FP Markets

[FP Markets]

Hi FP Markets,

Thanks for the information so far.

In addition to the TomNext details, could you elaborate on the nature of DMA spread betting. I understand that when you are trading with a market maker that you are trading directly with/against the broker, but, from what I gathered from the website, with FP Markets you trade directly against the market. I have heard the phrase DMA with a spread betting wrapper bandied about in this forum. Is this what FP Markets do, and what does this actually mean in practice? It would probably be helpful for anyone interested if you could provide an example of the trade process from start to finish.

With regard to my question about the amount of information required for downloading the FP Markets DMA Spread Betting Guide. I am simply pointing out that requiring First Name, Surname, Email Address, Phone Number and Postcode, to download (I'm assuming) a PDF guide is overkill. I can understand requiring this information to set up an account (demo/live), but specific product guides are usually freely available on most brokers' websites with the click of a hyperlink. No info required!

Thanks again.

LBP

The trade process is very similar to your traditional spread betting. There are very few differences you will find in executing trades. One of the main differences is that when placing a trade it goes into the underlying order book, so when placing a trade it will get filled in the sequence of the order book. You can also put limit orders, allowing you to choose the price you would like to execute at instead of only seeing a buy or sell button. With this you are able to trade within the spread or you are able to put in market orders which will fill the whole of you order at the best prices available in the market. For example when purchasing equities on the LSE you are able to see all the orders in the market (volumes and amount of different traders in front of you). For an example of this please look at our album of platform shots, depth screen. When the order is being filled it will not load and then come up with a message saying your trade is placed. You will be able to see other traders picking away at your order and you will be able to see all the sized lots going through the market, showing the last 20 trades of that instrument.

You may be right with the amount of info requested and I will look into reducing this.

Kind Regards

 

[lilbitpipsy]

Hi FP Markets,

Thanks for explaining this. With regard to the way FP Markets hedge specific trades, could you explain how this is done? Do you hedge in a same/different market etc.? How does this not create a loss for the broker if a clients trade makes a profit. I would appreciate it if you could give an example in the FX market when a trader places an order to buy 1 standard lot of any currency pair of your choosing.

Thanks.

LBP

 

[FP Markets]

Hi FP Markets,

Thanks for explaining this. With regard to the way FP Markets hedge specific trades, could you explain how this is done? Do you hedge in a same/different market etc.? How does this not create a loss for the broker if a clients trade makes a profit. I would appreciate it if you could give an example in the FX market when a trader places an order to buy 1 standard lot of any currency pair of your choosing.

Thanks.

LBP

We do not hedge specific trades, every trade is hedged. Our platform links directly into the underlying markets. For example if you are buying shares in Vodafone your orders will go through us and we place it onto the LSE order book. This may start to get a little more complicated because we split the order, where parts will go onto other exchanges such as chi-x so trades will always be executed at the best price on the original exchange or at a BETTER price on another exchange. This means you will always get the exchange price or better. We enter an equal trade onto the market for our clients which means that we do not profit or take a loss, no matter where the market moves. The money made or lost will come from a counter party in the real market. The way FP makes money is more in the traditional stock broker method where we charge a commission for the trades our clients place, we do not profit from client losses.

 

[FP Markets]

Hi FP Markets,

Thanks for explaining this. With regard to the way FP Markets hedge specific trades, could you explain how this is done? Do you hedge in a same/different market etc.? How does this not create a loss for the broker if a clients trade makes a profit. I would appreciate it if you could give an example in the FX market when a trader places an order to buy 1 standard lot of any currency pair of your choosing.

Thanks.

LBP

Spread Based pricing

Opening the position
You decide to go long of the British Pound against the US dollar. Our quote is 1.5519-1.5521, and you will buy £10,000 at 1.5521. £1 a point.

The value of your position is £10,000 x 1.5521 = £15,521. To open the position there is a 1% margin requirement based on the full notional value.

Your margin requirement is therefore 1% x £15,521 = £155.21.

Interest adjustments
While the position remains open, your account is debited or credited to the current tom-next rate. Tom-next is a market swap rate that expresses, in pips, the difference between the interest paid to borrow the currency that is being notionally sold overnight, and the interest received from holding the currency that is being notionally bought overnight.

Closing the position
As you predicted, GBP/USD later rises to 1.5721-1.5723, and you decide take your profits and exit the trade at 1.5721.

Profits/Losses
Opening transaction: £10,000 x 1.5521 = £15,521
Closing transaction: £10,000 x 1.5721 = £15,721
Profit on trade: £200

If the price had fallen to 1.5321 and the trade exited at this price then the trader would have lost £200.

 

[FP Markets]

Clean Based pricing ( For larger FX traders)

Opening the position
You decide to go long of the British Pound against the US dollar. Our quote is 1.5519-1.5520, and you will buy £10,000 at 1.5520.

The value of your position is £10,000 x 1.5520 = £15,520. To open the position there is a 1% margin requirement based on the full notional value.

Your margin requirement is therefore 1% x £15,520 = £155.2.

Interest adjustments
While the position remains open, your account is debited or credited to the current tom-next rate. Tom-next is a market swap rate that expresses, in pips, the difference between the interest paid to borrow the currency that is being notionally sold overnight, and the interest received from holding the currency that is being notionally bought overnight.

Closing the position
As you predicted, GBP/USD later rises to 1.5722-1.5723, and you decide take your profits and exit the trade at 1.5722.

Profits/Losses
Opening transaction: £10,000 x 1.5520 = £15,520
Closing transaction: £10,000 x 1.5722 = £15,722
Profit on trade: £202
Commission: 50 per million = 50p
Profit after commission =£201.50

 

[brasil2000]

Hi,

what commission do you charge for trading CL-03-12 Light Sweet Crude Oil (WTI) and Gold Futures GC-04-12 ROUND TRIP.

Thanks

 

[kevin sims]

With our FX we have different ways of charging to suit the customer. For our Larger traders we show the clean price which is the interbank rate without any fees and charges in the spread. For clean pricing we then charge a flat commission rate per million. We also have a spread based pricing feed which adds about half a pip each side for example EuroDollar on top of the underlying spread.
Our Platform is hosted by Iress, a billion dollar company listed on the Australian stock exchange with over 600 staff. The platform itself is £45 a month which include live LSE, LIFFE and FX feeds. 5 trades a month will get this waived. The platform is web based and can be accessed from any computer with a descent internet connection. All charting facilities are free and we also offer free Autochartist (a pattern based chart recognition software).
The trades will naturally rollover; we do not close and then open the positions. With our financing if you hold a long position over night then you are charged financing and when holding a short position you will receive financing. I am getting the information together to fully explain the financing charges for Tom Next and will post the full explanation in my next post.
There is no commission on spread betting we just charge a transparent bet fee e.g. for equity traders they get the underlying and we charge 0.1% ( for larger traders speak to one of the salesman). The bet fee is to spread bet what commissions are for CFDs.

The information we request from potential clients when requesting info are not that much. When comparing to other providers, to request a demo you have to fill out enough info to actually set up an account. We do not give out any customer info to third parties. We do share customer information with our payment handling provider to check against anti laundering and terrorism. We fully comply with all data protection laws.

Hi

you say that there is a '£45 a month which include live LSE, LIFFE and FX feeds' are there costs for adding other exchanges or are these the only ones you can trade on?

thanks

 

[FP Markets]

Hi,

what commission do you charge for trading CL-03-12 Light Sweet Crude Oil (WTI) and Gold Futures GC-04-12 ROUND TRIP.

Thanks

Hi Brasil

We are currently in the process of mapping it into the platform and should be ready by the end of the month although some testing will have to take place before we release it to our clients. The commissions will depend on the size of trader you are because we tailor our accounts to each client. The futures will be around the same price as other futures we offer but I am unable to give exact charges for round trips. I will look into this and post figures for smaller traders but for more frequent traders you will need to speak to a member of the sales team.
At the moment our gold contracts are traded on the OTC market against the USD or the EUR and are in full contact sizes. The charges are the same as our FX so you can either have the charge in the spread or $50 per million with clean pricing

Kind Regards

 

[FP Markets]

Hi

you say that there is a '£45 a month which include live LSE, LIFFE and FX feeds' are there costs for adding other exchanges or are these the only ones you can trade on?

thanks

We do have other exchanges and the costs are shown at Accounts | Fees and Charges | FP Markets

Kind Regards

 

[catt]

Has anyone here tried FPMarkets?

If so, what's your experience of the platform?

I am looking for DMA which I currently have for my share dealing a/c but I have no leverage and cannot go short.

I have tried CMC Markets and their ilk so don't recommend those guys to me.

 

[DJS1]

Has anyone here tried FPMarkets?

If so, what's your experience of the platform?

I am looking for DMA which I currently have for my share dealing a/c but I have no leverage and cannot go short.

I have tried CMC Markets and their ilk so don't recommend those guys to me.

Currently with FP, ProSpreads and IG but to name a few....

The platform looks professional and is aimed more towards the sophisticated trader I feel, may seem quite complex at first for the less experienced but once you wrap your head around it you’ll realise that it’s fairly simple to navigate and the functionality compared to the majority of platforms out there is good! I recommend getting a demo to try it out, you can’t trade on it and pricing is delayed (the reason they gave me was because they are DMA and price feeds are bloody expensive) but at least you’ll be able to get a feel for the layout (which you can play around with).

Pro’s
Execution speed instantaneous (standard with DMA)
Vast range of equities (especially on LSE and US), more than either ProSpreads or IG (Level 2)
Commissions competitive
Helpful customer service

Con’s
Index futures are pretty expensive for round trips in comparison to other providers (though apparently they are looking into reducing these fees)
Still waiting for iceberg orders to be implemented
Waiting for mobile trading (was told would be working within a month)
The platform is not for beginners

 

[Ross Spur]

Con’s
Index futures are pretty expensive for round trips in comparison to other providers (though apparently they are looking into reducing these fees)

Somewhere on the CS thread you'll find a post by Simon D explaining why the fees for 'DMA' SB will probably always be high.

 

[SpreadBeta]

Ross, I Think it depends on what you are trading..
For index futures I can see that dma (dues to underlying market spread + FP charges) could be more expensive with FP which hedges every bet, than say with a SB company that has enough clients with different positions, that allows them to match them off internally and profit from the spread.

However for equities for example the ability to spreadbet ftse250 and even smallcap shares with only the market spread + 8 to 10 basis points (or even to buy at the lse bid and sell at the lse ask via limit orders + 8-10bp) is considerably cheaper than any other spread betting company I have come across in the last 11 years spreadbetting..... And I've tried a few in that time !!!!

 

[Ross Spur]

Ross, I Think it depends on what you are trading..
For index futures I can see that dma (dues to underlying market spread + FP charges) could be more expensive with FP which hedges every bet, than say with a SB company that has enough clients with different positions, that allows them to match them off internally and profit from the spread.

However for equities for example the ability to spreadbet ftse250 and even smallcap shares with only the market spread + 8 to 10 basis points (or even to buy at the lse bid and sell at the lse ask via limit orders + 8-10bp) is considerably cheaper than any other spread betting company I have come across in the last 11 years spreadbetting..... And I've tried a few in that time !!!!

Good points. I was thinking mainly of index trading. Of the 'normal' SBs, GKFX seems to be about the best for shares, but they offer a limited range of markets, and of course you can only trade the prices quoted, Do you have an account with FP?

 

[catt]

I trade small cap FTSE shares and Aim listed shares, tending to buy and hold only for days to weeks, no longer.

Have been doing this mostly in my ISA but a combination of limited funds, high dealing costs and lack of leverage makes it hardly worth my while. So maybe the SB version would suit me.....

I also want to short FTSE 250 companies when newsflow permits.

 

[catt]

Not to mention the hit from SD at 0.5% of the trade.

 

[catt]

My broker charges £12.10 min for a trade, so £24.20 round trip and the rate is 0.1% so I try to pitch my buys at around the just sub £10k to minimise the effect of commissions.

Having to pay up front means I can only have a handful of trades on at any one time. So I miss trading opportunities and an not diversified sufficiently as far as risk goes.

 

[catt]

When the UK market lacked volatility of late and there were no trades to be had, I tried out buying some US listed ETFs that were doing really well.

Trouble is I found I couldn't trade in and out readily as my broker was charging min of £19.90, that's £39.80 round trip.

I suppose I am looking around for a more suitable platform/fees structure/trading instruments.
I have UK DMA and I use L2 so I am used to that but iDealing is not giving me what I want anymore.
They can keep my ISA for now if I don't find a better home for it but I want to put my other monies to better use.

 

[SpreadBeta]

Good points. I was thinking mainly of index trading. Of the 'normal' SBs, GKFX seems to be about the best for shares, but they offer a limited range of markets, and of course you can only trade the prices quoted, Do you have an account with FP?

Yes, I have recently opened an account with them? From my experiences so far I would basically agree with DJS1"s set of pros and cons list earlier in this thread.

I had briefly looked at GKFX but it didn't cover the range of shares I was looking to trade (I was most reciently with MF Global until it decided to self destruct )

 

[FP Markets]

I trade small cap FTSE shares and Aim listed shares, tending to buy and hold only for days to weeks, no longer.

Have been doing this mostly in my ISA but a combination of limited funds, high dealing costs and lack of leverage makes it hardly worth my while. So maybe the SB version would suit me.....

I also want to short FTSE 250 companies when newsflow permits.

Hi Catt

If you would like to see the full offering of equities we have on the LSE and which ones are shortable you can see our margin table at Margin Rates | Direct Market Access | Spread Betting | FP Markets

Kind Regards