Spreadco spread free trading

twinj

Well-known member
264 6
I lost a lot of money with spreadco and decided that trading was not for me. I thought I would take advantage of their 2 percent interest payments on deposits as long as you traded 10 times. Now they only pay on up to 20,000 pounds but you no longer need to do any trades.

But I wanted to let you know about their spread free trading. I was sceptical at first because if any of you remember, Worldspreads offered zero spreads and soon after went into administration. I have put those fears aside and since December have been making use of this feature. Simply put, I like it. Almost all trades go through without a hitch. They do not like scalping so if that is your intention, it will not be suitable.

There are conditions such as maximum trade size and number of free trades per day. I am on the free one but there is another account which you pay 10 pounds per month I think. I am getting 4 free trades per day with a maximum trade size of 3 pounds per point. The number of free trades does not decrease for closing trades but it may do so if you net out the position. After you use up the free trades, it becomes commission based but only for the opening trade. The spread remains free. So if you traded 3 pounds per point, it would cost 3 pounds commission to open it but no commission when closing. I think this will work out as a half a point spread so it is very reasonable.

Good luck with your trading and long may this continue.
 

Emini-mouse

Active member
113 12
I lost a lot of money with spreadco and decided that trading was not for me. I thought I would take advantage of their 2 percent interest payments on deposits as long as you traded 10 times. Now they only pay on up to 20,000 pounds but you no longer need to do any trades.

But I wanted to let you know about their spread free trading. I was sceptical at first because if any of you remember, Worldspreads offered zero spreads and soon after went into administration. I have put those fears aside and since December have been making use of this feature. Simply put, I like it. Almost all trades go through without a hitch. They do not like scalping so if that is your intention, it will not be suitable.

There are conditions such as maximum trade size and number of free trades per day. I am on the free one but there is another account which you pay 10 pounds per month I think. I am getting 4 free trades per day with a maximum trade size of 3 pounds per point. The number of free trades does not decrease for closing trades but it may do so if you net out the position. After you use up the free trades, it becomes commission based but only for the opening trade. The spread remains free. So if you traded 3 pounds per point, it would cost 3 pounds commission to open it but no commission when closing. I think this will work out as a half a point spread so it is very reasonable.

Good luck with your trading and long may this continue.
£3 a point costing £3 equals 1point spread with no commission on closing
 

twinj

Well-known member
264 6
Update: since 30th April, I have been placed on dealer referral (execution is no longer fast, may take a few seconds with a requote likely). They did not say why at first but when I asked for an explanation, they gave me my trades on 29th and 30th claiming that I was infringing the terms and conditions with regards to approximately 50 percent of trades less than 3 minutes. I had a look and this would be the case if they counted the loss making trades and count my hedging trades (for instance, if I open a trade and hedge the trade within 3 minutes, they appear to count those as infringing their terms. I am awaiting clarification.

I have also mentioned to them that I was informed by a colleague that in the event of a loss making trade, you can close the trade within the 3 minutes. I was also told that hedging is allowed. I was never told that I could not hedge within 3 minutes.

I have recouped my losses and considerably up since December. I cannot help thinking that people who are consistent winners are not welcome.

I suppose I can live with hedging must be after 3 minutes but not being allowed to close a loss making trade in less than 3 minutes is rather restrictive. It begs the question whether the zero spreads is actually worth it?
 

tomorton

Legendary member
7,231 963
I wonder if its just a marketing ploy which its impossible to take advantage of - all discounts cost the firm money and if they can advertise a discount which nobody can take up, they might pump up their market share without spending money. The real advantage of zero spreads comes only when you're doing large numbers of very small trades. If that style of trading is classed by the firm as scalping, they will naturally restrict or stop what you're doing.

Some SB firms tightly define what they regard as scalping. Its not so much that scalping is a highly lucrative style, its more that they find it difficult (i.e. expensive) to cover their risks against trades which last only seconds or minutes. But there are SB and CFD providers who let you use any strategy you like, including scalping. Google best forex spreadbetting scalping for lists.
 

twinj

Well-known member
264 6
Thank you for the post tomorton. I have been having a look at other offerings. But I don''t really classify myself as a scalper. For instance on the 29th and 30th April which were typical, there were 12 open-close pair trades so six per day. Due to family circumstances, I limit my trading activity from the children leaving for school to when they come back. I find this the most comfortable period. I don't actively try and profit from short trades (less than 3 minutes). They are normally closed to limit my losses. If I am fortunate enough to ride a trend in the correct direction, I will try to hold on until I sense a significant reversal which is well over 3 minutes. So from what I have experienced before the dealer referrals, I have been happy.

What bothers me is that I was told by my account manager that it is okay to close trades within 3 minutes occasionally and to limit my losses. I also confirmed that hedging is fine. I will post any relevant info in their reply here.
 

twinj

Well-known member
264 6
PS: I think you are right that they will not like some one taking advantage of the zero spreads for scalping. But it is only 4 trades per day so I cannot see much success in that regard for a potential scalper.

I also agree that it may well be a marketing tactic but it is hardly discussed in this forum or elsewhere. It would be nice to have some views from other users.
 
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twinj

Well-known member
264 6
My conclusion is that I have lost faith in Spreadco. It is clear that they have put me on dealer referral because I have been successfully winning. They caught me out because the terms and conditions were not clear. I also asked if I will be off dealer referral if I move off the spread-free account but will still be on dealer referral. Accepting their advice, I have contacted the ombudsman just to see how things turn out.

It is painful looking for another provider because it takes time to trust them and get used to their platform. I still like their execution if you are not on dealer referral but it hardly seems worth it if you are punished for exiting loss-making trades within 3 minutes.
 

tomorton

Legendary member
7,231 963
My conclusion is that I have lost faith in Spreadco. It is clear that they have put me on dealer referral because I have been successfully winning. They caught me out because the terms and conditions were not clear. I also asked if I will be off dealer referral if I move off the spread-free account but will still be on dealer referral. Accepting their advice, I have contacted the ombudsman just to see how things turn out.

It is painful looking for another provider because it takes time to trust them and get used to their platform. I still like their execution if you are not on dealer referral but it hardly seems worth it if you are punished for exiting loss-making trades within 3 minutes.
I suspect its not that you are successful, its that they can't easily quickly and cheaply lay off the risk of your winnings onto losing traders. If you were successful with trades over 3 days they'd leave you alone (unless your stakes became so big they had the same problem).
 

tomorton

Legendary member
7,231 963
I'm sorry to hear you're having to knock this on the head but by the way, I was on chat with my SB firm recently and told them I was using a strategy that might be called scalping. I said that trades would be entered with small stakes (you have to keep the cumulative margin of all pending orders within the free margin total at any time) for very tight TP's, so trades could last a few minutes, or maybe a few seconds. They were clear that they do not treat scalpers negatively and clients are free to use whatever strategy they wish. They are not spread-free.

There are one or two techniques even this firm won't allow - such as if you put in large numbers of orders which cumulatively exceed your total free margin, or if you take unfair advantage of their systems and pricing (arbitrage I suppose).
 

twinj

Well-known member
264 6
I suspect you are right but they could admit that they did not explain things well about the loss-making trades and hedging trades, and give me another chance. All they would do is half-heartedly admit that it was misleading but would not change their minds.
 
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twinj

Well-known member
264 6
I'm sorry to hear you're having to knock this on the head but by the way, I was on chat with my SB firm recently and told them I was using a strategy that might be called scalping. I said that trades would be entered with small stakes (you have to keep the cumulative margin of all pending orders within the free margin total at any time) for very tight TP's, so trades could last a few minutes, or maybe a few seconds. They were clear that they do not treat scalpers negatively and clients are free to use whatever strategy they wish. They are not spread-free.

There are one or two techniques even this firm won't allow - such as if you put in large numbers of orders which cumulatively exceed your total free margin, or if you take unfair advantage of their systems and pricing (arbitrage I suppose).
Thank you for sharing your story. I don't believe I am scalping the market though. I just need to minimise losses by sometimes exiting within 3 minutes. I thought most places would not complain if that is done. For the upside, it could be anything from above 3 minutes to 1 hour. I am happy to make 150 pounds plus in that time and close. So the timing becomes crucial. If I sense a I have made a mistake, I want to be able to get out quickly.
 

Your User Name

Junior member
25 0
Some things never change. As a veteran of WorldSpreads, I think zero spread is nothing but a gimmick, probably one of the few ways providers are allowed to tempt punters now. If it really was fixed zero spread with no delay then the '80% lose' stat would be dropping rapidly. I've sure all SBs will be delighted to have scalpers, as long as they don't make a profit.

As ever, major markets will tend to self-hedge, so the SB firm only has to worry if the overall position is skewed and potentially dangerous. DYOR!
 

twinj

Well-known member
264 6
Thank you for the post Your User Name. It took me over a year to get my funds back from the WorldSpreads administrator. Spreadco pay 2 percent deposit interest so I am keeping my funds there for the time being whilst the ombudsman looks into my complaint. It is unusual that spreadco have close to 60 percent losing money compared to others which are above 70 percent and closer to 80 percent.
 

Your User Name

Junior member
25 0
I've been looking at the Spreadco site again and can't quite understand how the zero spread offer works. Why would anyone want to pay a spread if you don't have to?
 

twinj

Well-known member
264 6
Assuming you have read the first post, you are asking why there are still two account types? Spread-free and normal-spread. I think it is for people who may want to be t larger amounts than 3ppp. Spread-free is limited but normal-spread you can bet larger amounts. With spread-free, the maximum on one instrument after say three trades is 8ppp.