Have I missed something

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gtspeed

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Hi All

Forgive me for being a bit thick , I always thought the FT100 closes at 4.30pm and if this is so how does the IG Platform trade the FT100 24 hours a day?

If it is the broker making the moves is it fair to assume that the broker can ensure that you never really win or have I missed something.

Just a thought while checking a few ideas
 
If you buy/sell the FTSE100 on IG you are not in any transaction involving the actual index: this is a mathematical "average" only anyway, not a financial instrument. IG and the rest offer their market based on the FTSE100's value while its open and on the index's futures while London Stock Exchange is closed.

A broker like IG will not artificially set ridiculous "FTSE100" values as they cannot afford to so blatantly contravene their regulator's conditions. In any case, whereas they might stop you out, they would be inviting all their other customers to jump in at the incorrect price - they would be taken to the cleaners either way.

Brokers in less regulated regimes might do this, but the bigger risk there is they simply close their offices and walk away with all your deposited cash anyway, not just a hunted stop on one tiny trade.
 
Many thanks kind of makes sense. I was just not sure how they worked the movements with a closed market
 
gtspeed said:
Many thanks kind of makes sense. I was just not sure how they worked the movements with a closed market
Click to expand...
Hi gtspeed,
Just to add to Tom's excellent post, if you plan on trading equity indices such as the FTSE 100 - or even just reference them in your trading - then I recommend you get your head around the relationship between the cash index (which you can't trade) and the futures index (which you can trade). As a starting point in that endeavour, check out this Sticky: Essentials Of 'Indices'.
Tim.
 
I'd add that your broker might call it "FTSE - Rolling Cash" - however the underlying price will be based on the futures market as it is a synthetic ie representative price.
 
Real time Broker

Hi All

I know this might sound daft as still learning the ropes (probably still will be in 5 years)

I currently use IG for spread betting however feel a little uneasy as the prices are not from the real market as the FT shuts at 4.30pm yet you can trade through the night, something to with futures as a kind chap explained the system for me.

So my question is there a broker that is as good as IG but uses realtime prices of say the SP500 and FT100

Chin up onward and upward
 
gtspeed said:
. . . I currently use IG for spread betting however feel a little uneasy as the prices are not from the real market as the FT shuts at 4.30pm yet you can trade through the night, something to with futures as a kind chap explained the system for me.

So my question is there a broker that is as good as IG but uses realtime prices of say the SP500 and FT100
Click to expand...
Hi gtspeed
I've merged your new thread with this one as it's essentially the same topic and we have a clear policy of just one thread per topic.

In answer to your question - it doesn't make much difference which broker you choose as they all reference the same prices. The FTSE 100 cash index closes at 4.30pm regardless of whether you're with IG, City Index or CMC etc. The two key points you need to understand are these:

1. As Tom said in post #4, spread betting and contracts for difference (CFD) companies offer a 'derivative' product that is derived from the FTSE 100, Dow 30, S&P 500 etc. cash indices when they're open and then, when they close, from their respective index futures. In themselves, cash indices are not tradable instruments. Whilst futures are tradeable - you're not actually buying or selling a futures contract when you trade with the likes of IG - you're trading their own product that is derived from the futures index.
2. When trading with IG (or similar), their prices are the realtime prices and, if you open up the homepage of any major firm you'll see that their prices are all pretty similar. They may vary slightly as each firm sets their own prices using proprietary algorithms. But the source data - known as the 'underlying' is the same for all of them - so the playing field is level in this regard. (See the links provided by T44, above.) The other reason you needn't worry about any of this is because if the prices set by IG deviate markedly from those set by, say CMC, then arbitrage traders would quickly exploit the difference.

For the reasons stated, when choosing which broker to go with - the issue you raise isn't an issue at all. The things that do matter that you need to focus on when choosing a broker are covered in this FAQ: Can You Recommend a Data Feed, Charting Software & Broker?

Let me know if any of that is unclear.
Tim.
 
I think I understand your concerns - you don't want to be basing your TA decisions on a chart that's not showing accurate prices and on which a rising price isn't a reflection of buying/selling activity, its just a tactic by the broker to increase their profits.

I can't think these concerns would be so serious, even if you're right, that it would seriously harm your trading.

But here's an experiment. I SB with LCG. During the night they offer a market on what they brand as the "UK100", but its really the FTSE100, its just that it would be misleading and probably breach of trademark ownership legislation to call it that and market it as that. During the night the LCG UK100 is open - at exactly 0133 this morning, their M1 chart shows the SELL price as 7316.60. The chart does not display the then buy price.

Have a look at the IG chart, it would be interesting to learn how far apart these two firms' quotes were.
 
Hi

Many thanks , the quote at the time quoted last for IG is 7317.3. You are dead right I have concerns about how the figures are worked hence the post. Being new there are lost of things to learn and understand and the price side was a bit odd as you read post after post of unfair practise and its very hard to get a true idea of a good broker
 
Cheers, that's interesting. I was confident they would be very close together, and they're less than a point apart.

IG and LCG are UK-regulated SB providers so they're about as bona fide as it gets or the regulator here would drop on them. Same cannot be said for brokers based in other jurisdictions but I tend to think anyone who sends thousands of pounds to some address in Belize will end up getting what they deserve.

Brokers get a bad reputation for coaxing traders into long positions and then dropping their quotes to trigger a whole raft of stops. I can't say none of them ever does that but its highly unlikely for a UK-regulated firm.

Its not a sustainable business model anyway - imagine the broker's offering longs on the FTSE at 7300 and they see a bunch of stops at 7275 so they drop the price to 7270 to trigger them. Maybe that makes a bit of sly money but what about the other traders who now jump in at 7270? They get a bargain because there's no way the firm can keep its prices permanently 30pts below the underlying index, so those guys make even more out of the firm than the original bunch who bought at 7300.

Most of the failing traders who complain of being cheated by stop-hunting would have lost everything anyway. They're just trying to make themselves feel better.
 
I think that is a very true statement about traders looking to place blame, which is a fact of life as in my normal day job when something is failing and you try to get to the bottom of the problem the response is mostly the same "It's not me to blame , someone else made the error"

I was just very curious and a little naive as I though that CFD and spread bet were another part of the stock market however appears to be a many a firm are more like bookies and as they say the house always wins
 
^^the ftse and dax often follow the dow jones and the after hours dow jones market.Are you aware of that ?
 
So if spread bets are just that a bet based on what the broker/bookie decides the price to be, is it better to trade CFD or are they priced the same way ?

Which rises another question if CFD and spread are priced the same way why have the 2 systems as they seem to be the same apart from the tax advantage
 
There's no advantage to trading CFD's unless you have an objection to the inclusion of the term "betting" in SB. For some its a bit too blatantly a recognition that investment is speculation is gambling; or they may have a cultural / religious objection to gambling which CFD's allow them to camouflage and duck.

There is really no reason to think a trader could succeed at CFD's where they would have failed at SB.
 
gtspeed said:
So why the 2 systems , has anyone ever found out
Click to expand...

CFDs were derivatives created for the professional users - hedging initially - and are generally one to one with the market proper instruments.

Spread Betting was created primarily for the retail users and is classified as betting because the providers operate as bookmakers and lay the odds (provide their own prices). They must do this to protect the tax free element although they pay tax on the bets. Nowadays their prices are pretty close to the real thing although buy/sell spread often widens rather more.
 
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