Losses can exceed deposits vs. Guaranteed Stop Loss Order

Lee Shepherd

Well-known member
Feb 12, 2008
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#16
No one seems to be discussing the obvious here. Sorry to kill this debate but this conversation based on your broker f**king with your prices should be put to bed with ease.

ARBITRAGE

Obviously not a true used word in the sense of taking advantage in this situation as it simply does not exist (and you'd waste a lifetime looking for it) However, for those reading it goes like this:

First - as a trader you will have multiple screens, now:

You will have 2 brokers platforms up and running, broker 'A' decides to attempt to stop you out (hunt your stop loss), but only on your account - so the DJIA now looks like this .

Broker A (screen 1) - is showing the DJIA at 13000
Broker B (screen 2) - is showing the DJIA at 12950

A difference of 50pts

You now deal on both platforms at the same time and long one whilst shorting the other. When the offending broker returns to normal pricing, you close both trades and pocket the difference.

Easy money, free money, in fact so easy it simply does not exist for this very reason. Brokers prices will always differ and also with spread betting prices, however, trying to profit out of the difference (spreads/comms), is non existent.

All the best,

Lee
 
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