The fast-growing spreadbetting market. Is all as it seems?

rsh01

Experienced member
1,184 299
I believe it is true, the difficulty is that to date none of them have been caught, primarily because the authorities have not tried. If you look at retail forex however you will see that many companies have been caught defrauding their clients using some of the methods you mention. They have all been caught by the US authorities though, as SB is not allowed in the US the SB companies get much less scrutiny than would otherwise be the case.

lets put it into context.....

take the TBTFs & other multimstionals' nefarious activities of late which have at least been fined: libor fixing (Barclays); swap rate fixing (JPM); electricity price fixing (JPM et al); oil swap price fixing (Total); martingaling when supposed to be a hedging risk function (jpm - the whale); using client fund as collateral to leverage trade sovereign bonds (MF Global); Money laundering for mexican cartels (HSBC); equities (everyone Buffet etc)

so out of major mkts this only really leaves gold (PMs - wont be long before this gets found out) and fx - which are not being manipulated (haha). regulating fx wld be a nice start.

(must have missed some off, anyone got anymore? i have only been adding one example so if you have anymore)

so with these fine custodians what do you expect further down the chain? its a morally bankrupt industry, & i worked in it for far too long.
 

pboyles

Legendary member
8,072 1,303
lets put it into context.....

take the TBTFs & other multimstionals' nefarious activities of late which have at least been fined: libor fixing (Barclays); swap rate fixing (JPM); electricity price fixing (JPM et al); oil swap price fixing (Total); martingaling when supposed to be a hedging risk function (jpm - the whale); using client fund as collateral to leverage trade sovereign bonds (MF Global); Money laundering for mexican cartels (HSBC); equities (everyone Buffet etc)

so out of major mkts this only really leaves gold (PMs - wont be long before this gets found out) and fx - which are not being manipulated (haha). regulating fx wld be a nice start.

(must have missed some off, anyone got anymore? i have only been adding one example so if you have anymore)

so with these fine custodians what do you expect further down the chain? its a morally bankrupt industry, & i worked in it for far too long.

Exactly, but still some people think a SB company won't scam a few pips off them here and there, not even a SB company that was caught doing the same thing on FX accounts. I can't help thinking some people are addicted to this as a form of gambling and are unwilling to recognise the problem because they're in denial about it all.
 

barjon

Legendary member
10,705 1,809
Exactly, but still some people think a SB company won't scam a few pips off them here and there, not even a SB company that was caught doing the same thing on FX accounts. I can't help thinking some people are addicted to this as a form of gambling and are unwilling to recognise the problem because they're in denial about it all.

Can you think of any business, in any form of commerce, that plays things absolutely straight with their customers at all times? I'd be surprised if you could draw up a very long list.

That doesn't make it right, of course, but it does mean that we continue to do business until we feel that we are being too severely disadvantaged - then we go go elsewhere (long live competition, lol). Why should anyone think differently so far as SBs are concerned? Maybe they are not necessarily "in denial", but just accepting that there may be a slight extra cost from time to time.
 

Splitlink

Legendary member
10,850 1,234
Exactly, but still some people think a SB company won't scam a few pips off them here and there, not even a SB company that was caught doing the same thing on FX accounts. I can't help thinking some people are addicted to this as a form of gambling and are unwilling to recognise the problem because they're in denial about it all.

I believe that you are correct. It is a form of gambling to, not just some people, but to many, if not most. But to single out SB companies as the epitome of corrupt business practice is not correct, either. After what has happened to the capitalist world in the last few years, I consider it to be as safe an industry as many more, some of which working people had, because of their faith, their life savings and pensions decimated and where pillars of society have been named, shamed, fired and given golden handshakes at the same time!

Your posts are good advice to open people's eyes to what can happen if one is too trusting but people are gamblers by nature and business, in general, is a gamble, too. The number of betting shops in the high streets that have fruit machines before one gets near the counter is innumerable and they are in use all day.

I have been using the same SB company for a decade with no problem (visible to my eye, anyway). I am moderate and do not take undue risks. I win some and lose some. However, I do not believe that the instrument one uses to trade is more corrupt than the market, itself, and that is what the would be trader has to realise most. He cannot know, only believe, that he knows the direction that the market will take once he has opened his trade.
 
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pboyles

Legendary member
8,072 1,303
Can you think of any business, in any form of commerce, that plays things absolutely straight with their customers at all times? I'd be surprised if you could draw up a very long list.

That doesn't make it right, of course, but it does mean that we continue to do business until we feel that we are being too severely disadvantaged - then we go go elsewhere (long live competition, lol). Why should anyone think differently so far as SBs are concerned? Maybe they are not necessarily "in denial", but just accepting that there may be a slight extra cost from time to time.

If you went into a shop and bought 10 bananas and they only gave you 9 would you -

1. Say 'where's my other banana'.

or

2. Don't count the bananas and accept that there might only be nine and that's just an extra cost that you accept because at the end of the day 9 bananas is probably enough anyhow.

I think you're saying it would be 2.
 

barjon

Legendary member
10,705 1,809
If you went into a shop and bought 10 bananas and they only gave you 9 would you -

1. Say 'where's my other banana'.

or

2. Don't count the bananas and accept that there might only be nine and that's just an extra cost that you accept because at the end of the day 9 bananas is probably enough anyhow.

I think you're saying it would be 2.

:LOL: well if I was buying 1kg of bananas and found when I got home they only weighed 998g because the guy had put his thumb on the scales I probably wouldn't moan too much.
 

Canulearntotrade

Junior member
21 1
Mr Baghdady

I have a much more entertaining story about the pay to learn to lose money trading industry. Have you ever heard of Mike Baghdady, previous name Mahmoud Baghdady, previous previous name Mahmoud Ali Mahmoud? You could write a book about his exploits, multiple bankruptcies, appearances in the small claims court, staff moaning about not getting paid, former staff allegedly getting a slap around the ear. All of this whilst claiming to be the world trading champion and a millionaire.

You're the second person to mention this gentleman's escapades to me recently pboyle. Hmm. Its not one for broadsheet's but it might be one for the tabloids. Please do get in touch via email if you fancy chatting more about this.
David
[email protected]
 

barneydunn

Active member
116 31
Can I just point out as well that most people will ultimately lose their money whatever their broker is like and that a lot of people who claim they have been disadvantaged in some way by the sharp practices of their broker are in fact just crap traders.
 
 
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