Which Spreadbet broker ?

ivorm

Well-known member
I'm looking to open an account with a Spreadbet broker. I'm hoping that the experienced guys here can give me some advice as to which one I should use.

CMC looks attractive 'cos of the small spreads and 'rollover' bets. But I seem to feel that there is a lot of negative feeling towards them.

I'd be very grateful for any advice given.

Regards,
 

FTSE Beater

Experienced member
Hi Ivorm

Welcome to the boards

May I ask what you will be trading, and how much capital you are depositing. To me this really decides which spreadbetting company to go for.
 

CountDino

Newbie
Finspreads ok for small bets and swing trades on qtrly basis otherwise horrendous spreads

CMC the only choice for dealing at the market and cant say I have any complaints.

Heard lots about IG stopping Internet trading when the market is poised to move!!!

Fins also known to do this.

So if you want totrade online CMC probably best but you need a reasonable spec PC - 128 MbRam Min
 

sltsang

Junior member
Hi,

All SB co's are the same IMO, I have complaints on them all lol but CMC has the smallest spread and their server is reliable. Don't know if it's true but at Fins I heard the minimum stake for new customers is £1 now, might as well open an account at CMC for SBing
 

ivorm

Well-known member
Hi Guys,

Thank you for your replies.

FTSE Beater (like the name BTW) : I intend to trade the indexes initiallly (DAX, DJ, FTSE). It would be nice to have the option of trading other markets in the future, I guess.

I'm lookking to deposit about 1K to start.
 

FTSE Beater

Experienced member
Hi Ivorm

If your looking to trade the indicies, then your best bet IMO would be Fins. You have to watch the spread though as the bias can be quite wild at times.

HTH

All SB co's are the same IMO, I have complaints on them all lol but CMC has the smallest spread and their server is reliable. Don't know if it's true but at Fins I heard the minimum stake for new customers is £1 now, might as well open an account at CMC for SBing
Hi sltsang.

I think new customers at Fins can trade from 1p a point, but that's only for the first 8 weeks - sort of a "get to know the system" time.
 

options

Senior member
Here's an update on the situation at Fins.
They will be doing away with the 1p-49p internet trades.
All new customers are being signed up for 'The Acadamy' (lol)
that lasts for 8 weeks, during which time you can trade from a 1p a point. After that the minimum is 50p.
They are going to be phasing out the small stake trades and have a blanket minimum of 50p.
So existing customers be warned.

By doing this they are making themselves worthless to trade with imho because of the wide spreads and treacle like speed of their site, plus all the other dirty tricks that they (and all the others) get up to.
So the best sb to trade with would be... none of 'em.
But if you have to sb then cmc seem to be the best of a rather badly policed (by the fsa) bad bunch.

If you can, put a bit more into the trading account and go with someone like IB, who have direct acccess, you'll pay tax on earnings but benifit from much tighter (real) prices and instant trading. No being held up while the dealer finishes his coffee. More importantly you will earn more money because of the tight spread.

All the best.

Options.
 

sltsang

Junior member
Hi FTSE,
I found Fins harder, especs the last time when their server went down and I lost a packet.
All SB co's bias the quotes, Trading Indices are worse, after all they need to do that cause of the volatility and to make sure they make money as well.


Hi Ivorm,
Fins spread for DJ is 8 pts, the bias is just as bad as CMC's 6 pts if not worse, whoever you choose to trade with, Good Luck !, if you get experienced enough, I surgest opening a direct access account, eg : IB.
 

ivorm

Well-known member
Hi FTSE B,

>>If your looking to trade the indicies, then your best bet IMO would be Fins. You have to watch the spread though as the bias can be quite wild at times <<

What do you mean by "the bias" ?

Regards,
 

options

Senior member
Not so wild example.

We close at 4998 on a tuesday night.
America has terrible news. Insider trading, accountancy scandals, collapse of a major bank through bad debt. Their star trader turns out to be a short sighted colour blind illigal immigrant who has just been found out to have lost 26 billion dollars on a bad trade.
USA close down 350 points amid a sea of red screens. (For the star trader he sees this as green so everythings okay to him.)

Now the whole world knows that when we open in the morning we are going to drop like a 25 stone skydiver. Even my cat wants to put a trade on.

Markets open at 4970 and dropping fast. You try to go short but the sb's are in front (of course) and are quoting 4940/4949.
(wider spread due to the volatility).

You've just lost any advantage you may have had.

What do you do?

Go short and the market will hang there then bounce straight up again.

Take a long and the market will hang, bounce up and then dive down. (Of course you have already been scared out of your first short because you were £200 down and losing by the second and now your wondering which way to go).


So, if the market moves quick in one direction the sb's are already there, trading above (or below) the actual market price.

In normal trading, say the market is at 4856 and rising, sb's may quote 4855/4860 then when the market dips back they will reverse the price bias to always be in their favour.

Difficult to day trade slightly easier to trade over say 2/3 days.

Welcome to the world of spread betting. Hope you have b***s of steel.

Good luck.

Options
 

ivorm

Well-known member
Hi Options,

Hmmmm. I'm beginning to think that this isn't as easy as I thought !!

Is this why nobody has replied yet to the other thread I started -"Spreadbetting: Anyone making money ?" ?

BTW, does that star trader you mention really exist ? :)
 

options

Senior member
Didn't see the other post otherwise I would have replied and told you that loads of people are making money, they're called market makers and spread bet owners, lol.

Star trader? well I had Nicky Leason in the back of my head while writing that. The guy that broke Barings bank. (Though It isn't him. Honestly; Mr Leason's lawyers). I'm fairly sure he's not colour blind either. Though I'm sure there are people out there who could tell some tales about star traders.

I like Nick anyway. I think I was on the other side of his trades. lol.

And if it was that easy everybody would be rich.

You have a long road ahead and you have to serve an apprenticeship. If you can put in the time and understand, then it's a good game.

Start off small, learn to lose first off,and don't get overconfident with lucky trades.

Good luck.

Options.

PS. If you can pop into the trading rooms, you can get some good advice in there, although no one can tell what to trade and they can't tell you when to trade.
 
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FTSE Beater

Experienced member
Hi Options

I have a question regarding futures and your example. :confused:

Surely the futures traders would be in the same position as the Spreadbet traders? - after all Spreadbetting companies only base their prices on Futures markets.

As always, I bow down to your superior knowledge :)
 

CountDino

Newbie
S/B companies generaly base their daily Index bets on the near month future and (so I understand) bracket the last traded price with their spread of 6 pts or so - if you are getting a bigger spread during market hours then go elsewhere - factor in the S&P futures (if trading the Dow) and this swings the bias up or down.

The futures traders are generaly wise to the direction of the market and likely reversal points., such as supprot and resistance trading curbs etc.

If you watch the futures prices at the same time you can see when they are not sure which way the Cash market is going (or they are not prepared to lead it).

The advantage of CMC is the constantly updating prices and (on small bets) generaly instant deal confirmation. Fins do not even quote the price until you press trade so you can lose 10 pts while you wait.

Best option on US indices is probably the S&P because you can follow the S/B price using Lycos free charts Code is ES02U for emini S&P which says delayed but isnt.

Whatever you do have a plan before you start and trade small, if you win great but at some point you will have to pay for your education so best not to spend (lose) too much on it.

Remember they aint giving money away.

Good luck
 

tjbw

Member
ES02U is the emini S&P Sep futures contract, this has now rolled over to December which is ES02Z

Thanks to dippers for bringing this to our attention in the trading rooms.

Barry
 

options

Senior member
Oi FB, less of the sucking up. Lol. Or I'll be banging my head as I go through doors.
Not superior knowledge m8, I just choose the futures because it normally means I only have to look 2 to 4/5 charts at the same time. You choose the shares and are good in your understanding and more importantly, trading of those charts. Now we both owe each other a pint when we meet up. Lol.
One guy I know from when I used the Updata software used to have around 36 charts open at the same time. Now that would scramble my brain. He was a bit of a high roller and his share broker allowed him to short shares long before it became fashionable to do so simply because he traded large and often.
I remember a big daily drop on the ftse after a few days of heavy buying and rises. And the day in question was on a Updata presentation day (ask Pat about this (Obi) he and Shane were speaking that day at Brighton. Anyway this guy stands up to speak. He wasn't presenting that day, just in the audience. But was asked a question by the guy that owns Updata, David Linton.
So this guy stands up and addresses the audience and says "Today wasn't a very good day trading day for me I lost £40,000.
(I think it was 40, might have been more)
Then he laid out, how he traded.
I spoke to him in private after the presentation was over and my first question was 'why?'
At first he simply said 'I f****d up' (Apologies for the language, but after losing that amount of money in a day I reckon he is entitiled to swear).
I asked him again and he said he had so many charts open he couldn't close all his trades quick enough and he had trouble getting through to his broker. Each trade had to be closed off one by one. (Note that he said he messed up. He didn't blame the market, or his broker or the wife. Nor anything else. (though the broker was in my opinion, a party to shoulder the blame)
He said he should have seen it coming but got too greedy.
Don't feel too sorry for him though, he made bundles on the 3 previous days.

Anyway after all that. I think I follow your question FB.
Yes, on days when there is a large gap on opening, the proper futures will go the same way as the sb's. But...
They may not gap as much as the sb price and in general have to journey down (or up).
On days like the example both sb's and real you would have no chance of trading it because it's there before you, so you would lose those first few minutes, and sometime not have the chance after that either.
(Though if you had held an overnight position you would be laughing your socks off...or crying in your milk!!!)

You can have some fun though when the real price does journey down or up. Either trade that or take the opposite on the sb as it has to swing back to come in line. It's great fun when the sb's get screwed up. doesn't happen often enough though.

I get particular enjoyment when they (sb's) predict an opening direction and get it wrong, and I have already decided to go the other way and trade the second the market opens.

Have noted one comparision though.
In the late afternoons when there is little volume in the real market and less trading taking place. The real spread can sometimes be wider. So the sb price is only out by 1 or 2 points.
So you can get a better feel for the real market. But of course both real and sb are prone to wild jumps and in my view is harder to trade as the market is manipulated around. (So much for real electronic trading. Big buys and sells get triggered and it screws everything up.)

Good Fortune.

Options.
 

BrianT

Junior member
As a newbie I would like to know the best S/B Broker when it comes to margin requirements. From reading the other posts I assume that CMC are the most reliable. What is their margin requirement for UK markets/instruments? Was going to go with Finspreads until I read the above.


It was late! ;)
 
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mmillar

Guest
I'm with FTSE Beater.

I got an S&P Futures feed from an American broker to check the prices against CMC Deal4Free - they were exactly the same, tick for tick. Futures prices are MUCH more volatile than cash prices so you have to be aware of this. The only 'problem' with spreadbetting companies is that they don't use cash prices even for their cash products, they just do futures-10 (for example) to get an approximate cash price. Which means in times of volatility their 'cash' price bounces all over the place with the future and doesn't match the real cash price.

We all love to blame the broker, but ultimately if you don't accept responsibility for your trades then you are not going to learn.


In answer to the original questions I think D4F is the best spreadbet company (having also dealt with FinSpreads and Cantor) because their spreads are better, their NTR/margin requirements are smaller, they are faster and their software is much more professional and more reliable. Their customer services is atrocious but, hey, you can't have everything.

BrianT - I really, really hope you are talking about margin requirements rather than margin calls. The margin requirement (or NTR on indices) is usually smaller for D4F, though this isn't necessarily a good thing for beginners. A margin call is when a nice person phones you up and says you have lost all your money!

Worse still.... " er... you now owe us another £10,000 or we will liquidate you immediately, and you will STILL owe us another 8 grand!"
added by ChartMan
 
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neil

Legendary member
Brian T

I hope you didn't mean "Margin Call," thats a situation a trader should never get himself into - because he uses a STOPLOSS.



:)
 
 
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