Why does spread betting include slippage?

[b0lty]

BSD, I opened a demo account with IG yesterday for this reason. Wanted to compare the FTSE 250 quoted real-time from Google Finance alongside the values shown by IG. They did correlate on the demo account. Whether that translates to a live account and the price you get quoted I have no idea.

I guess if I do open a live account it'll initially be with the intention of testing out my concerns. Deliberately trying to trigger slippage scenarios where it's clear the broker will gain from my loss, just to see how far they'll go. I'd rather lose a few quid testing out the broker early than my whole account later down the line.

Thanks for your info Mike. I hope spread betting firms I try will turn out to be ok. I've read plenty of articles for and against their methods. Some state these firms just want you to lose. Others point out that it's not always worth their while to act like that.

 

[BSD]

Well I certainly wish you the best of luck Bolty, but keep the warning of the US regulatory body CFTC in mind:

"In disclosure statements mandated by the U.S. Commodity Futures Trading Commission, customers are told upfront that such currency trading isn’t carried out on regulated exchanges.

“WHEN YOU SELL, THE DEALER IS THE BUYER. WHEN YOU BUY, THE DEALER IS THE SELLER,” the CFTC warning reads in capital letters. “As a result, when you lose money trading, your dealer is making money on such trades.”
http://www.bloomberg.com/news/2015-0...y-trading.html

If you can I'd always trade futures. No hanky-panky there from brokers.

 

[mike.]

Thing is how do ya know that when all you see is the price your spreadbetter quotes you and unless you're paying for real time quotes from the real exchange which is the only way to get the real price in real time ?

Like i mentioned earlier, if you notice neg- slippage on a regular basis and no pos- slippage, Ether take it up with the broker ( back up your evidence from a third party chart ) or change brokers. No clients= no business.

 

[b0lty]

Thanks for your help. 'Food for thought.

 

[tokyojoe]

Well I certainly wish you the best of luck Bolty, but keep the warning of the US regulatory body CFTC in mind:

"In disclosure statements mandated by the U.S. Commodity Futures Trading Commission, customers are told upfront that such currency trading isn’t carried out on regulated exchanges.

“WHEN YOU SELL, THE DEALER IS THE BUYER. WHEN YOU BUY, THE DEALER IS THE SELLER,” the CFTC warning reads in capital letters. “As a result, when you lose money trading, your dealer is making money on such trades.”
http://www.bloomberg.com/news/2015-0...y-trading.html

If you can I'd always trade futures. No hanky-panky there from brokers.

BSD is on the ball with this, I've found the only way to stand a chance with SB route is with momentum (or very wide stops...hmm, still cannot do this myself) if you learn to pick your spots you will be carried with momentum, the SB cannot go too far from DMA price within market hours, they would be leaving themselves wide open to arbitrage

They are spivs, their prices are their own to a degree, much caution is needed, but others have found a way to deal with it.

You seem to be quite inquisitive Bolty, an absolute "must have" attribute in this game

good luck

 

[b0lty]

Thanks Tokyojoe. I was burnt once before with Forex many years back, so learnt the hard way that diving in is a great way to lose all your money. That and allowing your emotions to have the slightest influence on your strategy.

Intend to automate the decision making this time around. Just nervous that a spread betting company will render any strategy worthless by manipulating things too much.

 

[tomorton]

BSD is on the ball with this, I've found the only way to stand a chance with SB route is with momentum (or very wide stops...hmm, still cannot do this myself) if you learn to pick your spots you will be carried with momentum, the SB cannot go too far from DMA price within market hours, they would be leaving themselves wide open to arbitrage

They are spivs, their prices are their own to a degree, much caution is needed, but others have found a way to deal with it.

This is corect I believe and not following this guidance is the reason many new traders fail - you can't scalp or micro-trade in SB, the companies offering the book see you coming, they will kill you.

Failure of this sort is a fundamental mistake by UK newbies who read about scalping and daytrading as per the US experience, and assume the same thing can be done in the UK through SB. SB doesn't exist in the US, where most literature and web guidance on trading originates, so you can't do what they do and expect the same results.