BroadSword
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jimbo57 said:
Well, I can guess what they would say if you rang up after the trade was placed, saying the price was "wrong" and you wanted it 20 pips in your favour. They'd probably say two words, the second one being "off"
Seriously, in the T&C / small print there is probably a clause that gets them out if they make a substantial mis-quote (I know there is with other SB co's).
Don't lose sight of the fact that these guys make the rules....
jimbo57 said:
Presumably in their T&C there is a clause covering a palpably wrong price. Exactly what constitutes a 'palpably' wrong price is clearly open to interpretation, but on crude oil, 20 tics out is probably about right. I don't use finspreads myself, but I would imagine the online confirmation is subordinate to this clause in the T&C.
There is probably a time limit in the T&C - something like two days- limiting the time you have to point out any wrong trades or errors on your account. If they don't notice an error in your favour for the same period, it would IMHO be reasonable for you to assume the trade is good.
Despite Broadsword's opinion above, if you trade at a palpably (that word again) wrong price, they have a legal duty either to enter you into a trade at the correct price, or to cancel the trade. These are the same choices they should have offered you after you traded at the wrong level.
Beach Runner
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jimbo57,
This sounds appalling. I think you were very understanding. I wonder how often they do this per day? I used to spread bet a few years ago and I don't ever remember this happening. I would not have been very happy if it had.
This sounds appalling. I think you were very understanding. I wonder how often they do this per day? I used to spread bet a few years ago and I don't ever remember this happening. I would not have been very happy if it had.
with normal brokerage firms, once you receive a contract note, it is final - that is the price you have got from the exchange. However, since SB companies qoute their own spreads and therefore do not through the exchange, I guess that gives them the right to set their own prices! I am surprised that they gave a price with 20 ticks difference - a bit of a joke really! I am getting more disillusioned with SB recently.
What is anyone's views on Options? I attended a free seminar about Options investing with a company called 'Market-edge Terading Seminars' - it seems very good and different from the rest. They have got a seminar this Sunday at the Hilton in Bayswater - I am going to attend!
Let me know if anyone is also trading Oprtions via SB!
What is anyone's views on Options? I attended a free seminar about Options investing with a company called 'Market-edge Terading Seminars' - it seems very good and different from the rest. They have got a seminar this Sunday at the Hilton in Bayswater - I am going to attend!
Let me know if anyone is also trading Oprtions via SB!
stevespray
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All this information is gathered from the opinions of several ‘legal eagle’ friends of mine and is to be regarded ‘as is’ – In other words, I’m not qualified to say this!
The subject of cancelled trades and palpable errors is an interesting one.
It is interesting because, in the terms of a spreadbet, a palpable error is highly subjective given that the spreadbet companies reserve the right to vary their markets away from underlying markets. They obviously reserve that right because it is financially viable for them to do so.
In reality a ‘palpable error’ does present a legal problem for a spreadbet company regardless of what their terms and conditions might state on the issue. Basic statute law states that a contract is entered in to when there is an ‘offer’ followed by an ‘acceptance’. This law is, in effect, a greater law than the spreadbet company’s customer agreement. This means that the spreadbet company’s terms and conditions would immediately fall foul of the Unfair Terms and Conditions in Consumer Contracts Act of 1999 (UTCCC). Under that act they can not enforce a term or condition which is contrary to rights obtained under statute legislation. As spreadbets are legally enforceable under section 412 of the Financial Services and Markets Act of 2000 the company would have little room for manoeuvre.
Technically, when you ‘spreadbet’, you are dealing in a derivative product or ‘Index’ which is created and priced by the spreadbetting company. How they choose to derive that price is entirely up to them. One of my lawyer friends, who also has a knowledge of financial markets, has commented that it can clearly be demonstrated that the making and pricing of a derivative product is fraught with potential pitfalls (ie establishing a true underlying price / interest rates / dividends etc all have to be considered – this is especially true of a ‘futures’ type of product). My friends ‘legal point’ is that this can reasonably be termed as ‘the nature of the business’ or the ‘risk’ involved in offering derived products or parallel markets. Due to that fact it is unlikely that a court would uphold a term or condition which a company tried to enforce to circumvent such an obvious or known ‘risk’ which related directly to the business which the company directly dealt with. The company would therefore struggle to prove that it had the legal right to break its contract with you in respect of the individual bet.
I hope that these comments go some way to answering the original question which started the thread.
Moving on to options and the trading of them via spreadbet. I did actually do this until quite recently. In fact I had a thread on the board some months back called something like “Lets make some money spreadbetting”. In that thread was a simple strategy which worked well in the markets at that time.
In my opinion it is best to migrate away from spreadbetting towards direct access. There is much better value to be obtained in my opinion regardless of tax implications.
The spreadbetting companies which offer ‘guaranteed order’ fills can be very useful when dealing with options especially if you like writing ‘strangles’. In my opinion one company hasn't fully calculated the ‘risk’ element which they build into their guaranteed order costing. Private message me if you want more details on that one.
What was discussed that the options seminar? Was it good information or was it just a ‘pilot’ for one of those more costly seminars ala Darren Winters?
Steve.
The subject of cancelled trades and palpable errors is an interesting one.
It is interesting because, in the terms of a spreadbet, a palpable error is highly subjective given that the spreadbet companies reserve the right to vary their markets away from underlying markets. They obviously reserve that right because it is financially viable for them to do so.
In reality a ‘palpable error’ does present a legal problem for a spreadbet company regardless of what their terms and conditions might state on the issue. Basic statute law states that a contract is entered in to when there is an ‘offer’ followed by an ‘acceptance’. This law is, in effect, a greater law than the spreadbet company’s customer agreement. This means that the spreadbet company’s terms and conditions would immediately fall foul of the Unfair Terms and Conditions in Consumer Contracts Act of 1999 (UTCCC). Under that act they can not enforce a term or condition which is contrary to rights obtained under statute legislation. As spreadbets are legally enforceable under section 412 of the Financial Services and Markets Act of 2000 the company would have little room for manoeuvre.
Technically, when you ‘spreadbet’, you are dealing in a derivative product or ‘Index’ which is created and priced by the spreadbetting company. How they choose to derive that price is entirely up to them. One of my lawyer friends, who also has a knowledge of financial markets, has commented that it can clearly be demonstrated that the making and pricing of a derivative product is fraught with potential pitfalls (ie establishing a true underlying price / interest rates / dividends etc all have to be considered – this is especially true of a ‘futures’ type of product). My friends ‘legal point’ is that this can reasonably be termed as ‘the nature of the business’ or the ‘risk’ involved in offering derived products or parallel markets. Due to that fact it is unlikely that a court would uphold a term or condition which a company tried to enforce to circumvent such an obvious or known ‘risk’ which related directly to the business which the company directly dealt with. The company would therefore struggle to prove that it had the legal right to break its contract with you in respect of the individual bet.
I hope that these comments go some way to answering the original question which started the thread.
Moving on to options and the trading of them via spreadbet. I did actually do this until quite recently. In fact I had a thread on the board some months back called something like “Lets make some money spreadbetting”. In that thread was a simple strategy which worked well in the markets at that time.
In my opinion it is best to migrate away from spreadbetting towards direct access. There is much better value to be obtained in my opinion regardless of tax implications.
The spreadbetting companies which offer ‘guaranteed order’ fills can be very useful when dealing with options especially if you like writing ‘strangles’. In my opinion one company hasn't fully calculated the ‘risk’ element which they build into their guaranteed order costing. Private message me if you want more details on that one.
What was discussed that the options seminar? Was it good information or was it just a ‘pilot’ for one of those more costly seminars ala Darren Winters?
Steve.
nine
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FWIW I've dealt with Finspreads a lot (1000s of trades) and occasionally I spot a price out of line with the underlying. When I did I always took it ... lol
About 1/2 the time I would get a call saying that they had misquoted and then we would cancel. Because I am trading spreads I would ask them to cancel the other half at the same time .... and despite no obligation to do so they always did.
Personally I think that this is pretty nice behaviour on their part ... they have no obligation to let me off the other half of the spread.
About 1/2 the time I would get a call saying that they had misquoted and then we would cancel. Because I am trading spreads I would ask them to cancel the other half at the same time .... and despite no obligation to do so they always did.
Personally I think that this is pretty nice behaviour on their part ... they have no obligation to let me off the other half of the spread.
Last edited:
capitalspreads
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I know i dont usually comment here but I feel I must add a note about manifest errors etc.
Clients cannot have it both ways ... when a misquote hits the screens a spread betting company will have any amount of stop orders being activated from existing positions. SS says in his offer / acceptance speech that this defines an unfair contract .. but if you walked into a rolls royce show room and the price on top of the car instead of saying £120,000 said £20,000 because the 1 had fallen off (or been removed!!) and you said to some junior salesman "oh I will buy at that price" and he agreed not knowing that the price was incorrect. This would not constitute an agreed contract. Otherwise in my original example the SB company would just stop out all clients on a misquote and say "well because SS won a court case saying that as long as we have offered a price on our trading platform it is legally binding, then tough"
In direct access the same thing happens when a market makes an incorrect move the deals activated are just DK'ed. If the price is not real than you cannot trade at it (although with SB cmpanies you may gat away with it if they do not notice!!).
As it happens we have an absolute definition of an incorrect market price in our Terms so that there is no dispute about what constitutes a poor price.
And by the way we never ever bias our prices n matter what
Clients cannot have it both ways ... when a misquote hits the screens a spread betting company will have any amount of stop orders being activated from existing positions. SS says in his offer / acceptance speech that this defines an unfair contract .. but if you walked into a rolls royce show room and the price on top of the car instead of saying £120,000 said £20,000 because the 1 had fallen off (or been removed!!) and you said to some junior salesman "oh I will buy at that price" and he agreed not knowing that the price was incorrect. This would not constitute an agreed contract. Otherwise in my original example the SB company would just stop out all clients on a misquote and say "well because SS won a court case saying that as long as we have offered a price on our trading platform it is legally binding, then tough"
In direct access the same thing happens when a market makes an incorrect move the deals activated are just DK'ed. If the price is not real than you cannot trade at it (although with SB cmpanies you may gat away with it if they do not notice!!).
As it happens we have an absolute definition of an incorrect market price in our Terms so that there is no dispute about what constitutes a poor price.
And by the way we never ever bias our prices n matter what
Spread betting is new to me and I follow the some of the threads out of interest.
I have prior to online trading been phoned by my futures broker correcting a market order fill in my favor, never against. Online trading occurs in one of 2 ways: 1: digitally confirmed transaction as soon as the 'Buy' is clicked; 2: requote — order/price is entered, broker confirms or quote a new offer.
Obviously one wants an error against one's position corrected. Occasionally things go wrong, malfunction, fail, however irrespective the liability for quotes and fills it seems to me rests with the seller, the company providing the service product, the broker. Whether or not they choose to honor the error is another matter, whether or not they want to contact me and give me a better price is up to them.
Capitalspreads:
"when a misquote hits the screens" ??? "when a market makes an incorrect move" ?????
As to the Rolls Royce £12,000 oops ! typo ! £20,000 price tag, there's lots of examples of online pricing errors and will no doubt continue to be:
http://www.hotelnewsresource.com/article16437.html
One can trade with give and take, provided one's broker also gives, but if there are repeated phone calls "the price was wrong" to one's detriment, then it's time for a different broker, or a regulator/court case, and I'll submit that contracts are different and second to law.
I have prior to online trading been phoned by my futures broker correcting a market order fill in my favor, never against. Online trading occurs in one of 2 ways: 1: digitally confirmed transaction as soon as the 'Buy' is clicked; 2: requote — order/price is entered, broker confirms or quote a new offer.
Obviously one wants an error against one's position corrected. Occasionally things go wrong, malfunction, fail, however irrespective the liability for quotes and fills it seems to me rests with the seller, the company providing the service product, the broker. Whether or not they choose to honor the error is another matter, whether or not they want to contact me and give me a better price is up to them.
Capitalspreads:
"when a misquote hits the screens" ??? "when a market makes an incorrect move" ?????
As to the Rolls Royce £12,000 oops ! typo ! £20,000 price tag, there's lots of examples of online pricing errors and will no doubt continue to be:
http://www.hotelnewsresource.com/article16437.html
One can trade with give and take, provided one's broker also gives, but if there are repeated phone calls "the price was wrong" to one's detriment, then it's time for a different broker, or a regulator/court case, and I'll submit that contracts are different and second to law.
stevespray
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Simon…..
Good input. It’s always good to hear the ‘other side’ of the story. It obviously provides a far more balanced argument.
I’d just like to make a few points in response to your comments.
Firstly, when the thread was started by Jimbo, he was asking for ‘clarity’ on what his actual position was. His legal position is effectively the ‘lowest denominator’ – the points of law which would settle his case. I grant you that it is unlikely that any company would ever go that far in an attempt to enforce their contract – there is no way that any large FSA regulated company would risk having such a court judgement go against them as a potentially dangerous president would be set.
Secondly, I understand your point surrounding stops etc. A customer is obviously going to be pretty annoyed if they were stopped out due to an erroneous spike caused by a bad price which came from the exchange feed. I think however, in the context of this thread, Jimbo was referring to an opening order on a price which was simply wrongly derived. Maybe he would like to further clarify this point. If my suspicion is correct then we are clearly talking about two types of pricing error. The first type is the error which you have referred to; the bad price from the exchange – This is clearly a pricing error which is beyond your company’s control. The second type of pricing error is slightly different. In Jimbo’s case it could be that the error was caused by a miscalculation on the company’s part – a company may use incorrect mathematics in establishing their advertised price - in such a situation it could be demonstrated that the ‘error’ was within the company’s control as apposed to an error which is ‘beyond the company’s control’. On that basis it would be harder for a company to break the contract. At the end of the day it is not unreasonable for a customer to claim that they just bought a product where the saw it advertised most cheaply – To further use your car analogy, if you had three garages close to your home which all sold the same model of car then you are most likely to buy your car from the garage which offers the best deal – why is it any different when a customer compares the different prices for entering a deal on a ‘derivative product’? Remember, a buyer is buying because he sees ‘value’ – its efficient market hypothesis.
Thirdly, your point on the Rolls Royce – I feel that you maybe incorrect in what you have stated. I have studied certain aspects of law over different periods of time. In the example you gave you mentioned a wrongly priced car. The law appears reasonably clear on this subject. When goods are offered for sale they can be ‘priced’ – a label can be attached to the product indicating a price at which the seller maybe prepared to deal at. This is legally known as an ITT or ‘Invitation To Treat’. Legally speaking, when the customer wants to buy the item he or she makes ‘an offer’ to buy the item at the price indicated – it is then up to the seller to accept or reject the ‘offer’ as he / she see fit. In your example you have suggested that a ‘junior salesman’ has accepted the customers offer to contract at the advertised price. Obviously with your use of the word ‘junior’ you are implying inexperience. This does not however alter the company’s legal obligations or the obligations of any contract which the salesman negotiates on behalf of his company. In such a situation the company should take reasonable steps to ensure that it’s ‘junior’ staff are adequately supervised. If they fail to ensure such supervision then they can not reasonably use that as an excuse in breaking a signed contract.
In backing up my point I’d like to mention a situation which arose a few years ago. I’m going from memory here so everything I’m writing may not be entirely factual.
Basically a large computer manufacturer wrongly priced an item on its UK factory outlet site. I’m pretty sure that it was something like a 19” TFT monitor (that was a big screen at that time!). In essence the retail price on the product was fairly high, over a grand if my memory serves me. They advertised it for £300 odd. Needless to say word spread like wild fire across the BB’s. Like most of these ‘good deals’ the company soon spotted their error and removed the offending offer. However, in the interim period many sales had been made. Many rumours abounded that customers were not going to get their goods as per the contract. In the end I believe that they had to honour the sales which had been agreed. Someone on one of the boards stated that they had contacted their credit card company’s legal department to have them chase the issue. It turned out that the company in question had billed the card for the £300 at the time the deal was struck – this is the nature of transacting online. The credit card company stated that the billing of the card indicated that the company had contracted with the customer at the advertised price and regardless of reasoning the company where not in a position to break its agreed contract.
Simon, I take on board you point regarding how Capital prices its markets. I have to say that you do have a very impressive reputation – long may it continue. You have stated that you do not bias your prices and I obviously accept that comment. I was, in my earlier post, just pointing out that certain companies do reserve the right to bias their markets – I didn’t mean to suggest that all companies acted in that way.
Jonny….
Regarding BETTING….As I already mentioned, under section 412 of the Financial Services and Markets Act of 2000, all spreadbets are legally enforceable. This effectively amends the basic laws surrounding ‘bets’ which were previously unenforceable. In essence a ‘spreadbet’ as you know it is actually a CFD or Contract For the Difference. On that basis their legal obligation is far greater than that of a ‘Bookie’.
Okay, time to get off my soap box!
Steve.
Good input. It’s always good to hear the ‘other side’ of the story. It obviously provides a far more balanced argument.
I’d just like to make a few points in response to your comments.
Firstly, when the thread was started by Jimbo, he was asking for ‘clarity’ on what his actual position was. His legal position is effectively the ‘lowest denominator’ – the points of law which would settle his case. I grant you that it is unlikely that any company would ever go that far in an attempt to enforce their contract – there is no way that any large FSA regulated company would risk having such a court judgement go against them as a potentially dangerous president would be set.
Secondly, I understand your point surrounding stops etc. A customer is obviously going to be pretty annoyed if they were stopped out due to an erroneous spike caused by a bad price which came from the exchange feed. I think however, in the context of this thread, Jimbo was referring to an opening order on a price which was simply wrongly derived. Maybe he would like to further clarify this point. If my suspicion is correct then we are clearly talking about two types of pricing error. The first type is the error which you have referred to; the bad price from the exchange – This is clearly a pricing error which is beyond your company’s control. The second type of pricing error is slightly different. In Jimbo’s case it could be that the error was caused by a miscalculation on the company’s part – a company may use incorrect mathematics in establishing their advertised price - in such a situation it could be demonstrated that the ‘error’ was within the company’s control as apposed to an error which is ‘beyond the company’s control’. On that basis it would be harder for a company to break the contract. At the end of the day it is not unreasonable for a customer to claim that they just bought a product where the saw it advertised most cheaply – To further use your car analogy, if you had three garages close to your home which all sold the same model of car then you are most likely to buy your car from the garage which offers the best deal – why is it any different when a customer compares the different prices for entering a deal on a ‘derivative product’? Remember, a buyer is buying because he sees ‘value’ – its efficient market hypothesis.
Thirdly, your point on the Rolls Royce – I feel that you maybe incorrect in what you have stated. I have studied certain aspects of law over different periods of time. In the example you gave you mentioned a wrongly priced car. The law appears reasonably clear on this subject. When goods are offered for sale they can be ‘priced’ – a label can be attached to the product indicating a price at which the seller maybe prepared to deal at. This is legally known as an ITT or ‘Invitation To Treat’. Legally speaking, when the customer wants to buy the item he or she makes ‘an offer’ to buy the item at the price indicated – it is then up to the seller to accept or reject the ‘offer’ as he / she see fit. In your example you have suggested that a ‘junior salesman’ has accepted the customers offer to contract at the advertised price. Obviously with your use of the word ‘junior’ you are implying inexperience. This does not however alter the company’s legal obligations or the obligations of any contract which the salesman negotiates on behalf of his company. In such a situation the company should take reasonable steps to ensure that it’s ‘junior’ staff are adequately supervised. If they fail to ensure such supervision then they can not reasonably use that as an excuse in breaking a signed contract.
In backing up my point I’d like to mention a situation which arose a few years ago. I’m going from memory here so everything I’m writing may not be entirely factual.
Basically a large computer manufacturer wrongly priced an item on its UK factory outlet site. I’m pretty sure that it was something like a 19” TFT monitor (that was a big screen at that time!). In essence the retail price on the product was fairly high, over a grand if my memory serves me. They advertised it for £300 odd. Needless to say word spread like wild fire across the BB’s. Like most of these ‘good deals’ the company soon spotted their error and removed the offending offer. However, in the interim period many sales had been made. Many rumours abounded that customers were not going to get their goods as per the contract. In the end I believe that they had to honour the sales which had been agreed. Someone on one of the boards stated that they had contacted their credit card company’s legal department to have them chase the issue. It turned out that the company in question had billed the card for the £300 at the time the deal was struck – this is the nature of transacting online. The credit card company stated that the billing of the card indicated that the company had contracted with the customer at the advertised price and regardless of reasoning the company where not in a position to break its agreed contract.
Simon, I take on board you point regarding how Capital prices its markets. I have to say that you do have a very impressive reputation – long may it continue. You have stated that you do not bias your prices and I obviously accept that comment. I was, in my earlier post, just pointing out that certain companies do reserve the right to bias their markets – I didn’t mean to suggest that all companies acted in that way.
Jonny….
Regarding BETTING….As I already mentioned, under section 412 of the Financial Services and Markets Act of 2000, all spreadbets are legally enforceable. This effectively amends the basic laws surrounding ‘bets’ which were previously unenforceable. In essence a ‘spreadbet’ as you know it is actually a CFD or Contract For the Difference. On that basis their legal obligation is far greater than that of a ‘Bookie’.
Okay, time to get off my soap box!
Steve.
[
One can trade with give and take, provided one's broker also gives, but if there are repeated phone calls "the price was wrong" to one's detriment, then it's time for a different broker, or a regulator/court case, and I'll submit that contracts are different and second to law.[/QUOTE]
True, but how many times have you seen a price obviously too low and sold? Obviously the majority of such 'errors' are going to be against the bookie. If the bookie never came back in the punter's favour, that would be something for the FSA - palpable error has to work both ways, but you wouldn't expect there to be too may occasions when they would.
As a broker rather than a market maker, your futures broker cannot legally take advantage of a price improvement. He has to pass it on.
One can trade with give and take, provided one's broker also gives, but if there are repeated phone calls "the price was wrong" to one's detriment, then it's time for a different broker, or a regulator/court case, and I'll submit that contracts are different and second to law.[/QUOTE]
True, but how many times have you seen a price obviously too low and sold? Obviously the majority of such 'errors' are going to be against the bookie. If the bookie never came back in the punter's favour, that would be something for the FSA - palpable error has to work both ways, but you wouldn't expect there to be too may occasions when they would.
As a broker rather than a market maker, your futures broker cannot legally take advantage of a price improvement. He has to pass it on.
Jimbo57, goin back to the original thread...get rid...GET RID! Thats the most absurd post i've ever read on here! Finspreads, stunt masters of the finest! If your not with 'em they cant 'roll you over'! J57, FS love you for takin' that one where the sun dont shine!
