market makers

genti

Active member
152 0
Market Makers

Hi everybody,

we all understand that the aim of all Market makers (D4F fins, city index, ig etc) is to empty our acc, however if we only woning about it does not help our psychology about trading,

what are we doing to solve it?

we also need to be hosent that D4F has the best spreads and software.

please let me know your thoughts

have a nice weekend
Genti
 
Last edited:

zambuck

Experienced member
1,608 102
...someone I know..who is also very experienced in TA etc once said that rather than spread betting one should play in a casino...as there are more thrills and at least you can smoke and drink while watching your money evaporate...

I wonder if he is correct..?????..any comments...???
 
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CityTrader

Established member
665 26
Sorry to be pedantic, but...I wouldn't call what those firms do market making per se. The market makers are cash traders at investment bank, who make a 2 way price to other member firms, and their own clients. All the spread betting firms do, is make you a price around the market makers price. Effectively, they are just taking a wholesale price ( which isn't even available to any of them directly other than IG who are a member firm of the LSE) adding a margin and retailing it to the retail man- i.e you!
 

genti

Active member
152 0
cheers for your response guys,

zambuck. you beleive that spredbeting is a gambel so please what will be best for us to do then.

However D4F prices are the same with level2 data, the same you get with GNItuch or any broker,

thank you
GENTI
 

spreadbet

Member
88 0
Spreadbetting v futures ect

Yes spreadbetting is a gamble, so are futures as is investing in shares or even buying an endowment policy. ( as I can well testify, currently down 28% against the value of my mortgage )

At the end of the day it boils down to which vehicle we choose to use in an attempt to make a couple of quid. I would not wish to see the rugby union v rugby league code scenario develop as that only held back progress. Look how well both codes are doing now the pettiness no longer exists.

I think that people who play the futures markets, buy shares or spreadbet should co-operate to expose those who seek to exploit the unwary.

In my opinion the biggest risk in spreadbetting is for the inexperienced, by which I mean new to TA, new to spreadbetting. The inexperienced would not be able to spot a good bookie from a bad one. Then even if they get the TA right they still must learn to trade, this latter point requires a great deal of discipline when spreadbetting, if you buy/sell when the spread is too wide you may well get burned, there are times when you can enter a bet at prices that are in line with the market just a few seconds after they were well out of line.

If you cannot find the deal you like then walk away.

Stay Lucky

:D
 

cassiopeia

Active member
133 2
Spreadbetting companies, brokers, marketmakers and ourselves are all (effectively) businesses who attempt to take a net profit out of the market, they/we simply have different strategies to do this. Whilst it is true some of these may possess a temporary advantage, competition should eventually force the costs down to competitive levels.

The main reason SB companies are able to offer less competitive prices than futures brokers is mainly due to their flexibility and ease of use for novices and capital gains tax exemption for the more experienced, or so we think!

The mistake people make is to use SB firms for daytrading. They do however offer a useful product for medium term trades where the spreads and bias are proportionally less significant. They may even have an advantage over futures brokers for NET profits over these longer timescales.
 

mmillar

Guest
330 5
Genti,

You appear to have done the comparisons between SBs and market prices and worked out - like many of us already have - that they are the same and SB bias is a fallacy.

However, I'm intrigued why you then 'understand that the aim of all Market makers is to empty our accounts'. Surely if you are getting market prices from SBs, it then follows that they make their money from the spread, and therefore it is in their interest for us to stay around and trade as long as possible.

cheers

mmillar

p.s. D4F is the only marketmaker. The others SBs are brokers.
 

mmillar

Guest
330 5
JonnyT - lol. I assume you are just looking for an argument. D4F spreadbet prices and spreads are exactly the same as their CFDs. Are you also saying that CFDs are 'not trading'. Real men only trade futures perhaps?
 
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JonnyT

Senior member
2,560 22
Hi mmillar,

I'm using the Inland Revenues definition. A spreadbet is a bet. Buying and selling CFDs, Futures or shares is trading.

Bit of a irony in there though :D

JonnyT
 

zambuck

Experienced member
1,608 102
Genti

I know nothing about spreadbetting, CFD, futures etc. apart from things advertised and discussed here...I am happy trading shares using my method which does not require for me to look at new things....perhaps boring existence....

There is always money to be made even in bearish market if ones explorations etc are well tuned...so far that has been my method...

But it is useful to get feedback from you guys about other trading methods...

regards
 

zambuck

Experienced member
1,608 102
JonnyT said:
Hi mmillar,

I'm using the Inland Revenues definition. A spreadbet is a bet. Buying and selling CFDs, Futures or shares is trading.

Bit of a irony in there though :D

JonnyT
...very interesting...so lets say if we made 50k in per annum, with 30k coming from trading and 20k came from spreadbetting....would inland revenue consider 20k as income or gambling income.....????..and is it free of any tax...??

Must ask my accountant..!!!
 

spreadbet

Member
88 0
with respect to the tax question, firstly to pay capital gains tax there has to be an element of investment ie the right to own something that may appreciate or depreciate. Naturally speadbetting has no investment content hence no capital gains.

As for the income tax scenario I think it would boil down to the number of hours worked as a trader rather than the amount of money gained. If it were taxed as income then presumably all costs would be tax deductible as would losses.

I am not an accountant, these are just my personal views.

cheers

spreadbet

:D
 
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