They don't get 2% on their funds on deposit so what's the benefit of them giving it to you? how will they make that loss leader back? This isn't much difference to Cantor Index and WorldSpreads desperate attempts at spread free prices to try and win business from firms with more successful models. There is no free lunch, firms like this are out to capture your loss. Simple. Being in dispute and losing at the FOS to a firm that is all out to capture your loss and remaining with them is frankly nuts when you consider the choice you have.

Good luck, I wish you well.

HF

 

[twinj]

Hi HF,

I appreciate your concern. I have tried to day trade as a living but aside from a successful strategy, it will never be enough at the moment. I am embarking on a different career which will give me more satisfaction in being able to give something back to society.

I will have much tighter stop losses for the 5 trades per month so that I will be able to risk the interest amount.

I completely agree with you about trust and reliability which are far more important. If I was intending on day trading, I would never dream of using them.

Best of luck.