IG market or IG index?

[Gob00st]

Hi Guys,
I am new to SB, sorry if my question sounds rubbish.

Since my E-trade demo is a bit slow, I am using IG market demo account, which claimed would only be valid for 14 days . But it only provide CFD trading on forex, indices and commodities.

And I found IG index is doing spread betting, but there is no demo account with it

Spread betting? or CFD? Which one should I choose?
Is CFD is better than spread betting since is using direct market access instead of synthetic dealer set price?
But should I stay with spread betting since it doesn't have any extra cost(commission, stamp duty etc)?

Any input is appreciated
Thanks.
Gob00st

 

[ZEPPO]

Hi Guys,
I am new to SB, sorry if my question sounds rubbish.

Since my E-trade demo is a bit slow, I am using IG market demo account, which claimed would only be valid for 14 days . But it only provide CFD trading on forex, indices and commodities.

And I found IG index is doing spread betting, but there is no demo account with it

Spread betting? or CFD? Which one should I choose?
Is CFD is better than spread betting since is using direct market access instead of synthetic dealer set price?
But should I stay with spread betting since it doesn't have any extra cost(commission, stamp duty etc)?

Any input is appreciated
Thanks.
Gob00st

You really are asking questions that only yourself can answer; why don't you sit back, relax, and do just that?
CFDs and spreadbetting are pretty much the same in that you take the price the broker gives you; futures and shares, on the other hand, reflect the true market price.
With this info you should be able to take a decision.
Good luck.

Eduardo.

 

[Gob00st]

You really are asking questions that only yourself can answer; why don't you sit back, relax, and do just that?
CFDs and spreadbetting are pretty much the same in that you take the price the broker gives you; futures and shares, on the other hand, reflect the true market price.
With this info you should be able to take a decision.
Good luck.

Eduardo.

Thanks for you reply.
Now I have got the following questions:
1>
Does CFD reflect the true price?

2>
I am using IG market demo for CFD and checking the 'real time chart' of Wall Street Cash, but it just appears to me that the Dow has not opened yet today bcos it 5 a.m in the States!

So is CFD also using broker given synthetic price?

3>
How could broker provide 24 hours betting service even when the underlying market is closed? Because as far as I known ,even by using synthetic price, SB or CFD should still reflect the fluctuation of underlying market!

4>
Will the money the broker(SB or CFD) taken from client would make any impact on SB or CFD market?
Like more ppl go long would make the synthetic price go up?
Like more ppl go short would make the synthetic price go down?

5>
Will the money the broker(SB or CFD) taken from client would make any impact on the underlying market?

I am really confused now

 

[ZEPPO]

Thanks for you reply.
Now I have got the following questions:
1>
Does CFD reflect the true price?

2>
I am using IG market demo for CFD and checking the 'real time chart' of Wall Street Cash, but it just appears to me that the Dow has not opened yet today bcos it 5 a.m in the States!

So is CFD also using broker given synthetic price?

3>
How could broker provide 24 hours betting service even when the underlying market is closed? Because as far as I known ,even by using synthetic price, SB or CFD should still reflect the fluctuation of underlying market!

4>
Will the money the broker(SB or CFD) taken from client would make any impact on SB or CFD market?
Like more ppl go long would make the synthetic price go up?
Like more ppl go short would make the synthetic price go down?

5>
Will the money the broker(SB or CFD) taken from client would make any impact on the underlying market?

I am really confused now

Now you have raised a very important point here - check what happens with the money in your account; I know that spreadbetting firms segregate the money, ie., is kept separately, but I am not sure about CFDs.
If you are given a price and the market for the underlying is close, then clearly the broker is making it up; real handy for hitting your stop loss when the market is closed!
The way these guys work is by hedging in bulk (or so they say!), they hedge their net positions.
Also, they mirror their winning customers, though this is not officially recognised, of course.
IG is probably one of the best in the business, honesty wise, that is. Others move the goalposts, give you the trade when the market is against you, etc...
Try to understand this: spreadbetting is that, betting, and spreadbetting firms are nothing more than bucket shops - glorified bookmakers.
It is a lucrative business, otherwise there wouldn't be so many around.
CFD is supposed to be a contract between two parties (you and the broker) but then, they also offer Forex, where prices are all over the place - just check the Forex providers and you'll see!
These are useful tools if you know what you are doing, but you must be very careful, you can easily overleverage (they offer very low deposit accounts) and, quite frankly, are not as transparent as they want us to believe; just avoid day trading with them, you could get some nasty surprises.

Eduardo.

 

[Gob00st]

Now you have raised a very important point here - check what happens with the money in your account; I know that spreadbetting firms segregate the money, ie., is kept separately, but I am not sure about CFDs.
If you are given a price and the market for the underlying is close, then clearly the broker is making it up; real handy for hitting your stop loss when the market is closed!
The way these guys work is by hedging in bulk (or so they say!), they hedge their net positions.
Also, they mirror their winning customers, though this is not officially recognised, of course.
IG is probably one of the best in the business, honesty wise, that is. Others move the goalposts, give you the trade when the market is against you, etc...


Eduardo.

Thanks for you reply Eduardo.
But I don't quite understand those:
1>"then clearly the broker is making it up; real handy for hitting your stop loss when the market is closed!"
Does this mean the deliberately let the make up price hit your stop loss so you lose your money and the broker get it?
So we should not try to leave our position open during night or weekend ??
2>
"The way these guys work is by hedging in bulk (or so they say!), they hedge their net positions. Also, they mirror their winning customers."
What does this mean?

Thanks
Gob00st

 

[ZEPPO]

Thanks for you reply Eduardo.
But I don't quite understand those:
1>"then clearly the broker is making it up; real handy for hitting your stop loss when the market is closed!"
Does this mean the deliberately let the make up price hit your stop loss so you lose your money and the broker get it?
So we should not try to leave our position open during night or weekend ??
2>
"The way these guys work is by hedging in bulk (or so they say!), they hedge their net positions. Also, they mirror their winning customers."
What does this mean?

Thanks
Gob00st

This is what it mean:
1) They'll get you given half a chance, so be careful where you put your stop losses.
2)If you win consistently, they will copy your trades so as to make more money from you.
These are waters full of sharks, where nobody will think much about parting you from your money, and back stabbing is the currency of choice!
Hope this helps; just be careful, that's all.

Eduardo.

 

[maneki_neko]

Hi Eduardo,

Could you explain why a spread betting firm copying your trades (if you're consistently successful) is a bad thing? How does it impact negatively on your bets?

Thanks,
MN

 

[ZEPPO]

Hi Eduardo,

Could you explain why a spread betting firm copying your trades (if you're consistently successful) is a bad thing? How does it impact negatively on your bets?

Thanks,
MN

It just pisses me off that I am charged for the trade; if I am so good that they mirror the trade, they should at least reduce the spreads charged, don't you think?
Also, they will process first their trades, then yours - making you less money than they themselves get out of your trade!
In any case, I find it dishonest, but that is me.

Eduardo.

 

[brendansvest]

They cant do that no matter what you think. All firms have to comply with TCF and best execution. They dont copy your trade and they certainly dont execute an identical trade before yours. SB and CFD firms indentify the winning traders and simply hedge their orders against the underlying. Too much paranoia on here, it's not the X-files!!

 

[maneki_neko]

It just pisses me off that I am charged for the trade; if I am so good that they mirror the trade, they should at least reduce the spreads charged, don't you think?
Also, they will process first their trades, then yours - making you less money than they themselves get out of your trade!
In any case, I find it dishonest, but that is me.

Eduardo.

Ah, OK - thanks for explaining I was just worried that they would do something to prevent the consistently good spread bettors from winning. Not that I'm consistently good at the moment, but I aim to be

 

[brendansvest]

It just makes good practice. if you are the other side of someone who is consistently right you would lose money. Laying it off is the correct thing to do. The firms also have to balance their books with hedged and unhedged trades to give themselves the best chance of turning a profit.

 

[ZEPPO]

They cant do that no matter what you think. All firms have to comply with TCF and best execution. They dont copy your trade and they certainly dont execute an identical trade before yours. SB and CFD firms indentify the winning traders and simply hedge their orders against the underlying. Too much paranoia on here, it's not the X-files!!

No, it's worst than the X-Files!
These guys are nothing more than glorified bookmakers; why do you think there are so many of them mushrooming about? They set their own prices and in some cases (CMC, for example) will create spikes which are seen nowhere in the market just to hit your stop loss!
Wellcome the paranoia I say!

Eduardo.

 

[Trader1UK]

So ig Index or ig markets?

 

[maneki_neko]

Is it true that (some?) spread betting firms will try to "crack down" on those who are consistently good? The market is nobody's friend, and I'm not naive enough to think that spread betting firms are either, but it would seem dishonest for them to somehow prevent you winning just because you're good at it...

 

[brendansvest]

I have been both sides of the desk. A large percentage of trades are hedged into the market. If you are spreadbetting you are paying away the price for the privillege of paying no tax or commision, CFDs should mirror the market as closely as possible and in regard to CMC, they have always busted trades when there is a major price issue and the underlying has not traded at those levels. Everyone on here is a typical trader, always blaming someone or something else when they get it wrong.

 

[ZEPPO]

I have been both sides of the desk. A large percentage of trades are hedged into the market. If you are spreadbetting you are paying away the price for the privillege of paying no tax or commision, CFDs should mirror the market as closely as possible and in regard to CMC, they have always busted trades when there is a major price issue and the underlying has not traded at those levels. Everyone on here is a typical trader, always blaming someone or something else when they get it wrong.

This is not about blaming, but about being realistic; CFDs and Spreadbetting firms do make their own prices.
And yes, it is true, if you win too often, they'll close your account.
This, I suspect, is because the "punter" (or trader if you prefer) has found a way to get round the house shenanigans - like CMC.
Some are good, like IG, others are not so good and will take as much as they can out of their clients; then go and complain to the Ombudsman.
If you have a regular broker, you are not going to have your account closed because you win too often, are you? Also, you can scalp if that is your cup of tea (not mine, though).
Try scalping with spreadbetting firms, and we'll see if you "blame" or not!

Eduardo.

 

[Umbrella]

Hi Guys,
I am new to SB, sorry if my question sounds rubbish.

Since my E-trade demo is a bit slow, I am using IG market demo account, which claimed would only be valid for 14 days . But it only provide CFD trading on forex, indices and commodities.

And I found IG index is doing spread betting, but there is no demo account with it

Spread betting? or CFD? Which one should I choose?
Is CFD is better than spread betting since is using direct market access instead of synthetic dealer set price?
But should I stay with spread betting since it doesn't have any extra cost(commission, stamp duty etc)?

Any input is appreciated
Thanks.
Gob00st

Hi, what size do you plan to trade with IG? With SB you can do smaller sizes such as £1 on FTSE, but with CFD the unit size is 1 contract or £10. This is the main difference. Also, with SB your profits will be tax free, but with CFD you should pay capital gains tax. If you happen to lose money on CFD, you can use the losses to offset your tax liabilities. Most CFD customers at IG are pretty big with £50K plus accounts.

 

[tar]

Hi, what size do you plan to trade with IG? With SB you can do smaller sizes such as £1 on FTSE, but with CFD the unit size is 1 contract or £10. This is the main difference. Also, with SB your profits will be tax free, but with CFD you should pay capital gains tax. If you happen to lose money on CFD, you can use the losses to offset your tax liabilities. Most CFD customers at IG are pretty big with £50K plus accounts.

Ig offers mini CFD contracts (2 pound for the FTSE , 1 pound for Dow )

 

[tar]

Hi Guys,
I am new to SB, sorry if my question sounds rubbish.

Since my E-trade demo is a bit slow, I am using IG market demo account, which claimed would only be valid for 14 days . But it only provide CFD trading on forex, indices and commodities.

And I found IG index is doing spread betting, but there is no demo account with it

Spread betting? or CFD? Which one should I choose?
Is CFD is better than spread betting since is using direct market access instead of synthetic dealer set price?
But should I stay with spread betting since it doesn't have any extra cost(commission, stamp duty etc)?

Any input is appreciated
Thanks.
Gob00st

How is your size ? what u want to trade ? IG offers CFD OTC ( like SB ) and Direct Access , but if your size is small and u r new go with IGINDEX better for u ...

 

[Gob00st]

How is your size ? what u want to trade ? IG offers CFD OTC ( like SB ) and Direct Access , but if your size is small and u r new go with IGINDEX better for u ...

Hi Tar,
Thanks for your reply. I am not gonna go bigger size over £1000 at the moment . But I have been wondering how does the DMA advantage offered by CFD gonna make a difference?

Regards
Gob00st