Spreadbetting Companies Want YOU to Lose? Any Thoughts - You Tube Video Link

kalott

Active member
Jul 10, 2004
674
57
38
Sweden
Hi

What a lot of old rubbish.

1. A broker is often a SB or market maker. It can either be the market maker acting as principle to the trades or they can be a liquidity provider to clients as an execution only venue.

2. This point doesn't even make sense. But I think the point you're trying to make is a SB firm can't route toxic business/clients directly to the underlying market - they can, they do, you're wrong.

3. yes they do. yes there is.

4. you have a point here. Any delay in a fill should raise red flags that you're on the SB firms radar.

5. Stop hunting doesn't happen at SB firms. Your rambling about pivot points is nonsense. A stop order is an instruction to the SB firm to deal at the next available price once the order level has been touched. Simple, no hunting, no pivots, no conspiracy.....

6. clueless.

This person knows nothing about how SB firms operate.

Best, HF.
about number 3

do you mean all, like IG ? (A -B books thing)?

"When you open a long position on the trading platform that trade feeds into IG's total global exposure for that asset. We don't run a speculative position on any market, so ideally we'll have a number of clients with contrasting views who will net off against each other. This is important for a number of reasons. First it means that we never have a view of where a market is trading or the direction it is trading in - it is never in our interest for a stop or limit to be hit,"

https://community.ig.com/t5/FX-and-...osition-at-5-30-am-North-Korea-News/m-p/14248
 
Likes: Oscar Reed

highbury fx

Well-known member
Mar 31, 2014
338
114
53
about number 3

do you mean all, like IG ? (A -B books thing)?

"When you open a long position on the trading platform that trade feeds into IG's total global exposure for that asset. We don't run a speculative position on any market, so ideally we'll have a number of clients with contrasting views who will net off against each other. This is important for a number of reasons. First it means that we never have a view of where a market is trading or the direction it is trading in - it is never in our interest for a stop or limit to be hit,"

https://community.ig.com/t5/FX-and-...osition-at-5-30-am-North-Korea-News/m-p/14248
Hi

I don't like commenting on other firms but the post you refer to is in the public domain so i'll try and answer without being overly critical on IG (cos I like them)

I think its important to establish that you were talking to IG about crypto currencies which are different to synthetic contracts priced from the physical market for physical delivery.

But, the reply from the IG rep seems to digress from talking crypto currency to talking about the IG book in general and it is those points he made that make me wonder how on earth their compliance team allowed that post to be published as there are so many things wrong with what he has told you.

1. "they don't run a speculative position because ideally they have a number of clients with contrasting views that net off against each other". Ok, fair enough, that's the theory we all know that but what happens when clients don't net off against each other and there is residual risk? IG don't hedge what fits within their risk parameters so the surplus is a speculative position. It may be a speculative position which is determined by the excess flow from clients not netting but it is still a speculative position.

2. "it is never in our interest for a stop or limit to be hit". Oh please, this is just not true. if for example IG were maximum long EURUSD and someones stop got hit fairly that took IG back to within their limits that would be in their interest. It would mean they are probably locking in a profit and it would also mean they do not need to pay the cost of hedging to bring their risk limits back in to line. Telling you its not in their interests whether a stop is hit or not is patronising. At the very least orders being filled creates more spread income for IG and that is very much in their interests.

3. Him telling you that "when there is overwhelming sentiment and IG's global exposure becomes either max long or max short" he is saying to you that IG run speculative positions to a maximum exposure that they hedge thereafter.

4. He mentions risk levels in his last paragraph, again seeming to contradict paragraph 2 where he tells you IG don't run a speculative position on any market.

finally, in answer to your question... IG 100% know who their winning clients are and who the clients are who deal in sizes likely to breach their internal limits - those people are hedged as they deal, the rest of their clients go in to their B book where speculative risk is managed by their dealing teams.

I have no beef with IG at all but that post by JamesIG wouldn't have been approved by me to be published.
 
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