Spread betting at FXCM

[Jack Hughes]

Here's a list of the indices available, along with the corresponding futures contract:

The indices are located on the CFD account. It will be a couple of months before they are added to the spread betting accounts.

OK, but the spreads look a bit wide, as gle said. Will the SB version be more competitive?

 

[Jason Rogers]

OK, but the spreads look a bit wide, as gle said. Will the SB version be more competitive?

I was able to compare the indices against some of our competitors and agree that the spreads are a bit wider in comparison. This is great feedback and will relay it to our management. I would imagine this is due to the initial release, but will check on it. Also keep in mind that there are no re-quotes so the price you are clicking on is the actual price that is being made available.

 

[cfor]

Jason,

I have a standard account with you, and am thinking about transferring it to spread betting to save on tax. But, I'd like to repeat an earlier question that went unanswered. If spread betting is exactly the same as the standard accounts, differing only in its tax implications, could you tell me how it manages to do so? I.e. what distinguishes spread betting from normal trading apart from it's name?

Many thanks,

Cfor

 

[Jason Rogers]

Jason,

I have a standard account with you, and am thinking about transferring it to spread betting to save on tax. But, I'd like to repeat an earlier question that went unanswered. If spread betting is exactly the same as the standard accounts, differing only in its tax implications, could you tell me how it manages to do so? I.e. what distinguishes spread betting from normal trading apart from it's name?

Many thanks,

Cfor

Hi Cfor,

I'm not sure I completely get your question.

Each account type has it's own trading agreement that outlines what type of account you are operating. The spread betting account is a different application and trading agreement from the regular rolling spot forex account. It's legally a different account type recognized as a "spread betting" account by UK revenue authority and the trading agreement for the spread betting account is what distinguishes it. Your spread betting account number will be different than your regular standard rolling spot forex account number.

Please let me know if that helps.

Jason

 

[neil]

Jason

Have you checked your private messages?

 

[cfor]

Hi Cfor,

I'm not sure I completely get your question.

Each account type has it's own trading agreement that outlines what type of account you are operating. The spread betting account is a different application and trading agreement from the regular rolling spot forex account. It's legally a different account type recognized as a "spread betting" account by UK revenue authority and the trading agreement for the spread betting account is what distinguishes it. Your spread betting account number will be different than your regular standard rolling spot forex account number.

Please let me know if that helps.


Jason

Hi Jason,

Thanks for the reply. I have read the agreement and I understand that it's called a 'spread betting' account rather than a spot account and that I'll get a different account number, but that seems quite superficial. The crux of my question was exactly how it differs in terms of the execution of trades. Most spread betting firms use customer's bets to offset each other, and when I put this to the FXCM sales rep he informed me that this was not the case with the FXCM spread betting platform, and that you use interbank rates to conduct an actual transaction. This indicates that the FXCM spread betting platform is not actually operating as a spread betting platform (i.e. mirroring the market) but is doing exactly the same thing as spot account. As I said I have read the terms and no where does it describe how the trades are facilitated. Other spreaders, such as IG for example, do describe it clearly and in detail. It would really help me if you could explain simply how the trades are executed, and how they differ from the spot account, as they can't be the same.

Kind regards,

Cfor

 

[GumRai]

Hi Cfor,

I'm not sure I completely get your question.

Each account type has it's own trading agreement that outlines what type of account you are operating. The spread betting account is a different application and trading agreement from the regular rolling spot forex account. It's legally a different account type recognized as a "spread betting" account by UK revenue authority and the trading agreement for the spread betting account is what distinguishes it. Your spread betting account number will be different than your regular standard rolling spot forex account number.

Please let me know if that helps.

Jason

I have a spread betting account with one marketmaker and CFD account with another. The only differences that I can see is that the spread is higher with the spreadbetting account (not conclusive because different marketmaker) and what I find most important....
The spreadbetting account bases the bet on Pounds per point/pip
The CFD account bases the trade on lots.

I prefer the spreadbetting method of Pounds per pip as it makes your risk management much easier to calculate

Is it the same with FXCM?

 

[Jason Rogers]

I have a spread betting account with one marketmaker and CFD account with another. The only differences that I can see is that the spread is higher with the spreadbetting account (not conclusive because different marketmaker) and what I find most important....
The spreadbetting account bases the bet on Pounds per point/pip
The CFD account bases the trade on lots.

I prefer the spreadbetting method of Pounds per pip as it makes your risk management much easier to calculate

Is it the same with FXCM?

Hi GumRai,

The spreads for forex on the CFD account and spread bet accounts are the same. The spread bet accounts don't have the CFD products yet (such as stock indices, gold, silver, and oil), but we will be adding them to the spread bet accounts. Time frame is about 6-8 weeks last I heard.

Both accounts are traded in lots rather than pounds per point. For example, trading a mini lot of 10k GBP/USD would equate to a pip value of about 60 pence per point.

 

[cfor]

Hi Jason,

Sorry to be a pain - I have no doubt you're looking into this, but please don't forget about my question!

Cfor

Hi Jason,

Thanks for the reply. I have read the agreement and I understand that it's called a 'spread betting' account rather than a spot account and that I'll get a different account number, but that seems quite superficial. The crux of my question was exactly how it differs in terms of the execution of trades. Most spread betting firms use customer's bets to offset each other, and when I put this to the FXCM sales rep he informed me that this was not the case with the FXCM spread betting platform, and that you use interbank rates to conduct an actual transaction. This indicates that the FXCM spread betting platform is not actually operating as a spread betting platform (i.e. mirroring the market) but is doing exactly the same thing as spot account. As I said I have read the terms and no where does it describe how the trades are facilitated. Other spreaders, such as IG for example, do describe it clearly and in detail. It would really help me if you could explain simply how the trades are executed, and how they differ from the spot account, as they can't be the same.

Kind regards,

Cfor

 

[Jason Rogers]

Hi Jason,

Thanks for the reply. I have read the agreement and I understand that it's called a 'spread betting' account rather than a spot account and that I'll get a different account number, but that seems quite superficial. The crux of my question was exactly how it differs in terms of the execution of trades. Most spread betting firms use customer's bets to offset each other, and when I put this to the FXCM sales rep he informed me that this was not the case with the FXCM spread betting platform, and that you use interbank rates to conduct an actual transaction. This indicates that the FXCM spread betting platform is not actually operating as a spread betting platform (i.e. mirroring the market) but is doing exactly the same thing as spot account. As I said I have read the terms and no where does it describe how the trades are facilitated. Other spreaders, such as IG for example, do describe it clearly and in detail. It would really help me if you could explain simply how the trades are executed, and how they differ from the spot account, as they can't be the same.

Kind regards,

Cfor

Hi Cfor, No worries and sorry that I missed your post. Thanks for reminding me about your question.

The spread bet accounts use No Dealing Desk execution (meaning no re-quotes) which is the same execution as the regular spot accounts. Here's where it is discussed on the webpage: Learn about Forex Spread Betting at FXCM (screenshot of page below)

Most spread betting firms simply mirror where the market is trading and take the other side of your position instead of offsetting exposure in the interbank market. On both the spread bet accounts and the spot forex account, each transaction is offset back to back with a global bank. Therefore there are no re-quotes and you trade directly on bank provided pricing, rather than pricing set by the broker.

-Jason

 

[cfor]

Thanks very much for this Jason

 

[alex2006]

The spot FX part has Active Trader account. Does Spreadbetting on FXCM have Active Trader type account?

 

[Jason Rogers]

The spot FX part has Active Trader account. Does Spreadbetting on FXCM have Active Trader type account?

Hi Alex,

Yes, the spread betting account is also eligible for Active Trader spreads. The active trader team can go over all the details on how to get it setup if you already have a live account. (Note: All spread bet accounts are traded through the FX Trading Station II, including those setup with active trader spreads.)

Jason

 

[montmorencyt2w]

Jason,

What does "Never Pay Debit Balance as a result of trading" mean?

Thanks,

 

[Jason Rogers]

Jason,

What does "Never Pay Debit Balance as a result of trading" mean?

Thanks,

Hi Mike,

This means you will not lose more than what you deposit in your account.

If the trade goes tragically wrong, you will not end up owing money to FXCM. This is important because with leverage you have the ability to trade a much larger position than what you have in your account. The margin call feature monitors the available margin in your account in real time. If you run out of available margin due to losses on the trade, all positions are closed immediately.

-Jason

 

[Black Swan]

Jason,

What does "Never Pay Debit Balance as a result of trading" mean?

Thanks,

Mike, I'm working towards moving to active trader status with FXCM. Hugely impressive set up. Jason's doing a top job of repping them on 'ere.

 

[montmorencyt2w]

Mike, I'm working towards moving to active trader status with FXCM. Hugely impressive set up. Jason's doing a top job of repping them on 'ere.

You're in a bigger league than me I think Black Swan
Is the "basic" account with them where you have to deposit £2,500 or something?

That thing about never losing more than you deposit in your account sounds good at one level, but if it's implemented the same way that Cityindex seem to do it, then it can still bite you (see other thread). In spite of knowing the dangers, I have just been bitten by this....pushed my limit inadvertently and had _all_ my trades closed. The loss could have been worse, but it still hurt. (Why not only close enough trades to get back within the limit? hm...). What (I think) would be ideal would be free guaranteed stops, which one SB firm offers or used to offer (must check if it is still the case). Swings and roundabouts, no doubt.

My recent experience does rather underline the dangers of trading with a small account. I knew the dangers and pushed my luck, so it was my own fault, but it has pushed me more towards the "you need at least £nk to trade with", where "n" is perhaps at least a bit bigger than I thought it might be

Still FXCM do sound good.


"Smile though your account is bleeding ...."

 

[Jack Hughes]

While I generally don't have a particularly high regard for SB companies)!), in this case I can't see the problem. If you run out of margin it makes sense for all concerned to liquidate a position. If they allowed clients to go further and further into the red, there'd be far more complaints.

 

[Black Swan]

You're in a bigger league than me I think Black Swan
Is the "basic" account with them where you have to deposit £2,500 or something?

That thing about never losing more than you deposit in your account sounds good at one level, but if it's implemented the same way that Cityindex seem to do it, then it can still bite you (see other thread). In spite of knowing the dangers, I have just been bitten by this....pushed my limit inadvertently and had _all_ my trades closed. The loss could have been worse, but it still hurt. (Why not only close enough trades to get back within the limit? hm...). What (I think) would be ideal would be free guaranteed stops, which one SB firm offers or used to offer (must check if it is still the case). Swings and roundabouts, no doubt.

My recent experience does rather underline the dangers of trading with a small account. I knew the dangers and pushed my luck, so it was my own fault, but it has pushed me more towards the "you need at least £nk to trade with", where "n" is perhaps at least a bit bigger than I thought it might be

Still FXCM do sound good.


"Smile though your account is bleeding ...."

Sorry to hear about that, I only ever trade with stops, the only time I wouldn't would be on v. short TFs - 3-5mins, when I'd manually stop it anyhow. I know folk reckon your throwing away 2-3 pips with G Stops but I disagree...

Here's an active trader link, they require $25K or £25K...go figure...FXCM Active TraderI'm salivating at the prospect of 1 pip spread on cable and 0.8 on EURO/USD...

here's a link to their various accounts, if you're going to 'start over' IMHO you could not possibly do better...
Open a Forex Trading Account | FXCM Currency Trading Account

 

[Jason Rogers]

You're in a bigger league than me I think Black Swan
Is the "basic" account with them where you have to deposit £2,500 or something?

That thing about never losing more than you deposit in your account sounds good at one level, but if it's implemented the same way that Cityindex seem to do it, then it can still bite you (see other thread). In spite of knowing the dangers, I have just been bitten by this....pushed my limit inadvertently and had _all_ my trades closed. The loss could have been worse, but it still hurt. (Why not only close enough trades to get back within the limit? hm...). What (I think) would be ideal would be free guaranteed stops, which one SB firm offers or used to offer (must check if it is still the case). Swings and roundabouts, no doubt.

My recent experience does rather underline the dangers of trading with a small account. I knew the dangers and pushed my luck, so it was my own fault, but it has pushed me more towards the "you need at least £nk to trade with", where "n" is perhaps at least a bit bigger than I thought it might be

Still FXCM do sound good.


"Smile though your account is bleeding ...."

Hi Mike,

In the regular spread betting account, the minimum is £300. BUT, it's very important to keep in mind that trading a leveraged position in a £300 account doesn't give you a lot of room for error if the trade goes against you or if you want to open multiple positions.

Jason