when u say D4F base their stop on the future + the spread, what instrument r u referring to & is this on a 'cash'bet on the index , or the 'quarterly' contract bet. ??
Just random, although I have traded EurUsd very occasionally
when I think it is trending.
mmillar said: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.
Just my humble opinion.
delboy trotter said: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?
sidinuk said:MMillar is right.
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.