Criticisms of spreadbetting companies

oliverpenn

Newbie
5 0
Hi, I've read many negative comments about spreadbetting companies on these boards with interest. I am interested to know to what lengths do these SB companies go to make your money theirs? For example is it true that if you have a position that is going against you the SB company will quote you something different than if your position was going your way?
 

TheBramble

Legendary member
8,395 1,169
No.

They quote what they quote. Regardless of any open position you may or may not have with them.
 

adrianallen99

Established member
630 4
If the price(quote) is going against you, it is probably going someone elses way and vice-versa. Of course, the price may be different from the underlying market.
 

stevespray

Experienced member
1,289 154
Oliver - It's unlikely that a spreadbet company would play the game that you are suggesting, most companies agree in their T&C that the quotes they provide you will be the same as quotes provided to other customers. As I have outlined in a couple of the previous threads there are a few more subtle ways they can get at you. Delaying execution of your order to see which way the market moves is probably the most common one. This is an easy way to extract extra spread from you especially if you are trading a market with a very narrow spread. I have had many instances of limits being hit on stocks only for the spreadbet company to claim “the market didn’t trade there with enough volume to close your position” at which point I’ve told them that I have level 2 data and I can see that it has traded with enough volume. This normally leads to a dealer saying “Oh, sorry sir, our mistake, I’ll put the trade through for you now”. In these instances if I hadn’t of being paying for this extra data they would have robbed me on each occasion.
Again, as I have already mentioned in previous posts, most of the spreadbet companies say in their T&C that they “reserve the right to vary their price away from the underlying market on which the market is priced” but a few sentences later say that “we reserve the right to cancel or alter bets that have been opened at incorrect prices” – These terms certainly leave the customer at a disadvantage if push really came to shove.
Another situation that seems to occur on an almost frequent basis is the failure of certain platforms when the markets become volatile. This is the exact opposite of what the customer requires. If you watch volumes going through the markets at these volatile times then you’ll notice that they are very high, that’s because many people are trading yet this is the time the spreadbet companies go ‘phone only’ or their platforms just lock up completely.

Steve.