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

[gle101]

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

"I can provide a chart if I can find it when DOW went up and the firm slammed the price then moved it up". Yes please do present facts, what firm are you talking about? Well, there are technical errors and should not be consider to be adminstrated spikes against you.

GFT might be ok, I like the user predefined stop loss facility. However, the wide spread on the FTSE is not to my liking.

 

[£10kLoser]

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.

Yes, I thought you were meaning £3k a tick on the FTSE index!

 

[hot_property]

The wide spread you get is usually the price your trade will be filled at, they don't try to cheat you and add slippage at the other end.

I will look deep into my computer and find the screen dump I took of the price manipulation. IT was not a technical error as they took my money (and probably others) and have not returned it. I will not tell you who it was as it is in investigation mode.

As I said before, I don't care if you believe me or not, its upto you

But the image will answer your comment....watch

 

[gle101]

The wide spread you get is usually the price your trade will be filled at, they don't try to cheat you and add slippage at the other end.

I will look deep into my computer and find the screen dump I took of the price manipulation. IT was not a technical error as they took my money (and probably others) and have not returned it. I will not tell you who it was as it is in investigation mode.

As I said before, I don't care if you believe me or not, its upto you

But the image will answer your comment....watch

I have not experienced big slippage problems with 1 point spread, so why should I pay double up that price? Just because a certain SB company provide a tight spread doesn't necessary means they cheat you in some other way.

With all respect, it is not a question of believing or not. I am not saying spikes doesn't exist trading with some SB firms. But I am getting kind of tired of people on this forum constantly talking about spikes against them, without presenting any kind of evidence, that shows clearly what has happened.

Please reply directly under my post or refer to me, otherwise I don't know if you are addressing me.

 

[arabianights]

If anything capital spreads don't spike enough... Have a live reuters forex feed and it moves a heck of a lot more.

 

[gle101]

If anything capital spreads don't spike enough... Have a live reuters forex feed and it moves a heck of a lot more.

Yes the live feed is bound to move a lot more due to variable spread. Anyway, if that is the case why don't you take advantage of it? We are talking about adminstrated spikes against you.

 

[ceydababy]

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.

I know for a FACT that there are some guys over at a large spread bet firm that are playing big size. This firm got hit for £500k in one day by one client trading oil at £1000 a point and gold at £2k a point. They also have clients in Vodafone and other FTSE 100 stocks at over £10k a point. These big guys do exist at spread bet firms.

Just look at Mike Ashley (newcastle utd owner) I believe he was spreadbetting HBOS at £300k a point and lost £129million to IG Index in about 6 months.

Quote from an article on the internet.

A City insider explained: "Mike should have got out a long time ago when the extent of mortgage debt in America was made clear last year.

"It has effected all the markets and HBOS is just one of them.

"When the stock was priced at £8.80, he gambled £300,000 a point for each penny rise or fall. If the price rose a penny he would get £300,000 but if it fell he would lose that amount."

Ashley gambled on IG Index, a spread betting firm in the financial sector. The firm do not buy or sell shares, just take bets on whether the market is going to go up or down. And in Ashley's case his wagers have been nothing short of catastrophic.

 

[arabianights]

Yes the live feed is bound to move a lot more due to variable spread. Anyway, if that is the case why don't you take advantage of it? We are talking about adminstrated spikes against you.

don't trade forex except if I'm bored... and I'm not very good at it.

 

[SuddenDeath]

I am using the capitalspreads demo, its excellent, shame they dont have euro/yen

SD

PS. Simon I have almost wiped out the account any chance of a top up?

 

[andy woolley]

I am very new to spreadbetting but so far i have been doing very well and i am considering going fuul time with it.

however i am worried if i continue to make constant profits that finspreads, who i trade with may cancel my account. do they have this right? and has anyone had this happen to them??

At Futuresbetting.com we want our clients to make money as we dont take any positions against the client, all bets are 100% hedged.

 

[Kingwizz]

I don't understand why spread-betting companies would close an account. In the end they can effectivley hedge their positions with you & take advantage of any spread they may have over you on the market. Correct me if I am wrong.

 

[simcom]

Yes, that's my understanding. Many people seem to like comparing spread betting firms with traditional bookmakers, whereas I don't really view that as a fair comparison.

 

[tradex]

They only hedge their positions if you are playing with "hedgeable" products. If you are betting on other products such as binary bets and fixed bets, they can not hedge themselves. It is a known fact that if you win alot in these products that can not be hedged, then your account will likely to be closed.

 

[donaldduke]

They only hedge their positions if you are playing with "hedgeable" products. If you are betting on other products such as binary bets and fixed bets, they can not hedge themselves. It is a known fact that if you win alot in these products that can not be hedged, then your account will likely to be closed.

IG, the biggest player in the binary bet space, dont actually close you account, they just make it hard for you to bet big. Consistent winners who try to bet big can expect delays and bet rejections and prices moved against them. These cheating methods almost amount to the same thing as having your account closed but they wont actually go that far. What you have be is far more selective in your bets and you can still beat them.

 

[Ferru]

Hi

I wonder if someone could please clarify a couple of things:

Do spreadbetting companies ever close the accounts of successful spread bettors or place limits on their activities?

And do they have a limit on how much you can risk per point?

Thanks in advance.

Jeff

I know for a FACT that there are some guys over at a large spread bet firm that are playing big size. This firm got hit for £500k in one day by one client trading oil at £1000 a point and gold at £2k a point. They also have clients in Vodafone and other FTSE 100 stocks at over £10k a point. These big guys do exist at spread bet firms.

Just look at Mike Ashley (newcastle utd owner) I believe he was spreadbetting HBOS at £300k a point and lost £129million to IG Index in about 6 months.

Quote from an article on the internet.

A City insider explained: "Mike should have got out a long time ago when the extent of mortgage debt in America was made clear last year.

"It has effected all the markets and HBOS is just one of them.

"When the stock was priced at £8.80, he gambled £300,000 a point for each penny rise or fall. If the price rose a penny he would get £300,000 but if it fell he would lose that amount."

Ashley gambled on IG Index, a spread betting firm in the financial sector. The firm do not buy or sell shares, just take bets on whether the market is going to go up or down. And in Ashley's case his wagers have been nothing short of catastrophic.

 

[Lee Shepherd]

Hi

I wonder if someone could please clarify a couple of things:

Do spreadbetting companies ever close the accounts of successful spread bettors or place limits on their activities?

And do they have a limit on how much you can risk per point?

Thanks in advance.

Jeff

Ferru,

No.

Simple as that. Want further proof. Check out my blog on the profile page.

I have been spreadbetting for several years successfully as you'll see from my blog which is backed up with screenshots. In short, they want you to be successful as they make money from you paying the spreads. The more bets you place, the more money they get. The limits per point are something in the realms of thousands of pounds.

 

[Phil Mibbutz]

Don't think it is as simple as that, because even if they don't actually close accounts, they'll certainly make life difficult or impossible for anyone who trades short time frames. And as has been said elsewhere, SB cos don't necessarily hedge positions, so they will always make more profit out of losers.

As the majority lose, it's obviously bad business to allow the occasional winner to carry on unhindered, although they no doubt reckon that most will run out of luck eventually. On the other hand, if they do have a client who proves to be consistently profitable, they can always follow the trades and make even more! All things considered (especially the 'nothing is our fault' T&Cs, backed up by the useless FOS), they might as well print their own money.

 

[Lee Shepherd]

Don't think it is as simple as that, because even if they don't actually close accounts, they'll certainly make life difficult or impossible for anyone who trades short time frames. And as has been said elsewhere, SB cos don't necessarily hedge positions, so they will always make more profit out of losers.

As the majority lose, it's obviously bad business to allow the occasional winner to carry on unhindered, although they no doubt reckon that most will run out of luck eventually. On the other hand, if they do have a client who proves to be consistently profitable, they can always follow the trades and make even more! All things considered (especially the 'nothing is our fault' T&Cs, backed up by the useless FOS), they might as well print their own money.

Hi Pihl,

This is true, they dont like scalpers. Reasons why are due to them not being able to hedge their bet in open market in the short time frame that the trader wants a resolve. Spreadbet companies are NOT to be used for scalping as they will hold your trade on big orders if it throws them offside on the books. Remember, if they have to wait to get filled at market...so do you. They will not fill you then allow you to close out a few minutes later to take a quick buck when they cannot hedge themselves.

Also, why scalp using SB, go direct access, the spreads with SB are horrendous. I know of no successful long time scalpers with any SB firm. I'm sure theres some newbie bighead out there waiting to post back but first declare how long you been trading, how many trades and size, then comment with caution.

If we look at the spreads in way of simple commission then we have say, a 4 point spread (DJIA or less with some others) and by the time you take your quick 15pts your spread/commission equates to around 26% of that trade. Way too much to pay.

 

[stevespray]

Hi Pihl,

This is true, they dont like scalpers. Reasons why are due to them not being able to hedge their bet in open market in the short time frame that the trader wants a resolve. Spreadbet companies are NOT to be used for scalping as they will hold your trade on big orders if it throws them offside on the books. Remember, if they have to wait to get filled at market...so do you. They will not fill you then allow you to close out a few minutes later to take a quick buck when they cannot hedge themselves.

Also, why scalp using SB, go direct access, the spreads with SB are horrendous. I know of no successful long time scalpers with any SB firm. I'm sure theres some newbie bighead out there waiting to post back but first declare how long you been trading, how many trades and size, then comment with caution.

If we look at the spreads in way of simple commission then we have say, a 4 point spread (DJIA or less with some others) and by the time you take your quick 15pts your spread/commission equates to around 26% of that trade. Way too much to pay.

But what about things like 'Out of hours markets' and also 'in house products' like say Binary Bets? Instruments like this cannot be hedged. Now, as it happens, I do know one or two people who are very good when it comes to these products and these people have been 'dealt with' in a particular manner by certain firms. The classic 'delayed execution' is often a firms first defensive tactic which obviously then leads nicely into regular trade rejection notices.

What makes me laugh is how the firms say "we dont like scalpers / short timeframe traders" and then offer products (like Binary Bets) which positively encourage it. They want it both ways.

The whole industry is then regulated by people who dont have a clue about how these things work.

Steve.

 

[Calvin]

Interestingto read about Mike Ashley. It makes me feel much better about my recent gold and platinum disasters.