Will spreadbetting companies cancel your account if you are too successful?

[SuddenDeath]

Dear £10kLoser I checked out your homepage, very nice photos of malta

 

[capitalspreads]

i feel that i must comment here on absolute falsehoods placed here by hot property.

nearly all stops (over 99%) at CS are filled at their requested levels. FACT

we certainly do not assign account managers to anyone at all. We do not even notice the vast number of trades going through as they do not affect our overall risk models. FACT

We never (that is NEVER) fiddle around with prices on our platform. All prices come direct from exchanges and go through our price engine which calculates the price put out to clients. This price is not affected by our position in that market. FACT

I have two dealers watching risk levels not watching market prices ... we quote over 3000 markets do you really believe they have time to 'adjust' prices on individual markets.

We have never closed a client for being a winner FACT
we merely go into the market and match their trades

We cannot 'move the market' to harm clients... the money needed to move a market even a pip is far too much to warrent the tiny extra profit.

Simon

 

[SuddenDeath]

thanks Simon, its nice to hear from someone in the industry.

 

[hot_property]

Hi Simon,

Thanks for the article. You mentioned you never move spreads/prices. Do you have a button to increase spreads when the market goes into panic mode or there is too much buying or selling? 'Widen spreads'?

Also do you not adjust the 'Gain' on your prices by a few points in the day?

Also do you have any software running to monitor loosing account and winning accounts?

Just an interesting question, you say your trades are still manually accepted, do traders shout to each other "You loose 50 voda's", this is normal practice.

Interesting...article thanks for that.

 

[hot_property]

I have a file / image somewhere that shows the price of the DOW spiking up when there is news, but the SB firm (not Capitalspre...) slams the price down for 2 seconds in the opposite direction then slams it up. I know peple that trade £3k a point, a few points would be worth £12k+

Not directed at Capitalspreads but you maybe able to kindly answer, how does a firm like you make money? do you just make money on the spreads or on the people that loose trades?, no offense intended, you do not need to answer if you do not wish...no probs...have a nice day

 

[Hoggums]

I have a file / image somewhere that shows the price of the DOW spiking up when there is news, but the SB firm (not Capitalspre...) slams the price down for 2 seconds in the opposite direction then slams it up. I know peple that trade £3k a point, a few points would be worth £12k+

Not directed at Capitalspreads but you maybe able to kindly answer, how does a firm like you make money? do you just make money on the spreads or on the people that loose trades?, no offense intended, you do not need to answer if you do not wish...no probs...have a nice day

But surely if you see that happening - you could take advantage of it and bank a quick profit. These so called spikes work both ways. You can't artificially move a price one way and not expect the sharp eyed traders to take advantage. I can't see how SBs could realistically include this as a tactic. Word would spread and everyone would be sitting waiting for the SBs next manipulation so they could bank a few guaranteed pips because the SB is quoting the wrong price.

 

[£10kLoser]

I know peple that trade £3k a point, a few points would be worth £12k+

£3k a point? That's a bit OTT. Certainly no spread bet co would allow anywhere near that. With daily moves around 100 points, that's around a quarter of a million pounds a day. You have some rich friends...

 

[capitalspreads]

i just commented on this platform to make a point

i normally comment on the CS thread.

CS makes its money by running a risk book... we just accept nearly all trades whatever is going on. Most trades just go through the pricing engine with no dealer intervention but if a trade is in a size greater than a pre-determined amount (i.e 20 quid in the FTSE) or from an account assigned as dealer acknowledged (about 100 clients out of 22K) then a dealer will have to approve the trade.

Once the risk level gets above a certain level then we will start to hedge in the market. Other than that we just let clients get on with it. We get so many trades buy/sell/buy/sell etc etc that we effectively become 'the market' and we make spread all day long.

As with all bookies sometimes we lose but mainly we win... it is nothing to do with how we act towards clients or any dubious practices. It is just volume of flow. In the same way that when you see an FX platform and the liquidity is provided by the quoting banks. They just provide the ability to trade. They are not interested in the long run where the market goes they are just interested in getting the deal flow. Of course sometimes they will do well if clients are the 'wrong way round' but then occasionally they will be hurt when traders get it right.

I am not going to say that we never increase the spreads because we did on Jan 22 (we put FTSE 100 to 2 pips from 1) but even in the most violent of markets our quote on the equities/commodities/currencies/bonds and the vast majority of indices remained the same. As have our margin requirements (3% on FTSE100 5% on FTSE 250) even though many of our competitors increased theirs to 20/40 even 50% when the going got tough.

We do have our detractors I know but given the overall market conditions of the last year our clients have always been served exceptionally well.

we do not have software 'running' to identify winning and losing clients. At the end of each month we make an anaysis of all clients to identify the best traders and then we might term them as 'marked risk' if they are trading in serious size. we will then match them in the market... i.e. if client abc123 buys £50 oil we then go and buy the equivalent contracts in the market. We do not reject his trade and buy the contracts. We fill the client and then hedge.

We do not adjust the 'gain' on our quotes to reflect our positions. If we are unhappy with our risk we just buy/sell the underlying instrument in the real market. No problem.

£3K a point is rare in markets like the FTSE or Dow (but they do happen) they are more usual in markets like Vodafone, smaller commodities or interest rate products

As I mentioned i do not normally comment on other threads if you want to ask direct questions of policy etc then please visit the Capital Spreads thread

Simon

 

[tar]

As have our margin requirements (3% on FTSE100 5% on FTSE 250) even though many of our competitors increased theirs to 20/40 even 50% when the going got tough.
Simon

He means Ftse100 shares not the index .

Capitalspreads and other spreadbetting companies earn money from :

1- Losing trades , 80% of clients loses money .
2- From spreads , we pay spread , and they earn spread , in another word they r saclping few granteed points a trade ,for thousands of trades daily !

 

[capitalspreads]

tar

exactly .... we run a risk book against client positions.... but we do nothing to affect client activity ...we neither recommend nor disuade any client from any trade.... nor do we EVER attempt to influence the underlying market to counteract any client position.... all we ask is that they have the required margin available to make each trade.

oddly enough the operational P/L generally works out at around 60% of the spread on each and every trade but sometimes the clients get it right (today is a very good example) and sometimes they get it wrong (yesterday was, likewise, a good example). The lesson over the last two days is that you should always ensure that you have sufficient margin available to counteract a small adverse move. Our clients are massively short of FTSE and long of Sterling/Dollar .. yesterday was quite painful but the vast majority held their positions and today they have made it all back and more. If a client had too little resourses available yesterday he would have been stopped out only to be cursing his luck today.


Simon

 

[gle101]

I have a file / image somewhere that shows the price of the DOW spiking up when there is news, but the SB firm (not Capitalspre...) slams the price down for 2 seconds in the opposite direction then slams it up. I know peple that trade £3k a point, a few points would be worth £12k+

Not directed at Capitalspreads but you maybe able to kindly answer, how does a firm like you make money? do you just make money on the spreads or on the people that loose trades?, no offense intended, you do not need to answer if you do not wish...no probs...have a nice day

I have been trading with CS for 3 years, I have never seen even small spikes against you. I compare the SB feed against the live future exchange feed.

 

[tar]

I have been trading with CS for 3 years, I have never seen even small spikes against you. I compare the SB feed against the live future exchange feed.

maybe u missed the spike

 

[gle101]

But surely if you see that happening - you could take advantage of it and bank a quick profit. These so called spikes work both ways. You can't artificially move a price one way and not expect the sharp eyed traders to take advantage. I can't see how SBs could realistically include this as a tactic. Word would spread and everyone would be sitting waiting for the SBs next manipulation so they could bank a few guaranteed pips because the SB is quoting the wrong price.

I absolutely agree with you. It would be a foolish and dangerous game, if practiced by the SB.

 

[gle101]

maybe u missed the spike

There have been one or two misquote. These has been corrected after contacting the CS support service. If you don't have a live feed to compare against the SB feed, you are not on solid ground. One must be able to prove if a spike occurs, by looking at the real market feed. Saying it has been a spike, without any kind of proof, is not a good way to present ones case against the SB company in question.

 

[hot_property]

HI there everyone,

Thanks Simon for your post, the information you post is exactly how a 'Clean Operation' would work and is a text book example. Good.

10kLoser, £3kpp is nothing for some of the people I trade with, one chap did £5k pp on a VOD short for 4p. This trader hardly pays a spread because the firm he is with goes direct to the market and buys on the sets board and converts the CFD back to a spreadbet contract, therefore the spread that these companies give can all be bypassed.

Hoggums, what you say is not true (not trying to be rude or anything). The spike down in the opposite direction happens too quick, unless you have an order there you cannot trade 'that' price. If you try to trade it you will be rejected. If you call the firm to verify this, they will say something like "Sorry sir it was Touch Price, the market showed no volume there to get you inn'. Basically, they give you no grounds for questioning. Basically, if there was no volume there, I wonder "Why did they put that price on their platform"? I know why because the market had a lot of stops at that price. Basically I am talking deep Market Maker Theory.

I am fascinated about people on this forum (as a whole on the whole website). So many people think the markets are where the 'good guys trade'. But really its all manipulated and information about this is suppressed, this is why people think its a good place to trade and make some money on the side, when you can only make money if your in the top 5% of traders. Over the life cycle of an account only 5% will win, forget 80%! its 5% I know this.

Did you also know the people that the people that bet on Sports cain the firm but on finance they loose. This is because Sports is less rigged. Think about it, finance you have 2 bets up or down, sports you have 8+ horses running (8 choice).

tar made a comment, and he was correct, the firms make big money on loosers, on about 2000 accounts the firm makes cash revenue of about £1million a week. Depending upon the market conditions....but at least, at least £1million a month. You will never hear this info anywhere again. Not on any website no where.

Can I ask you ALL a question, "Do you think the market is rigged"? if not why not, if yes why yes...

 

[gle101]

HI there everyone,

Thanks Simon for your post, the information you post is exactly how a 'Clean Operation' would work and is a text book example. Good.

10kLoser, £3kpp is nothing for some of the people I trade with, one chap did £5k pp on a VOD short for 4p. This trader hardly pays a spread because the firm he is with goes direct to the market and buys on the sets board and converts the CFD back to a spreadbet contract, therefore the spread that these companies give can all be bypassed.

Hoggums, what you say is not true (not trying to be rude or anything). The spike down in the opposite direction happens too quick, unless you have an order there you cannot trade 'that' price. If you try to trade it you will be rejected. If you call the firm to verify this, they will say something like "Sorry sir it was Touch Price, the market showed no volume there to get you inn'. Basically, they give you no grounds for questioning. Basically, if there was no volume there, I wonder "Why did they put that price on their platform"? I know why because the market had a lot of stops at that price. Basically I am talking deep Market Maker Theory.

I am fascinated about people on this forum (as a whole on the whole website). So many people think the markets are where the 'good guys trade'. But really its all manipulated and information about this is suppressed, this is why people think its a good place to trade and make some money on the side, when you can only make money if your in the top 5% of traders. Over the life cycle of an account only 5% will win, forget 80%! its 5% I know this.

Did you also know the people that the people that bet on Sports cain the firm but on finance they loose. This is because Sports is less rigged. Think about it, finance you have 2 bets up or down, sports you have 8+ horses running (8 choice).

tar made a comment, and he was correct, the firms make big money on loosers, on about 2000 accounts the firm makes cash revenue of about £1million a week. Depending upon the market conditions....but at least, at least £1million a month. You will never hear this info anywhere again. Not on any website no where.

Can I ask you ALL a question, "Do you think the market is rigged"? if not why not, if yes why yes...

Are you sure you are referring to the SB industry as of today. I just haven't experienced it. And I have been constantly monitoring the SB feed against the live exchange feed for 3 years. Where is the proof hot_property, without it you have no case. There are some technical feed errors, but that is another issue altogether.

 

[gle101]

tar made a comment, and he was correct, the firms make big money on loosers, on about 2000 accounts the firm makes cash revenue of about £1million a week. Depending upon the market conditions....but at least, at least £1million a month. You will never hear this info anywhere again. Not on any website no where.

Can I ask you ALL a question, "Do you think the market is rigged"? if not why not, if yes why yes...

Futuresbetting.com didn't make it. You have to have a good platform, competitive spreads, high volume, slimed organization and a functional risk management strategy in order to be successful in this highly competed industry.

The real market is not "rigged" but it is manipulated in various ways, e.g. timing of up and downgrading of companies and such.

 

[Lee Shepherd]

HI there everyone,

10kLoser, £3kpp is nothing for some of the people I trade with, one chap did £5k pp on a VOD short for 4p. This trader hardly pays a spread because the firm he is with goes direct to the market and buys on the sets board and converts the CFD back to a spreadbet contract, therefore the spread that these companies give can all be bypassed.

Wow thats some hefty costs the 'people you trade with' are playing with.

I dont know of any companies that allow this kind of size, maximum (over phone, less on web) for vod with fins/city index is £1k, of course this can be reviewed over the phone, but £5k and 'nothing to these people'. wow.

Let me just work it out.

vod(vodaphone) is around £161 a share so £5k (spreadbetting as you say) would mean (aprox) 161 x10% = 16.1 x 5000 = £80k for margin on a rolling contract or the equivalent of trading with £805,000 pounds worth of stock. If they pay no spread then how does the spreadbet company hedge themselves against ANY movement whatsoever.
To maintain the account you have to have a bit more than a few quid in play.

I dont necessarily call into query the amounts as this is (I suppose) possible but SB's make their money through the spreads. No spreads, no commission, no interest means no money for the company and only 100% risk against the trades they have to take, not to mention them having to pay commission, stamp duty and tax.

If this is true what you say then I (like others) would be extremely interested in knowing which firm, thats all I ask, what company does this?

Being an ex stock trader for many years before moving over to SB indices would have no problem moving back. One of the main reason's for switching over was the stamp duty, commmission and tax.

Please, if you dont know already then please ask what firm it is.

 

[hot_property]

Hi there Lee, the firm is MANN Group. They are hardcore. The bet is not completely spreadfree but much lower than Capital spreads. You need to know the chaps there to trade big.

Someone said 800k is an equivalent size of £805k of stock and I am wondering, and yes what is your point? This size is available on VOD for most of the day, and if it is not the trade is broken up and fed through the computer system to achieve your exact price with your variance parameters. You select your criteria and you will not get a rejection, its all to do with the immediacy you need the stock and how much your will the stock to be broken up by over various prices. We don't trade this size all the time, but when there is only 1 setup. This setup on VOD is 100% guaranteed, no not 99%, 100%. You need level 2 and 3 and the exact price to do the trade, it happens about 3 times a year.

When you have brought @ market via DMA the firm does not care what you do, they have made their commission and walk away. You can also get t10 settlement, forget margin! there is none!

I can provide a chart if I can find it when DOW went up and the firm slammed the price then moved it up.

Someone on the thread said, these can be technical errors...ok if they are technical error do you automatically refund people account? give me a break..!

Have people seen GFT Global Platform? it will smash anything out there to bits! serious, serious platform. This is hardcore, check it out. .....get a free account to dummy trade. You can even select the slippage if you are trading in a fast market. Good platform, they also supply tick by tick data. No firms supply this (although its on their server) as with this data you could test multiple algorithms and build systems with 80+ accuracy easily.

Do any of you chaps apply physics or fractal studies to your systems?

Also, please note, this is an article and my opinion, I am not out there to sell you something or make you believe this is good and that is bad, you can think whatever you like....

Cheers
H_P

 

[Lee Shepherd]

Thanks, will look into it.