Newbie question re SB prices

[london1971]

Hi there

This is my first post, so please be gentle!

I am a novice and am interested in using a SB platform for trading. However I've noticed that the OHLC prices quoted by SB firms differ from other market sources.

For example for today, 21st Feb, Hargreaves & Yahoo show OHLC for RRS.L as
7160,7175,7041,7135
but IG Index show for RRS.L DFB
7135,7180,7080,7135

I'm aware that SB firms set their own prices and it's our choice whether to take them or not, but I am surprised that they differ so considerably (in this case for the day's low) from the "real" market.

Any comments/thoughts/explanation would be greatly appreciated.

Thanks in advance.

 

[Lord Flasheart]

This may be because you may not realise that most firms attach there price above the ask price. so if the price on euro/usd is 1.3250, then the spread may be 1.3251/53. hope it makes sens if not ask away

 

[scose-no-doubt]

If what you say is true it's cos they're robbers.

Obviously kicked out stops above 75 for their own benefit and probably never offered sub 80 cos they had too much exposure.

 

[SpreadBeta]

Looking at the LSE trade data for RRS.L for the 21st there was a single trade at 7041 classified as a "negotiated trade" I.e. it would likely be between two private parties and done away from the London stock exchange and simply reported to the LSE later.
Ignoring that trade the next lowest trade on the 21st was an AT (normal) type trade at the level of 70.85 at 12.19.
IGs prices would include their spread of approx 0.08% (8 basis points) which would account for about 5-6 pence, making their lowest quoted bid price on the day as 70.85-0.05 = 70.80 which is correctly what they report.
The thing to realise is that often the high or low of the day reported for a share on the LSE is a single trade/print and would not have been a price you could have expected to obtain even if you had direct market access.
If you need to understand the intraday trades /prices/bid and ask prices etc quotes for a share to aid your spreadbetting, than I suggest a program such as Sharescope with intraday data (even if you only pay for the delayed data version) would be useful to you..

 

[london1971]

Thanks for the replies, especially to SpreadBeta - what a brilliant explanation. Cheers!

 

[TDog]

Some examples for you:

Spread Betting on interest rates - Betting Bible
Spread Betting on Foreign Currency - Betting Bible
Spread Betting on Commodities - Betting Bible