Spreads

[the pro]

Hi Guys

I am relatively new to spread betting, 6 trades under my belt so far.

I wonder if someone could give me a little info. This morning I had a stop in a company called DIGNITY (DTY) FTSE350 stock.

The stop was at 1455.4 and I was stopped out at 1453.1. So a bit of slippage there, the first time so far, but according to my Sharescope intraday feed the price tells me the stock opened at 1490 with a low of 1470 during the first 20 mins of the market opening.

Capital spreads tell me that their opening bid price was 1453.1 hence the reason that I was stopped out. In the same breath they tell me that their spreads are 0.25%, I am not sure if this is either side of the Mid price, even if it is;

This makes the prices according to my Sharescope data

Mid Price around 1470 (even though that was not the opening price according to Sharescope data) this would give a bid price of 1453.1 this alone is 17p which equates to 1.15% and that is just one side.

You can of course guess what happened to the price thereafter!!

Am I being taken for a mug or is my data feed incorrect or do I need to widen my stops even further or simply change spreadbetting companies.

I would be pleased to hear from anyone with more accurate data.

Just my little rant, but I don’t suffer fools gladly, so I’d be quick to move, I bow to your superior knowledge.

 

[malaguti]

Hi Guys

I am relatively new to spread betting, 6 trades under my belt so far.

I wonder if someone could give me a little info. This morning I had a stop in a company called DIGNITY (DTY) FTSE350 stock.

The stop was at 1455.4 and I was stopped out at 1453.1. So a bit of slippage there, the first time so far, but according to my Sharescope intraday feed the price tells me the stock opened at 1490 with a low of 1470 during the first 20 mins of the market opening.

Capital spreads tell me that their opening bid price was 1453.1 hence the reason that I was stopped out. In the same breath they tell me that their spreads are 0.25%, I am not sure if this is either side of the Mid price, even if it is;

This makes the prices according to my Sharescope data

Mid Price around 1470 (even though that was not the opening price according to Sharescope data) this would give a bid price of 1453.1 this alone is 17p which equates to 1.15% and that is just one side.

You can of course guess what happened to the price thereafter!!

Am I being taken for a mug or is my data feed incorrect or do I need to widen my stops even further or simply change spreadbetting companies.

I would be pleased to hear from anyone with more accurate data.

Just my little rant, but I don’t suffer fools gladly, so I’d be quick to move, I bow to your superior knowledge.

I get an open at 1490 and a low at 1466 so you're data is ok
however the mid price as I speak is at 1488.5..comparing two brokers right now
ETX has the bid at 1485 and Gekko markets has the bid at 1451. Thats an enormous difference. Look to change your broker in my opinion

 

[peakoil]

Good day to you,

I have to agree with Malaguti's advice, with the usual caveat please to DYOR.

ETX's low of the morning, which Malaguti could kindly confirm, was naughty in my opinion, as it's 1448. I should add that Spreadco's price, wasn't much better at just over 1550 low of the day.

Fairest of all, it must be said, was IG Index, whose price came closest to the underlying, giving a low of the day of 1462.x on both the rolling daily and, with only a fraction's difference, the 21st March contract. The other firms really should have no reason to wonder why their main competitor is doing so much business!

BTW, your calling them up for a chat was IMO the right thing to do. Alas...

Also, I'm seeing the same as Malaguti for the underlying low of the day:

4 9221902958 1474.28 128 NT 1466.0 1489.0

 

[malaguti]

Good day to you,

I have to agree with Malaguti's advice, with the usual caveat please to DYOR.

ETX's low of the morning, which Malaguti could kindly confirm, was naughty in my opinion, as it's 1448. I should add that Spreadco's price, wasn't much better at just over 1550 low of the day.

Fairest of all, it must be said, was IG Index, whose price came closest to the underlying, giving a low of the day of 1462.x on both the rolling daily and, with only a fraction's difference, the 21st March contract. The other firms really should have no reason to wonder why their main competitor is doing so much business!

BTW, your calling them up for a chat was IMO the right thing to do. Alas...

Also, I'm seeing the same as Malaguti for the underlying low of the day:

4 9221902958 1474.28 128 NT 1466.0 1489.0

1448.8 bid price first thing, yep pretty awful.

 

[the pro]

Hi Guys

Thanks for the feedback. I am understanding from your detective work, that had I been with IG index I wouldn't have been stopped out as opposed to Capital Spreads, who I currently use.

 

[malaguti]

Hi Guys

Thanks for the feedback. I am understanding from your detective work, that had I been with IG index I wouldn't have been stopped out as opposed to Capital Spreads, who I currently use.

correct, instead you would have probably have been filled later and when you complained to them, they would have spun you a line like.."its your internet connection". I gave up with IG as their fills were diabolical and everything was referred to a dealer.

 

[darktone]

Good day to you,

I have to agree with Malaguti's advice, with the usual caveat please to DYOR.

ETX's low of the morning, which Malaguti could kindly confirm, was naughty in my opinion, as it's 1448. I should add that Spreadco's price, wasn't much better at just over 1550 low of the day.

Fairest of all, it must be said, was IG Index, whose price came closest to the underlying, giving a low of the day of 1462.x on both the rolling daily and, with only a fraction's difference, the 21st March contract. The other firms really should have no reason to wonder why their main competitor is doing so much business!

BTW, your calling them up for a chat was IMO the right thing to do. Alas...

Also, I'm seeing the same as Malaguti for the underlying low of the day:

4 9221902958 1474.28 128 NT 1466.0 1489.0

Out of interest, do you/anyone have the numbers for the lowest asks/offers?
Are the spreads fixed/dynamic?
Be interesting to look at both side of coin.

 

[peakoil]

Can't guarantee anything absolutely, as this is definitely a case of DYOR. However, going by the facts you've given us, things are pointing in that direction.

 

[the pro]

Hi Guys
Getting more confused by the minute. Are we saying that IG are a pile of S_____ if so can we have an upto date survey on who is happy with their spreadbetting company and who isn't. Perhaps the Good, Bad and the Ugly, let's hope they look in some may change their ways. just looking for a level playing field really. I am looking for constructive feedback, not those that just want to have a bitch because of a loss.

i am quite happy to admit my mistakes, but don't want to be mugged off by the company I deal with

Thanks for the feedback so far

 

[barjon]

You'll often get this sort of thing first thing in the morning with the smaller shares.

The spread often gyrates wildly in the "real" market until things settle down and even more so with the SB prices, of course.

 

[peakoil]

@the pro: FWIW I'm happy with IG and I regularly use them. So please don't think I'm saying otherwise. About a decade ago things were different, but they've got much better over the past 6 or 7 years. I'd suspect (and stand corrected if wrong) that Malaguti remembers how it was in earlier days, and hasn't looked back since. Anyway, please just look at how few complaints there are here, in recent years, and methinks that might tell you something.

@darktone: spreads are not fixed on that instrument - when the mkt spread widens you can be sure theirs does too, but I've found that IG generally keep reliably close to the underlying. The day's low offer is looking on that one to be around 1480, so it seems to have widened considerably early in the morning, (just as barjon is saying) but nowhere near as bad in the underlying as might be suggested from certain firm's numbers...

 

[darktone]

Hi Guys
Getting more confused by the minute. Are we saying that IG are a pile of S_____ if so can we have an upto date survey on who is happy with their spreadbetting company and who isn't. Perhaps the Good, Bad and the Ugly, let's hope they look in some may change their ways. just looking for a level playing field really. I am looking for constructive feedback, not those that just want to have a bitch because of a loss.

i am quite happy to admit my mistakes, but don't want to be mugged off by the company I deal with

Thanks for the feedback so far

What jon just said.

my 2c
Its up you to judge what is and isnt fair and to understand as best you can the products youre trading. If the spread is dynamic, wildly so in the morning, you didnt imo get 'mugged off', you just didnt play the game very well, and got caught by using a hard stop in this environment.
This is why i asked what the various sb were 'offering' at the time, who was the widest? who was the narrowest? how can i capitalize? All good questions to ask yourself imo.
The bit in bold is a great, start.

 

[peakoil]

Being able to admit your mistakes, is as darktone says, a good characteristic to have.

Being able to profit from your mistakes, is an even better goal

 

[the pro]

Hi Darktone
Thanks for your feedback. i am not sure if I was "Mugged off" on this one or not. It may just be case of having to have, in effect two stops, an opening stop and then replaced with a tighter stop say 10 mins later. All I'm really saying is, I tend to give the benefit of the doubt once and then I take action, let's hope the "once" hasn't been spent yet.


Don't really want to be looking to change companies so early. Perhaps filtering for volume may be an area to look at. Perhaps all the 350 stocks are not a good idea anway, always learning, "Live in hope, die in despair' that's my motto!

Thanks again

 

[malaguti]

@the pro: FWIW I'm happy with IG and I regularly use them. So please don't think I'm saying otherwise. About a decade ago things were different, but they've got much better over the past 6 or 7 years. I'd suspect (and stand corrected if wrong) that Malaguti remembers how it was in earlier days, and hasn't looked back since. Anyway, please just look at how few complaints there are here, in recent years, and methinks that might tell you something.

@darktone: spreads are not fixed on that instrument - when the mkt spread widens you can be sure theirs does too, but I've found that IG generally keep reliably close to the underlying. The day's low offer is looking on that one to be around 1480, so it seems to have widened considerably early in the morning, (just as barjon is saying) but nowhere near as bad in the underlying as might be suggested from certain firm's numbers...

I'd go along completely with this..it is just personal opinion and we'll all differ there. I use ETX as I know the fill is always spot on. I used IG from 2009 and then again some time later in 2011/12 and has always left a bitter taste as it were. However I can't deny IGs spread are the best. I also can't deny they offer more products, such as futures on UK stocks which ETX don't
Their execution is what I have found to be poor, whereas peakoil hasn't so its just personal experience. i apologise to you ThePro for perhaps muddying the water with my own tainted bias but you need to find this out for yourself I guess.
Whenever I find a bad spread like in your case with ETX, I simply don't trade it.
Maybe if I opened another IG account, or maybe not in my name it may be better who knows

 

[the pro]

I'd go along completely with this..it is just personal opinion and we'll all differ there. I use ETX as I know the fill is always spot on. I used IG from 2009 and then again some time later in 2011/12 and has always left a bitter taste as it were. However I can't deny IGs spread are the best. I also can't deny they offer more products, such as futures on UK stocks which ETX don't
Their execution is what I have found to be poor, whereas peakoil hasn't so its just personal experience. i apologise to you ThePro for perhaps muddying the water with my own tainted bias but you need to find this out for yourself I guess.
Whenever I find a bad spread like in your case with ETX, I simply don't trade it.
Maybe if I opened another IG account, or maybe not in my name it may be better who knows

Is ETX the same as Capital Spreads? I am also looking to shortcut experience especially bad ones through the combined knowledge of you guys who have been there and done it.

That's what I see the Forum for, as a learning tool, a way to get from A to b only quicker, If I can learn from good experiences as well as bad I'll trade smarter next week.

Thanks for the input

 

[malaguti]

Is ETX the same as Capital Spreads? I am also looking to shortcut experience especially bad ones through the combined knowledge of you guys who have been there and done it.

That's what I see the Forum for, as a learning tool, a way to get from A to b only quicker, If I can learn from good experiences as well as bad I'll trade smarter next week.

Thanks for the input

Not that i'm aware of they're not. Shortcutting experience is a great idea, but often that experience is personal (as with my experience). Why not try both and see for yourself?
IG and Capital that is. There is nothing wrong with hedging your bets with more than one provider

 

[darktone]

Hi Darktone
Thanks for your feedback. i am not sure if I was "Mugged off" on this one or not. It may just be case of having to have, in effect two stops, an opening stop and then replaced with a tighter stop say 10 mins later. All I'm really saying is, I tend to give the benefit of the doubt once and then I take action, let's hope the "once" hasn't been spent yet.


Don't really want to be looking to change companies so early. Perhaps filtering for volume may be an area to look at. Perhaps all the 350 stocks are not a good idea anway, always learning, "Live in hope, die in despair' that's my motto!

Thanks again

Imo, your stop in this example was a bad bet. But has to be said that generally, i see a stop as a bad bet. A limit order to take losses with a side order of slippage.

 

[the pro]

Imo, your stop in this example was a bad bet. But has to be said that generally, i see a stop as a bad bet. A limit order to take losses with a side order of slippage.

Didn't quite take anything from that comment

 

[darktone]

Didn't quite take anything from that comment

You used a stop order which got fired when the mm widened their spread. That imo is a bad bet.
I dont like using stop orders for this reason.
Example (crappy, but im just aiming to convey an idea):
You buy at 10 and have a stop order at 5 and a tp at 15. You used a 'protective' stop, like most 'good' traders do.
What you have done in a sense is a place a limit to take a profit at 15 and a limit (i know its not technically a limit) at 5.
You are trading the idea that price will hit 15 before 5 and in both cases u will be filled when price reeeaaaches either, at that moment in time you will trading at a price that is either in ur favor (tp limit) or against your favor (stop)
As a good trader it makes good sense to like what 'is in your favor' an dislike what is 'not in ur favor'.
A more 'in your favor' kinda way of taking you loss might be to set a limit to exit at 7 once the price has printed 5 and you no longer have a valid reason to be in the trade.


Lets take your trade as another example, if you ask yourself these questions.
1) have the reasons for me buying this stock changed? (whatever reason it was)
2) did I take my loss at a price that was in my favor?

Answers might be
1) well no, the daily ma is still onside and my macd alligator super trend indy yada yada still says buy. So the reason for me buying the first place still exists, maybe the loss i took was needless.
2) well no. The spread widened and i got stopped out, to add insult to injury they slipped my stop order which added an additional side order of loss, to my loss. To make matters worse, it closed 1480+

More questions to ask yourself might be:
1) Is the morning spread whack normal on this stock?
2) should i listen to this cheeky mofo who suggests the the preposterous idea of being more proactive in taking a loss and letting go of my cuddly protective stop.
3) are we having curry tonight?
4) will i get the squits like last time?
5).....................

Hope this helps, in all seriousness.
PS, if you havent read trading in the zone, theres a link in my sig