ProSpreads, Spread Vs DMA conflict?

[2be]

I have been reading the threads, to me each way it does not bother me if they hedge dont hedge, i am happy paying or selling at what level i want to. With any other SB company you would not get a service like ProSpreads.

Partly I do agree with you on hedging, but hedging your trades by any intermeadiary is not DMA, since some important questions.
Unles one uses them for scalping, one is not able to trade, as the opening hours coveres just above half of the forex 24h market. Using orders, OCO, SL or trailing stops is out of question for a position trading. Pls remember that scalping is one of the fastest way to loose your account, even if they hedge it by the interpool of other sucker traders doing the same. If that is the case, which I hope it is not, pro will have many small accounts, and tradrers blowing them with increadible punctuality. Who knows, that could be the reason for not being able to afford 24hr stuff, or it might be a deliberate design?
For the few that have masterred scalping, this "internal" hedging without a doubt is slowing execution, which in turn leads to frustration.
I wish you good trading with pro, for me however unles there is 24 hrs trading involved I cannot get serious about them. A few grand is ok, but anything more I would count as self inflicted risk with poss little reward/s.

 

[2be]

very quiet on the prospreads thread, I understand we all are waiting for the 24hrs trading

 

[Jack Hughes]

very quiet on the prospreads thread, I understand we all are waiting for the 24hrs trading

Or it could be that most of us have no plans to use them, now we know they're like all the other SBs?

 

[riogordo]

Mr Hughes

As dashing blade pointed out you seem to have it in for PS. Maybe you have lost money with them or maybe you work for another SB or maybe you have nothing better to do?

 

[Jack Hughes]

Mr Hughes

As dashing blade pointed out you seem to have it in for PS. Maybe you have lost money with them or maybe you work for another SB or maybe you have nothing better to do?

Answers: No. No. Possibly.

My post seemed like a reasonable response to the previous one, but sorry for wasting your time. I won't comment again.

btw, Do you work for PS?

 

[riogordo]

No, But I have an account with them and also IG & Finspreads and all have there pros & cons.
But as stated before I don't really care if any of them take the other side of my trade as long as I am getting the market price.

 

[2be]

No, But I have an account with them and also IG & Finspreads and all have there pros & cons.
But as stated before I don't really care if any of them take the other side of my trade as long as I am getting the market price.

What is "market price"? I think there are basic questions to be addressed.

The first question is ontological in nature, and is concern with what Pro is.
Is Pro a DMA platform? Is Pro a Market Maker? Inherently there is nothing wrong with either of them, but to claim that they are DMA platform and then being found that that might not be the case is deception.
DMA platform does not know internal hedging, so strictly speaking if they use internal hedging, Pro is not DMA (wider market price), and there is a possibility of them being Market Maker, so the price displayed is this market maker's price and not DMA price, though the difference should not be that large anyway.
Market Makers might lower the spread, and take their earnings in many other ways, as they need earnings to cover the cost of their opperation, and nobody would deny them this.
This is the matter of principles, and clearly exibited principles bring clarity. So no wander some traders have questions and doubts as what this platform IS, even before one looks to "what they offer".

The second question is related to functionality. How does it function and does it funcion (work) well for me or not.
Many MM (Market Makers) function well, and I see no reason that Pro if they are MM should not provide a good service. The lack of 24 hrs trading is very limiting, but if one chooses to trade with PRO one can live with it.


My concern is with using any MM as a source of data for volume or level2, as the MM will only display the data in relation to their platform's activity, and not data related to the wider market. That is even more important if one is using market's statistics as part of the trading strategy.

I am not undermining Pro at all, I am trying to provide a shelf to place them in the overall trading store, and I hope that many traders myself included will have a good trading experience with them.

 

[A Dashing Blade]

What is "market price"? I think there are basic questions to be addressed.

If you are spread betting an exchange traded future with them then the market price is the price currently trading on the exchange.

 

[A Dashing Blade]

. . .
The lack of 24 hrs trading is very limiting, but if one chooses to trade with PRO one can live with it.

My concern is with using any MM as a source of data for volume or level2, as the MM will only display the data in relation to their platform's activity, and not data related to the wider market. . . .

These issues are only relevant if you're trading fx through them.

 

[2be]

I shall have a break from posting on this subject, for me it is clear, DMA cannot be a MM. There are obviuos implications, though for some they might be irrelevant to the actual trading.
I am not agaist Pro at all, and wish them and other traders using them great sucess, if it is possible for both of the involved entities to be sucsessful at the same time.
The title of this thread points out the dilema, and Pro has not given a clear answer regarding this very apparent conflict.
Since it is illogical to wish both parties many good trades ( a bit like wishing two opposing gladiators to win), I wish you good health instead, probably much more important.
2be

 

[littleluca]

I am confused to what most of you are actually talking about!

When trading direct with a Currenex broker you pay a commission. It isn't spreadbetting.

What seems obvious to me is that ProSpreads are incorporating the spread from Currenex and adding the commision in the form of a larger spread thus keeping it within Spreadbetting... They are not a MM if they are using Currenex...
I can't believe ppl need a clear answer... do the research ppl. Currenex offer direct access to the "market". You pay a commission for this. ProSpreads hide the commission in spread thus meaning that it can be kept in spreadbetting guise.

 

[Jack Hughes]

I am confused to what most of you are actually talking about!

When trading direct with a Currenex broker you pay a commission. It isn't spreadbetting.

What seems obvious to me is that ProSpreads are incorporating the spread from Currenex and adding the commision in the form of a larger spread thus keeping it within Spreadbetting... They are not a MM if they are using Currenex...
I can't believe ppl need a clear answer... do the research ppl. Currenex offer direct access to the "market". You pay a commission for this. ProSpreads hide the commission in spread thus meaning that it can be kept in spreadbetting guise.

Sorry, it's not obvious to me. I think Prospreads has only recently started with FX. Does Currenex offer direct access to index futures, which was what we were talking about?

 

[Dommo]

I am confused to what most of you are actually talking about!

When trading direct with a Currenex broker you pay a commission. It isn't spreadbetting.

What seems obvious to me is that ProSpreads are incorporating the spread from Currenex and adding the commision in the form of a larger spread thus keeping it within Spreadbetting... They are not a MM if they are using Currenex...
I can't believe ppl need a clear answer... do the research ppl. Currenex offer direct access to the "market". You pay a commission for this. ProSpreads hide the commission in spread thus meaning that it can be kept in spreadbetting guise.

I understand that Prospreads offers spread betting services. Tonight, Prospreads.com homepage states "Financial Spread Betting for Professionals".

Contributor Prospreads said this at post #52 of this thread:

"We auto hedge a lot of our client trades and strategically hedge the other trades. We always replicate the price and liquidity of the underlying markets, so the DMA functionality is available for all client orders, therefore the trading experience is never compromised."

From this quote, it is anything but clear that Prospreads are offering direct access and simply hedging client trades into exchanges. It suggests that Prospreads is, at times making its own market. I don't say that is necessarily a bad thing, but if true it differs from this interview with the founder of ProSpreads.

http://www.financial-spread-betting.com/Futures-betting.html

I quote:

"ProSpreads directly references the underlying futures price and hedges every bet taken out by its clients. This means that the client will never get requoted, because if the price in the underlying futures market is available to ProSpreads for hedging, the spreadbet price is available to clients."

That statement gives comfort to a lot of potential clients, hence this thread, and hence the confusion.

Respectfully, contributor Prospreads has not, as yet clarified this confusion.

 

[littleluca]

Read what currenex is then you will understand.....
Honestly if you haven't heard of currenex I would say away from forex. Its like wanting to trade stocks and asking what the Ftse100 is....

Because Currenex allows your requirement direct from the market then they do not charge a spread. They charge a commission for the order. Because charging a commission wouldn't be spread betting it would be trading, ProSpreads add the commission in a form of spread so it is still spread betting... honestly I do not see how they are making money on it their prices are extremely competitive....

 

[Dommo]

Read what currenex is then you will understand.....
Honestly if you haven't heard of currenex I would say away from forex. Its like wanting to trade stocks and asking what the Ftse100 is....

Because Currenex allows your requirement direct from the market then they do not charge a spread. They charge a commission for the order. Because charging a commission wouldn't be spread betting it would be trading, ProSpreads add the commission in a form of spread so it is still spread betting... honestly I do not see how they are making money on it their prices are extremely competitive....

Thanks, but reading about currenex will not shed any light for me. I don't trade FX.

My question is simple - when I place my FTSE future spread bet with prospreads, is the corresponding hedge taken out on Euronext? To paraphrase, the answer appears to be: "sometimes". This makes it more difficult to distinguish prospreads from other spread betting firms.

 

[littleluca]

As I read from their Rep. They responded to the Indicies bets with a "YeS". As i understood they haven#t responded to the same question regarding forex.

 

[Dommo]

As I read from their Rep. They responded to the Indicies bets with a "YeS". As i understood they haven#t responded to the same question regarding forex.

Well, the rep said "We auto hedge a lot of our client trades and strategically hedge the other trades".

I asked for clarification of "auto hedge" and "strategic hedge", but haven't heard anything. I don't see how the answer re indices is 'yes'.

This thread is going nowhere.

 

[littleluca]

I agree!! Maybe email them. Either way I believe that they are about as far as you can get away from a MM

 

[Jack Hughes]

All SBs auto hedge in the sense that the longs and shorts tend to balance each other out on each instrument, so it's only their overall position that they (might) need to hedge against the underlying market.

Future Spreads originally stated categorically that all bets were hedged directly in the market, but that doesn't seem to be the case since they turned into ProSpreads.

 

[littleluca]

Maybe they got bigger!!! Originally maybe it made sense.... now maybe they are trading so many contracts they can offset a lot internally... It doesn't matter to me, what matters is where they choose to profit!! Not at my expense! Is my only requirement!