I have an account with City Index and an account with Finspreads .. The spreads on Finspreads are mile better than City Index .. Is this true for anyone else .. if so, why does anyone have an account with City Index?
What are the spread prices for Finspreads?
I like CityIndex as the price you pay for the trades are what you see on the screen.. with some of the others (not sure about Finspreads), you are continually requoted. I know this happens with D4F.
I have found that for index trading Finspreads seem to base their stops on the actual cash price. Deal4free base them on the futures price plus their spread. That makes using stops using Deal4free very frustrating and makes their spread seem a lot larger than Finspreads.
If you make a profit with Deal4free, the small spread is an advantage but there is a chance that Deal4free will hit your stop when Finspreads will keep you in the trade. This can save a lot of money and I think it is more important than a small spread.
But all of the spread bet companies have their faults and Finspreads online trading platform is unavailable far too often.
With Finspreads when you "hit" a price infacy you have to get a quote .. often the same as the screen price uless market is fast trading. With City Index when you "hit" a price the deal still has to be confirmed by them, so really not much difference, apart from the spread. For example Oct Gold is 1.0 spread on city and 0.8 on Fin, Sep Nikkei is 60 in City and 20 on Fin, Sep EurUsd in 0.0018 on City and 0.0012 on Fin and finally Oct FTSE is 10 on City and 8 on Fin .... Infact, I have not yet found any where City are closer than Fin !!!
I am going by what I have read here and on other boards. The general consensus seems to be that Deal4free base their quotes on future prices and their spread moves around them. There is also talk of spread bet bias but I don't know if this exists. I was referring to the rolling cash bets. I find it impossible to use a stop with a short term trade when their quote darts around so much.
I don't trade the FTSE, only the Dow & the S&P. From what I have read, the spreadbet quotes follow the furures. Here are some quotes.
I don't know why I'm always defending the Spreadbet companies but here goes again...
I think the idea of spreadbet companies quoting prices 20 points out of the market is just plain silly. If they did I (and plenty of others) would be arbitraging them to death. It would be easy, risk free money.
I took an S&P futures feed from the US a while ago to see if all this talk of them changing prices were true. The S&P futures feed and D4F's S&P price were EXACTLY THE SAME, tick for tick.
I believe all this is just down to a lack of understanding of what you are trading when you spreadbet (ie. there isn't really a 'cash' price, just a futures price + x) and the usual 'blame the broker' syndrome.
Have to agree with mmillar on this one. In my experience using a real time feed of S&P Futures (ES H3) from eSignal and compare this to D4F Dow30 Cash. It is identical tick for tick. Only today, there was a situation where the difference in the D4F price and the actual Dow 30 cash price ($INDU), had a so called "bias" of almost 20 points. This is a fairly common situation. My question is this. Do all the SB firms use the S&P Futures to set their prices or are there some who use the Dow cash instead?
I think the problem that people are having is that they are comparing the cash index to the SB quotes. The SB quotes are based on the relevant underlying futures market not the cash market. Futures move quicker than the cash index (it takes time for the cash market to catch up, as the underlying shares that make it up have to trade to move the index). The futures prices will always move a little further in any direction than the underlying index because it will have more momentum.
I have looked at the differences between D4F, cash index and futures prices for the S&P500. Between D4F and the index you will lose around 1 pt per contract, but between D4F and the near ES contract the difference over a contract is only .25 points. Now D4F quote a spread of .5 pts and the ES is .25 pts, so there's the difference. D4F and the futures move exactly together, the only difference is a wider spread. Other SB companies use considerably larger spreads and aren't worth using at all because of that.
You need to offset the bigger spread with the SB's against the tax benefits. Anymore than 1 or 2 trades a day and that tax benefit won't be big enough to pay for the increased spread.