Deal4free / CMC

stevespray

Experienced member
1,289 154
jtrader - You are correct, if you moved to direct access and tried the same scalping techniques you would most likely lose overall. Dont forget you also have stamp duty also, it all adds up. The only way forwad is to try you scalping techniques on US stocks. This is where a good direct access broker will excel. You can often get into a position with zero spread, the markets are liquid and commissions are extremely low and hence your 'running costs' are so much smaller than they are if you try to trade LSE. Maybe CMC realise this and that is why they do what they do.

Steve.
 

TheBramble

Legendary member
8,394 1,170
JT - what does your risk:reward look like if you're only aiming to make 2-3 points (net) per trade using an SB?

Or is risk:reward an inappropriate concept for scalping?

My own bias (if I were a scalper) would be to move to DA ASAP.
 

scpope

Junior member
33 0
TheBramble

My own opinion on this is that sb is not suitable for day trading, particularly if your looking for a 2-3point scalp. To avoid being whipsawwed by sb companies swinging their quote around the live market price, your stop has to be greater than their spread, realistically twice the spread. So a firm using a 5 point spread requires at least a 10 point stop-loss against a 3 point scalp! Your win/loss ratio has to greater than 3:1 to make a profit!

This is my opinion and I know others on this board day trade sb successfully, maybe they'll enlighten us as to how its one over the longer term.

Stephen
 

al-motor

Active member
249 0
SCpope-

certainly agree with u that day trading most mkts using SB and u are asking for trouble.......... the only mkt which are the exception is the forex........... since the spread is similar to most brokers



aL
 

scpope

Junior member
33 0
al.

The only comment on forex, which I have to admit I have day traded using Finspreads, is that you need a volatile market. If you run TSimLite to give live IB prices (assumming you don't have an IB account) and also display the sb prices, you find they swing wildly around the IB price and therefore you can't run tight stops which are possible on IB or I presume other Forex brokers.

Stephen
 

donaldduke

Experienced member
1,665 257
Got this email earlier today, shame i dont trader UK100, however
with spreads this tight i might give it ago..

UK100 NOW ONLY 2 POINTS

You can now trade the UK100 with just a 2 point spread, continuing our
commitment to offering the most competitive Spread Betting service in
the market
 

bracke

Experienced member
1,286 12
donaldduke

Silly me,my apologies. However in my defence it is not unknown for posts about other companies/topics to make their way into threads about similar topics.

Regards

bracke
 

JTrader

Guest
5,741 506
It is a shame that CMC and most sb companies seemingly cannot be relied upon to treat their clients fairly, equally and honestly all of the time in terms of not re-quoting and offering instant fills. If they ran a totally reliable operation (i.e. acting as an impartial broker - trying to make profit from the spreads only, afterall, all positions are hedged, and not take money from clients or deny clients profits by changing prices and slowing down fills) they would be the choice of most.
Maybe as the market for customers develops in the coming years and becomes more competitive, more companies will offer the same terms as CMC but without the downside. Just look at how the industry has developed and advanced over the last few years.
At the end of the day we are all in the business to make money - broker and client, if I make money I continue to trade and my broker makes money, and, continues to make money. It is surely in the best interests of all spreadbet companies to retain profitable customers by offering the best prices and the quickest fills, otherwise the client will go elsewhere.

If a trader has a mortgage to pay and perhaps children to feed they have enough to worry about in terms of trading profitably. They do not need and perhaps cannot continue to trade for a living with the added worry of "will I be able to trade properly tommorrow, and not have my orders delayed, passed on to a dealer and the prices re-quoted."

A level playing field is all that is required.
 
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TheBramble

Legendary member
8,394 1,170
But JT - we (punters & SBs) are not both in the market to make money (together). SBs are not brokers - they do not 'profit when you profit' (despite their blurb). They rarely hedge your position with them - they will often than take a contrary position if they feel you are on the wrong side of the market. Nothing wrong with that.

But don't make the mistake of thinking it is or should be a level playing field with SBs.

They are bookies. If it was a level playing field they couldn't exist.

Use SBs for what they should be used for.
 

JTrader

Guest
5,741 506
If all clients trades were automatically hedged and the sb company made their money through the spread sb companies would profit when the client traded (regardless of whether the clients trade made the client a profit).
 

scpope

Junior member
33 0
JT,

I don't think anyone is disagreeing with your proposition, it's just not the way SB comapanies operate and therefore they should only be used in the correct way, ie holding positions for medium/long term, not day trading. It's unfortunate that a lot of people seem drawn into trading via SB's (easy to set-up, no tax to worry about) and lose money due to making basic trading mistakes.

Stephen
 

raf110

Member
63 1
SB companies cannot hedge all trades as this does not yield enough profits. Firstly there is a cost involved in hedging all trades. The SB companies would have to widen there spreads to make any money and this in turn would put punters off.

The name spread BET (also the FSA classifies these firms as a bookmaker), should give something away. They have to hold positions as this is the only way they can make a decent profit.
 
 
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