FP Markets

[FP Markets]

Another question for Mr FP: if clients are trading the real market, does that mean the margins required are those set by the exchanges, in other words, huge relative to normal SB, especially for the DAX?

The margins we offer are not those set by the exchange. We are aware that margins set by exchanges for futures can be very high so we subsidise majority of these for the client. Our margin table is more geared towards the liquidity and volatility of the underlying instrument. To give you an example on our Indices we offer around a 2-3% margin. We have about 1300 tradable securities on the LSE so they do vary dependant on liquidity and volatility so they will range from 3-100%. For the DAX futures contract our margin is 3%. If there are certain securities that you like to trade and the margin is higher than you would like we are always willing to see if we are able to reduce the margin depending on the stock.
You can see our margins for every tradable product, and whether they are short sellable at
Margin Rates | Direct Market Access | Spread Betting | FP Markets and download the margin table

 

[bangkoker]

Thanks for continuing to explain things further. I am sure it has helped people understand what you offer and helped show the advantages of DMA. Good luck

 

[capitalspreads]

unfortunately am forced to comment here as Prospreads is part of the LCG group.

All client funds in Prospreads are segregated in the same way as they are in the UK. The Gibraltan Authorities are even more stringent in their client designations and controls than the UK.

Simon

 

[FP Markets]

Thanks for clearing that up Simon.

In completing the question on the differences between FP Markets and Prospreads, we both offer DMA functionality but ProSpreads put their charges within the spread whereas we charge via a bet fee.

We are the first company in the UK to offer DMA Spread Betting to both retail and professional clients. We hedge 100% of all client trades. At FP markets we specialise in the equities markets with over 1500 just on the LSE with margins as low as 3%. Overall we offer in excess of over 8800 tradable equity products on exchanges in Europe, US and Asia.

 

[Ross Spur]

unfortunately am forced to comment here as Prospreads is part of the LCG group.

All client funds in Prospreads are segregated in the same way as they are in the UK. The Gibraltan Authorities are even more stringent in their client designations and controls than the UK.

Simon

That sort of prompts the question why Prospreads is still based in Gibraltar, because I'd suspect that more UK SB-ers would be tempted to give it a try if they were based in Blighty?

 

[Ross Spur]

Instead of chasing our tales all we can recommend is to head to our website and download the DMA Spread Betting guide. This eBook was developed specifically to answer all the questions you have been asking in detail. It will explain how DMA Spread Bet works in comparison to CFDs and standard spread bet. It will also explain how our fees and charges work. Along with this it will provide fully worked examples comparing DMA spread bet to normal spread betting and DMA CFDs. 0.

Is that the one where you have to give an address, phone no, etc? Not keen on that since AN Other SB provider apparently sold my details, resulting in loads of unwanted calls from firms offering fantastic investment opportunities. Why can't the info be freely dowloaded, or be actually on the site?

Maybe this is explained in the guide, but if it's DMA, how can you keep the index margins much lower than that required for futures? What would happen if there's a major disaster when the market is closed, resulting in a huge gap?

 

[capitalspreads]

ross

for an answer please go to ProSpreads thread

sorry FP i promise i will try not to answer here again

simon

 

[FP Markets]

Is that the one where you have to give an address, phone no, etc? Not keen on that since AN Other SB provider apparently sold my details, resulting in loads of unwanted calls from firms offering fantastic investment opportunities. Why can't the info be freely dowloaded, or be actually on the site?

Maybe this is explained in the guide, but if it's DMA, how can you keep the index margins much lower than that required for futures? What would happen if there's a major disaster when the market is closed, resulting in a huge gap?

I can't speak for other SB companies but if you look in our T&C, we do not give out any information to third parties.

Secondly, FSA requires we keep all client funds in a segregated client trust account. No matter what the margins are we do not use client funds to hedge. As this is the case FP Markets regardless will have to put up the full margin. The reason we charge the margins at the rates we do is due to our own risk management.

 

[riogordo]

FP

I have just been looking through your website and most of it is clear now that I have worked out the commissions structure. But what is the betting tax of 1.80%? This is something that I have not come across before.

 

[6am]

FP

I have just been looking through your website and most of it is clear now that I have worked out the commissions structure. But what is the betting tax of 1.80%? This is something that I have not come across before.

They explain it here under "Further Information about the 1.8% Losing Bet Charge on Net Losses over a Calendar Quarter" FP Markets DMA Spread Betting | DMA Spread Betting Explained | Spread Betting | FP Markets

Basically if you lose they pay 3% to her majesty, They would like you to contribute some of the payment.

 

[riogordo]

They explain it here under "Further Information about the 1.8% Losing Bet Charge on Net Losses over a Calendar Quarter" FP Markets DMA Spread Betting | DMA Spread Betting Explained | Spread Betting | FP Markets

Basically if you lose they pay 3% to her majesty, They would like you to contribute some of the payment.

6am.

Many thanks didn't find that bit. So if you loose £1,000 you have to donate an extra £18. Only small fry, but still rubbing salt into the wounds!

 

[FP Markets]

6am.

Many thanks didn't find that bit. So if you loose £1,000 you have to donate an extra £18. Only small fry, but still rubbing salt into the wounds!

One of the main reasons why DMA Spread Betting has not been so prevalent in the markets to date is due to the 3% betting duty which a firm must pay to HMRC on ‘net client losses’ over a quarterly period. This charge is traditionally covered from widening spreads and as a result of a firm profiting from client losses. Rather than focusing on profiting from client loses and/or increasing spreads we have chosen to provide our clients with DMA prices and have clients who result in the firm incurring a betting duty contribute some of this obligation.

We offer DMA Spread Bet by providing a model whereby profitable clients who are not responsible for incurring the duty for the firm don’t pay for the duty and loss making clients that result in the betting duty being incurred contribute to paying this duty via a small ‘bet charge’. All clients will enjoy the benefits of DMA Spread Bet functionality; however losing clients will incur a bet charge of 1.8% of their ‘net losses’ over a calendar quarter

 

[Ross Spur]

One of the main reasons why DMA Spread Betting has not been so prevalent in the markets to date is due to the 3% betting duty which a firm must pay to HMRC on ‘net client losses’ over a quarterly period. This charge is traditionally covered from widening spreads and as a result of a firm profiting from client losses. Rather than focusing on profiting from client loses and/or increasing spreads we have chosen to provide our clients with DMA prices and have clients who result in the firm incurring a betting duty contribute some of this obligation.

We offer DMA Spread Bet by providing a model whereby profitable clients who are not responsible for incurring the duty for the firm don’t pay for the duty and loss making clients that result in the betting duty being incurred contribute to paying this duty via a small ‘bet charge’. All clients will enjoy the benefits of DMA Spread Bet functionality; however losing clients will incur a bet charge of 1.8% of their ‘net losses’ over a calendar quarter

Good incentive not to lose, I suppose, but having clients subsidising FP seems odd, even at 'only' 1.8%. Is this figure based on a guestimate of punters' win/loss?

 

[FP Markets]

Good incentive not to lose, I suppose, but having clients subsidising FP seems odd, even at 'only' 1.8%. Is this figure based on a guestimate of punters' win/loss?

Calculating from our last 5 years of trading, this is the figure that will cover our net client losses.

 

[lilbitpipsy]

Hi,

The idea of DMA Spread Betting has piqued my curiosity and I have a some questions. As far as I'm aware, the only two UK based companies that do this and automatically hedge the trades are FP Markets and FXCM (although I could be wrong), so I have a few questions about FP Markets, particularly on the FX side.

Am I right in assuming that DMA Spread Betting means that FP Markets simply mirror the underlying market in order to be allowed to call this spread betting?

What is the name of the spread betting platform you use, is it a desktop or web only based system, and are there any costs associated with using it (or advanced feature costs, such as for charting etc? (by the way, what charting is available on your platform as standard and does it cost anything?).

For rollover on FX, it says on your website you use TomNext rates, but don't mention any other charge on that page. Yet on the webpages outlined in my next question below, under "Interest" is "FPM rate plus/- 3%". Does this mean that a trader would be charged LIBOR TomNext +/- 3% for each rollover? On the subject of rollover, will the trades be allowed to rollover naturally or would they be closed by FP Markets and then reopened at current market rates.

You haven't mentioned the brokerage charges levied on your webpage at both "http://www.fpmarkets.co.uk/account/account-types/fund-your-account" and "http://www.fpmarkets.co.uk/account/account-types/fees-and-charges". Could you please explain why these are levied when there is already a bet fee being charged for using FP Markets.

If you hold a trade open for over a month, and that is your only trade for 2+ months; will you still be charged data fees? (The website says no fee if 1 trade per month is made).

Why do FP Markets require so much information from their potential customers (i.e. First Name, Surname, Email Address, Phone Number and Postcode) just to be able to download information on your business practices (DMA Spread Betting Guide etc.). I have read the privacy policy on your website in it's entirety and it says this information can be passed on not only to FP Markets and it's affilates, but to any company FP Markets has a relationship with. You are supposed to be able to opt-out of any/all marketing on any form that requires personal information, but there is no such facility on the form.

Thanks.

LBP.

 

[Ross Spur]

Why do FP Markets require so much information from their potential customers (i.e. First Name, Surname, Email Address, Phone Number and Postcode) just to be able to download information on your business practices (DMA Spread Betting Guide etc.). I have read the privacy policy on your website in it's entirety and it says this information can be passed on not only to FP Markets and it's affilates, but to any company FP Markets has a relationship with. You are supposed to be able to opt-out of any/all marketing on any form that requires personal information, but there is no such facility on the form.

Thanks.

LBP.

That part put me off, too, as another SB has apparently passed on my details to various other companies that I definitely don't want to ring me flogging all sorts of stuff.

 

[lilbitpipsy]

Hi Ross Spur,

Some brokers at least give you the option to opt-out on the form. I'm wondering why FP Markets do not. I guess some people will put false information in those forms with a throwaway email address, but I'm pretty sure that isn't legal. I would like to know whether not allowing someone to opt-out on a form like this would still comply with UK data protection laws.

LBP.

 

[FP Markets]

Hi,

The idea of DMA Spread Betting has piqued my curiosity and I have a some questions. As far as I'm aware, the only two UK based companies that do this and automatically hedge the trades are FP Markets and FXCM (although I could be wrong), so I have a few questions about FP Markets, particularly on the FX side.

Am I right in assuming that DMA Spread Betting means that FP Markets simply mirror the underlying market in order to be allowed to call this spread betting?

What is the name of the spread betting platform you use, is it a desktop or web only based system, and are there any costs associated with using it (or advanced feature costs, such as for charting etc? (by the way, what charting is available on your platform as standard and does it cost anything?).

For rollover on FX, it says on your website you use TomNext rates, but don't mention any other charge on that page. Yet on the webpages outlined in my next question below, under "Interest" is "FPM rate plus/- 3%". Does this mean that a trader would be charged LIBOR TomNext +/- 3% for each rollover? On the subject of rollover, will the trades be allowed to rollover naturally or would they be closed by FP Markets and then reopened at current market rates.

You haven't mentioned the brokerage charges levied on your webpage at both "http://www.fpmarkets.co.uk/account/account-types/fund-your-account" and "http://www.fpmarkets.co.uk/account/account-types/fees-and-charges". Could you please explain why these are levied when there is already a bet fee being charged for using FP Markets.

If you hold a trade open for over a month, and that is your only trade for 2+ months; will you still be charged data fees? (The website says no fee if 1 trade per month is made).

Why do FP Markets require so much information from their potential customers (i.e. First Name, Surname, Email Address, Phone Number and Postcode) just to be able to download information on your business practices (DMA Spread Betting Guide etc.). I have read the privacy policy on your website in it's entirety and it says this information can be passed on not only to FP Markets and it's affilates, but to any company FP Markets has a relationship with. You are supposed to be able to opt-out of any/all marketing on any form that requires personal information, but there is no such facility on the form.

Thanks.

LBP.

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.

 

[lilbitpipsy]

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

 

[Ross Spur]

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

Apparently this info is required to weed out money-launderers and terrorists who have a part-time interest in DMA spreadbetting.