Spread Betting Contracts

[b3nspencer]

Hi,

The March 2010 for SSE.

@ City Index: Bid = 1079.00 Ask 1089.00
@ Ig Index: Bid = 1060.00 Ask 1070.00

Why such a big difference? Don't they get their prices from the same place?

Thanks,
Ben.

 

[Hoggums]

Sounds like a perfect arbitrage opportunity.

 

[Weighbridge]

Do the two SB companies treat dividend adjustments in the same way? Could be quite substantial for a utility company.

I believe IG recently stopped factoring the expected dividend into their futures pricing - instead they post an adjustment after the share goes ex-div.

 

[tan5ki]

Do the two SB companies treat dividend adjustments in the same way? Could be quite substantial for a utility company.

I believe IG recently stopped factoring the expected dividend into their futures pricing - instead they post an adjustment after the share goes ex-div.

But dividends should reduce the value of the contract so that would only make sense if IG's price was the higher of the two.

Looks like it may have been an issue with pricing as I've just seen that City Index are now quoting 1068.72/1078.31. I cannot log into my IG account for some reason at the mo but it seems about right.

 

[b3nspencer]

But dividends should reduce the value of the contract so that would only make sense if IG's price was the higher of the two.

Looks like it may have been an issue with pricing as I've just seen that City Index are now quoting 1068.72/1078.31. I cannot log into my IG account for some reason at the mo but it seems about right.

Sorry, the prices are the wrong way around. IG should be shown as the higher one.

 

[Umbrella]

occassionally sb firms have pricefeed latency. if this happens the 'arb' trades may be voided. i remember reading something like this in IG's customer agreement.