How unscrupulous are SB firms?

[yakatan]

I was demo trading with Capital Spreads and CMC and was horrified to see what they were upto. CMC put in crazy bars (against those going long on a serious bull rally) these bars didn't exist in the real market rally. I wrote to them and sent the screen print of the offending bar and got a reply saying that it was a data error and monies would be reinstated. I thought that this was a genuine error until it happened again another 3 times under similar market conditions. When I asked them why this problem occurs every time a client is going to make a good profit they declined to respond.


With Capital Spreads I was stopped out when I shouldn't have. I checked to see if the price had reach the stop loss from another source and realised, spreads considered, I was 10 points away from it at its nearest. Needless to say the market went well in my direction after they stopped me out. I called them but they wouldn't agree. So I asked them if they follow the real market prices and they said yes. That is a lie for a start.

All this scared me from trading for real as these firms seem like cowboy outfits.
Why isn't the FSA brought in? What's the bloody point of claiming they are FSA when the FSA 't lets them get away with day-light robbery. How do the cover themselves legally?

This situation is ridiculous. It is like the second horse wins or the goal posts are brought closer together as the striker gets closer to the goal. Imagine casinos behaving like this. They'ed be closed down in an instant.

Are there any fair playing spreadbetting firms out there?

Can trading DMA avoid these con tricks?

 

[Aston1st]

The Spread betting firms are legalised theft. The danger is that because they have "Authorised by the FSA" clients are duped into believing that the firm is Kosher. It or they are certainly not.

Not sure why the FSA cannot be bothered to do anything. They would only need to experiement with £10,000 account to see the extent in which they maniuplate their prices in line with the Market, but they don't. Let's face it the FSA are funded by the Cowboys in the 1st place, fine them too heavly and they will recieve less funding!

 

[yakatan]

The Spread betting firms are legalised theft. The danger is that because they have "Authorised by the FSA" clients are duped into believing that the firm is Kosher. It or they are certainly not.

Not sure why the FSA cannot be bothered to do anything. They would only need to experiement with £10,000 account to see the extent in which they maniuplate their prices in line with the Market, but they don't. Let's face it the FSA are funded by the Cowboys in the 1st place, fine them too heavly and they will recieve less funding!

FSA with a £10,000 account would be a great way to expose them as long as there are no moles in the FSA to warn the SB firms.

 

[Trader333]

The FSA probably don't care as these are classed as betting companies and not brokers. Have you ever hear of a bookie that is FSA registered or authorised ? All SB companies state that their quotes are "indicative" and as such they can quote you what they want when they want and there is nothing that can be done about it.

Not all of them are the same though and some are much better than others so you would be advised to select one that has a good reputation (IG are pretty good in my view). Failing that then the only other option is to use a direct access broker.


Paul

 

[gle101]

The FSA probably don't care as these are classed as betting companies and not brokers. Have you ever hear of a bookie that is FSA registered or authorised ? All SB companies state that their quotes are "indicative" and as such they can quote you what they want when they want and there is nothing that can be done about it.

Not all of them are the same though and some are much better than others so you would be advised to select one that has a good reputation (IG are pretty good in my view). Failing that then the only other option is to use a direct access broker.


Paul

I don't agree, the MiFID financial directive has just come into play and the Industry is bound to change. Trading with financial instruments through Spread Betting is growing rapidly and is now targeting main stream. Do you really think the EU financial institutions would let them carry on in the long run as they do? No I can assure you harder regulation and licensing is around the corner. This will take some time but the same fate that befell Casino gambling (through a regulated body) in the early days will eventually also apply to the Spread Betting industry as well.

 

[Trader333]

Changes may well come into effect, I am referring to how things are now and not how they may be in the future. The issue here is that using SB firms is not classed as trading because if it were then they would be subject to the same regulations as brokers.


Paul

 

[Aston1st]

Here is something spooky. I was trading on CMC today. I have been up quite abit since the start of this week. While I know it's not the best medium to do so I have been scalping it.

Then entirely random of course, I recieved a phone call from CMC, asking me why I have not been trading a particular account of mine. Like I fool I told them I was trading my other account, a fool as I helped them confirm that was at my trading station.

To put things into persceptive I have never recieved an unsolicited call from CMC ...............EVER!

Have no doubt these guys are watching your position and trying to carve you up, your not just trading the Market with these guys your trading directly against them. Since I don't have the funds as yet to trade futures direct from an exchange I am stuck with these Bucket Shop establishments.

I have also noticed that their quoted price is often 10 ticks below the market price !

 

[yakatan]

Here is something spooky. I was trading on CMC today. I have been up quite abit since the start of this week. While I know it's not the best medium to do so I have been scalping it.

Then entirely random of course, I recieved a phone call from CMC, asking me why I have not been trading a particular account of mine. Like I fool I told them I was trading my other account, a fool as I helped them confirm that was at my trading station.

To put things into persceptive I have never recieved an unsolicited call from CMC ...............EVER!

Have no doubt these guys are watching your position and trying to carve you up, your not just trading the Market with these guys your trading directly against them. Since I don't have the funds as yet to trade futures direct from an exchange I am stuck with these Bucket Shop establishments.

I have also noticed that their quoted price is often 10 ticks below the market price !

Why do they need to call you to figure out if you are trading on your other account, surely they can see on their computers that you are actively using that account?

YES, they do follow what you trade. I asked that question to a senior member at CMC who told me that they follow you at over £10 a point.