Argue against my point please then we can discuss it.
This sounds like one of those "my broker stop hunted me and me in particular instead of all the other traders wah wah wah wah wah " posts.
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Argue against my point please then we can discuss it.
This sounds like one of those "my broker stop hunted me and me in particular instead of all the other traders wah wah wah wah wah " posts.
Your argument makes no sense.
Key to this is: the more trades a trader makes, the more money the SB company makes off the spread.
Short term trader trading EURUSD 4pip spread. 10 trades per week = 40pips to SB company.
Long term/swing trader 1 trade per week = 4 pips to SB company plus some small financing charges every night.
Therefore they prefer short term traders. Argue against that and I will believe you but you have not made a valid point so far.
SanMiguel, in my experience my order has only ever been sent on to a dealer if I'm trading a very low volume market or very low priced stock (I like to buy a couple of cheapies/dogs on the quarterley contract every now and then).
Also, if a low priced company has recently offered a rights issue this seems to be something the SB sometimes prefers to 'refer' to dealer - again if there is very little interest among their customers I presume.
I challenge the above poster to provide an example of referral to a dealer on a high volume contract though. That would make no sense because the SB would then be 'giving away' business. Of course the SB companies are in it for the money! Why criticise them for that? It's just healthy capitalism! But I don't agree that they are dishonest or make their money in an insidious way.
As for the selection or 'favourtism' among clients that seems to have been suggested - well I don't really care about that. If they do give slightly better execution (or bandwidth) to clients with larger positions I don't see the harm. Most businesses will do that. After all would you keep a client buying thousands waiting while dealing with a customer buying pennies? I'm not saying it's right and like I said I doubt they 'shut' anybody out anyway. On the other hand, it could simply be the first come first served principal and you're waiting your turn. Don't forget seemingly unrelated issues like technical latency as well - what seems a deliberate intervention on the part of the SBs when executing an order could be nothing more than server issues or even your RAM/cache.
Also, this is trading! There are only so many people who will be filled at a certain price before it moves - buyers to sellers (supply/demand), etc. It's part of the risk you take. It's a market, not an exact science or exact arithmetic. 2+2 does not always equal 4.
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With high volume contract, I suppose you are referring to futures like ES and YM. There is no need to provide any examples on the existence of intervention by a dealer. This forum is full of cases when traders being on referral to a dealer when trading SB. This is nothing new and widely spread among SB companies. Even the SB representatives themselves admits this is being practiced on a broad basis. Being fairly new on the forum I guess you might not yet come across these statement.
A casino is also in it for the money, but they don't rig their tables, if they do, they will immediately lose their license. You cannot refer to moneymaking and "healthy capitalism" to justify foul play. There are regulations in place, and these should not be side stepped in order to limit some traders success. I have often on this forum been accused for being pro SB, for reasons that I in many cases take the SB point of view. Yes there are traders that blame SB for everything, but their is also many cases when SB is playing an unfair game.
I think your referral to a dealer may have something to do with you being a foreign customer. Are you based in Sweden trading with a UK SB company? The reason I say this is because I have family based abroad and we both have an account with one SB. Their margin requirements are different to mine and I'm not sure if their order execution is the same, to be honest. I never thought to ask them that. But I will now. Do you think this may the reason? On the other hand, maybe it's because you place very large stakes that need 'approval' from a dealer? Again, perhaps they are required by law to do this for an overseas customer? I don't know...
p.s. If I felt uncomfortable or felt I couldn't trust a provider of any service, I simply wouldn't have anything more to do with them. The SB companies with whom I have accounts have all satisfied my apprehensions in this regard. To think that they might be 'working against me' would not be conducive to any trading activity of mine and I would like I said, simply have nothing to do with them.
p.p.s I might be fairly new to the forum, but I trade with SBs everyday. Posting on a forum doesn't mean anything.
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No, it has nothing to do with me being a foreigner. I have had many SB accounts with different SB over the years. As I have said many times before, overall, trading with SB are Ok. But there are things to be aware of and watch out for. This in order to have a good security backup in your own trading setup.
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foredog
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A casino is also in it for the money, but they don't rig their tables, if they do, they will immediately lose their license. You cannot refer to moneymaking and "healthy capitalism" to justify foul play. There are regulations in place, and these should not be side stepped in order to limit some traders success. I have often on this forum been accused for being pro SB, for reasons that I in many cases take the SB point of view. Yes there are traders that blame SB for everything, but their is also many cases when SB is playing an unfair game.[/QUOTE]
The casino has 0 on the roulette wheel so when most people bet black or red they still win both sides sometimes and over time that small edge brings big returns
The casino has 0 on the roulette wheel so when most people bet black or red they still win both sides sometimes and over time that small edge brings big returns
And of course, if you lose that's easy money for the SBs (because they have your money already) whereas if you win they have to pay you or go find the money/hedge against your winning position in the market (which is more work for them). I have brought this up with them before and they do try to side step the answer, I'll admit. But what they do say is that it's not in their interest for anyone to lose because if you kept losing they would eventually lose you as a customer. So they remain unbiased and make their money from the spread. I guess you either have to believe what they say and trade with them, or disbelieve them and not trade with them. It's just your choice.
I think they operate pretty much like a MM who makes money from 'commissions' but who won't try to make money front running his clients (although some tried in the past until a law came in to stop it). But there's no law against a MM making money for himself on the back of his customers orders, is there?
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I am not sure I understand your post correctly. The casino roulette table has a 0 (like the spread) and sometime two zeros. I agree, eventually the roulette table will take its toll on the player, as the odds are against you. The mathematical statistics will claim its right in the end. The same applies for trading SB, most traders will lose out in the end. There are a few that will get a slim edge, which will result in they being on the winning side.
What I don't understand is what financial trading has to do with casino roulette tables. I don't think of myself as a gambler and don't know anything about it. But it looks to me like there are a lot of red and black blocks on a wheel and you place money on the chance of a little plastic thingy (is it a dice or a ball?) landing in one of those blocks - how many are there? What are the odds?
On the other hand, a stock price goes up, down or sideways. So only really two options there. Yes, you can gamble blindly on a 50/50 win, or you can reason on a calculated risk. Speculative trading should be a calculated risk (like most things in business, especially a start up) and not a blind gamble. But no business should be a 50/50 gamble. Hell, who goes into business on those odds? Who does ANYTHING on those odds. Not even a bungy jumper will entertain odds like that. There's a risk in everything in life - even driving your car to the supermarket carries some risk but it's minimal which is why you still do it. But if it was 50/50 would you take such a risk with your life just to buy a pint of milk? Of course, blindfolding a 10 year old who has no idea how to drive and throwing him the keys is probably not going to end well. It doesn't take a rocket scientist to figure that out.
I agree that most gamblers will lose - at games or in business. Calculated risk has different odds and it's all about improving your odds for success is it not? I don't think gambling offers you that possibility and I don't see the similarity.
EDIT: unless you can sit at that roulette table with a pot of black ink and start colouring in the squares!
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Phil Mibbutz
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Hint: it's called spreadBETTING. As the account opening T&Cs make clear, you're trading something created by them, not the underlying market.
Phil Mibbutz
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Nothing to do with it. Assuming you're in the UK, try doing things the other way round by opening an account with VDM, which is based in Sweden, then check out that company's record on other T2W threads.
Yes, you're trading their prices but they are based on the underlying market. They don't just make them up as they go along. That would be a racket and would be shut down sooner or later. It would be like me saying to you "bet on my price for oil which is £50 a barrell! I mean £45.. er no I mean £80. Just kidding it's £35 but only to you and until you try to buy it in which case it was £60!" - ridiculous.
The reason it's called betting is because there is no purchase of equity or contract - you are betting on the direction only. (EDIT: that's also why it's still tax free.) Funny enough, it's a term used in the stock market as well even when you are buying equity or a contract that has tangible value. You often hear of 'betting' on the price direction in the markets. Having said that Barclays Stockbrokers call it FST (financial spread trading) and others are starting to use the term 'trading' when referring to financial spreads as opposed to sports spreads (which is also spreadbetting EDIT: but where the purpose is not to trade the spread/instrument, but rather bet on the outcome of the game/event).
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The roulette table were just an example representing the gambling industry. The similarity is all about odds of course, you start out by being minus on the position and have to be right on the final direction of the position. This in order to become even and eventually have a profit. The financial official authorities regards financial SB being a gambling activity, and thus not taxable. However, I think this is about to change in the years to come. If so, stricter regulation and taxation will for sure follow in its path. Not many on this forum believe this will be the case. I am on the other hand think, this will eventually be something that could, very well be a reality in the years to come. About the similarities in gambling and trading. I don't think many gamblers agrees with your definition on gambling. They feel very much they can affect the outcome of the odds, by adding their own parameters into the game. There are a lot of trading activity going on in the sports betting industry (e.g. trading live Football odds at Betfair).What I don't understand is what financial trading has to do with casino roulette tables. I don't think of myself as a gambler and don't know anything about it. But it looks to me like there are a lot of red and black blocks on a wheel and you place money on the chance of a little plastic thingy (is it a dice or a ball?) landing in one of those blocks - how many are there? What are the odds?
On the other hand, a stock price goes up, down or sideways. So only really two options there. Yes, you can gamble blindly on a 50/50 win, or you can reason on a calculated risk. Speculative trading should be a calculated risk (like most things in business, especially a start up) and not a blind gamble. But no business should be a 50/50 gamble. Hell, who goes into business on those odds? Who does ANYTHING on those odds. Not even a bungy jumper will entertain odds like that. There's a risk in everything in life - even driving your car to the supermarket carries some risk but it's minimal which is why you still do it. But if it was 50/50 would you take such a risk with your life just to buy a pint of milk? Of course, blindfolding a 10 year old who has no idea how to drive and throwing him the keys is probably not going to end well. It doesn't take a rocket scientist to figure that out.
I agree that most gamblers will lose - at games or in business. Calculated risk has different odds and it's all about improving your odds for success is it not? I don't think gambling offers you that possibility and I don't see the similarity.
EDIT: unless you can sit at that roulette table with a pot of black ink and start colouring in the squares!
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The outcome would have been the same if VDM were located in UK. This except for rare cases of network latency, that would have been to your advantage being located in the UK.
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Just been reading up on roulette on the Internet - I can see why it's appealing for people and how strategies can be created in much the same way as stock trading strategies. I guess it depends how you view it. I mean, if you look at stock trading purely as a numbers game, does that mean you're gambling? And then on the other hand, if you are a gambler with a good trading strategy that increases your odds or winnings, then are you really gambling or are you perhaps speculating or simply 'working'? Guess it's got to do with PROBABILITY - the more this is against you, the more you're gambling, at the roulette wheel or in the stock market.
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WTF does roulette have to do with this - lol
You guys are arguing against spread betting not realising you are creating exactly the same argument against any company that uses spreads...including all the spot forex companies. SB is just a financial product like any of the spread products.
Trading is not gambling, you are buying and selling money. The odds are not stacked against you, if you are losing you are a bad trader, it would be like buying a can of coke for $1 and selling it to someone for $0.80.
WTF does roulette have to do with this - lol
You guys are arguing against spread betting not realising you are creating exactly the same argument against any company that uses spreads...including all the spot forex companies. SB is just a financial product like any of the spread products.
Trading is not gambling, you are buying and selling money. The odds are not stacked against you, if you are losing you are a bad trader, it would be like buying a can of coke for $1 and selling it to someone for $0.80.
Yeah, I totally agree but I said the same kind of thing earlier in the thread as well. Subject of roulette came up earlier and it was actually interesting to learn (Wikipedia) that you can also apply strategies to gambling based on numbers. Not for me, though.
Yes, many traders look down at gamblers, believing they are so much better making money.WTF does roulette have to do with this - lol
You guys are arguing against spread betting not realising you are creating exactly the same argument against any company that uses spreads...including all the spot forex companies. SB is just a financial product like any of the spread products.
Trading is not gambling, you are buying and selling money. The odds are not stacked against you, if you are losing you are a bad trader, it would be like buying a can of coke for $1 and selling it to someone for $0.80.
At the moment you buy the position it is not worth anymore than what you paid for it (minus the spread). You start out by being in the red by paying the spread, do you agree? If you pay a price to get into a position you have the odds against you at the moment of entry. If you are an excellent trader you can by foreseeing the direction of the market, eventually end up with green figures. The same applies for many gamblers as well. However I agree, Roulette though, might not be the best example of this, as you in fact cannot do anything to increase the odds. Still, the same fundamentals apply, you have the odds against you as the zero might be hit . SB is by definition at the moment not categorized as an financial instrument (otherwise it would have been taxed). However, as said before, there are some indications that this could very well be the case in the future. CFDs are categorized as an financial instrument, and rightly so being taxable.
There you have it.
