win/lose more important than tax

Aug 12, 2009
70
2
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#1
I have just started trading with a proper ECN forex broker and I found most my T/P orders are filled at better prices, if not at the T/P prices. They slip in my favour. S/L orders may slip in their favour. In short, the broker is in a neutral position.

With spreadbetting companies, I found T/P prices always filled at specified prices, never at better prices, but S/L orders slip in their favour. Moreover, with limit orders, orders can only be filled when both bid/ask pass the desired price. For instance, if I want to buy EUR/USD at 1.34400, and the spread co quotes 1.34400/1.34410, the order wont get filled until it moves lower at 1.34390/1.34400, i.e. I am paying the ask price. In contrast, on forex ECN platform, if I am buying, the order can be filled at the bid price, e.g. 1.34400/1.34405 and if I am selling, the order can be filled at the ask price.

To sum up, I won't go back to bucket shops again.
 

Hotch

Well-known member
Jul 8, 2008
1,410
256
93
#2
I find IG often slips in my favour, and rarely against, but that probably has something to do with where my stops/limits.
 
Oct 11, 2006
8,072
1,301
223
#3
I have just started trading with a proper ECN forex broker and I found most my T/P orders are filled at better prices, if not at the T/P prices. They slip in my favour. S/L orders may slip in their favour. In short, the broker is in a neutral position.

With spreadbetting companies, I found T/P prices always filled at specified prices, never at better prices, but S/L orders slip in their favour. Moreover, with limit orders, orders can only be filled when both bid/ask pass the desired price. For instance, if I want to buy EUR/USD at 1.34400, and the spread co quotes 1.34400/1.34410, the order wont get filled until it moves lower at 1.34390/1.34400, i.e. I am paying the ask price. In contrast, on forex ECN platform, if I am buying, the order can be filled at the bid price, e.g. 1.34400/1.34405 and if I am selling, the order can be filled at the ask price.

To sum up, I won't go back to bucket shops again.
Its called asymmetrical slippage and its what FXCM were fined millions for.
 
Nov 11, 2011
79
0
16
fpmarkets.co.uk
#4
I have just started trading with a proper ECN forex broker and I found most my T/P orders are filled at better prices, if not at the T/P prices. They slip in my favour. S/L orders may slip in their favour. In short, the broker is in a neutral position.

With spreadbetting companies, I found T/P prices always filled at specified prices, never at better prices, but S/L orders slip in their favour. Moreover, with limit orders, orders can only be filled when both bid/ask pass the desired price. For instance, if I want to buy EUR/USD at 1.34400, and the spread co quotes 1.34400/1.34410, the order wont get filled until it moves lower at 1.34390/1.34400, i.e. I am paying the ask price. In contrast, on forex ECN platform, if I am buying, the order can be filled at the bid price, e.g. 1.34400/1.34405 and if I am selling, the order can be filled at the ask price.

To sum up, I won't go back to bucket shops again.
Not all Spread Betting companies use these sorts of techniques. You need to find one with DMA, and then you know that the feed will be coming from the market not the provider. Using DMA the provider does not profit from client losses so your interests are aligned.
 

MoonRocket

Active member
Oct 25, 2011
328
31
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#5
...... You need to find one with DMA, and then you know that the feed will be coming from the market not the provider......
Do you know which CFD brokers use DMA?
I thought I read post somewhere that no CFD providers have DMA.
 

Ross Spur

Well-known member
Jul 18, 2010
2,293
172
73
#6
Not all Spread Betting companies use these sorts of techniques. You need to find one with DMA, and then you know that the feed will be coming from the market not the provider. Using DMA the provider does not profit from client losses so your interests are aligned.
If it's really DMA it's not spreadbet?
 
Last edited:
Nov 11, 2011
79
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fpmarkets.co.uk
#7
If it's really DMA it's not spredbet?
Of course there is still spead betting with DMA. There is always a natural spread on the market between the buy and sell price. For some reason everyone seems to only think that commission should be charged within the spread. Accourding to HMRC 451 when betting, a charge can be in the form of commission or in interest. The only reason why you think DMA can't be done is because it is the norm in the UK to charge through a spread. The reason why it is not rely done is becuase HMRC makes providers pay 3% of clients net losses. If you want to know more you should request the Direct Market Access Spread Betting Guide from FP Markets website.

Hope this helps
Alex
 

Ross Spur

Well-known member
Jul 18, 2010
2,293
172
73
#8
Of course there is still spead betting with DMA. There is always a natural spread on the market between the buy and sell price. For some reason everyone seems to only think that commission should be charged within the spread. Accourding to HMRC 451 when betting, a charge can be in the form of commission or in interest. The only reason why you think DMA can't be done is because it is the norm in the UK to charge through a spread. The reason why it is not rely done is becuase HMRC makes providers pay 3% of clients net losses. If you want to know more you should request the Direct Market Access Spread Betting Guide from FP Markets website.

Hope this helps
Alex
Don't quite follow. With spread bet you're never directly accessing the market, you're trading with the provider/bookie, using prices derived from the underlying instrument (or something else, 'out of hours'.
 
Nov 11, 2011
79
0
16
fpmarkets.co.uk
#9
Don't quite follow. With spread bet you're never directly accessing the market, you're trading with the provider/bookie, using prices derived from the underlying instrument (or something else, 'out of hours'.
You can directly access the market, it is just the case that 95% of spread betting providers do not. If you can understand the basic framework of how people trade DMA CFDs, it is sort of the same method with a few changes. Would take up alot of room to post everything, what i would suggest is to go to Direct Market Access Spread Betting Guide | eBooks | Education | FP Markets and request the eBook. Many people prefer this sort of method because there are no requotes, order rejections and you do not have the problem of thinking your provider is widening spreads or manipulating the market taking out stop losses.
 

gle101

Well-known member
Jan 14, 2006
3,717
84
58
Karlstad
#10
You can directly access the market, it is just the case that 95% of spread betting providers do not. If you can understand the basic framework of how people trade DMA CFDs, it is sort of the same method with a few changes. Would take up alot of room to post everything, what i would suggest is to go to Direct Market Access Spread Betting Guide | eBooks | Education | FP Markets and request the eBook. Many people prefer this sort of method because there are no requotes, order rejections and you do not have the problem of thinking your provider is widening spreads or manipulating the market taking out stop losses.
Well, CFDs is either listed through the stock exchange or unlisted. If unlisted I guess they have to be offered by a market maker, if they are hedged in the real market is another issue. What I am trying to say, one is actually not trading DMA (the feel might be though), otherwise you would not qualify categorizing it as SB, thus being tax free. Please correct me if I am wrong in my assumption.

____________
"Take control with Risk & Money Management"
Planning, Risk & Money Management
 
Nov 11, 2011
79
0
16
fpmarkets.co.uk
#11
Well, CFDs is either listed through the stock exchange or unlisted. If unlisted I guess they have to be offered by a market maker, if they are hedged in the real market is another issue. What I am trying to say, one is actually not trading DMA (the feel might be though), otherwise you would not qualify categorizing it as SB, thus being tax free. Please correct me if I am wrong in my assumption.

____________
"Take control with Risk & Money Management"
Planning, Risk & Money Management
At FP Markets we only offer products that trade on an actual markets. What makes it DMA is that we hedge every bet onto the corresponding market or with our Prime broker. About 98% is hedged onto the underlying market. The 2% is hedged with one of our prime broker, if hedged with a prime broker it means that you get a better rate than on the corresponding market. So we can gaurentee to give you market price or better. There is nothing to say that Spread Betting providers are not allowed to hedge. With some Spread Betting providers they can run two books one hedged and one not. Instead of charging you in the spread to place the bet, we charge you a transparent bet fee so you know exactly where the market is and how much you are being charged. As said below, hard to explain on forum. Our DMA Spread Betting guide will explain everything about our model.

Hope this helps
Alex
 

Ross Spur

Well-known member
Jul 18, 2010
2,293
172
73
#12
At FP Markets we only offer products that trade on an actual markets. What makes it DMA is that we hedge every bet onto the corresponding market or with our Prime broker. About 98% is hedged onto the underlying market. The 2% is hedged with one of our prime broker, if hedged with a prime broker it means that you get a better rate than on the corresponding market. So we can gaurentee to give you market price or better. There is nothing to say that Spread Betting providers are not allowed to hedge. With some Spread Betting providers they can run two books one hedged and one not. Instead of charging you in the spread to place the bet, we charge you a transparent bet fee so you know exactly where the market is and how much you are being charged. As said below, hard to explain on forum. Our DMA Spread Betting guide will explain everything about our model.

Hope this helps
Alex

Couldn't care less whether a SB hedges or not, but still don't geddit. Unless you're actually trading directly with someone in the real market, how can it be DMA?

For instance, if it's DMA, how could I place a YM trade of a pound a pt when the underlying future trades in $5 lots?
 
Nov 11, 2011
79
0
16
fpmarkets.co.uk
#13
Couldn't care less whether a SB hedges or not, but still don't geddit. Unless you're actually trading directly with someone in the real market, how can it be DMA?

For instance, if it's DMA, how could I place a YM trade of a pound a pt when the underlying future trades in $5 lots?
Like i said you can not place bet sizes smaller than the underlying contract size. You place the bet through us and we hedge it in the market so an equal size trade is placed. This is how DMA works. If you are wanting to go straight onto the market then that is just buying shares. With CFD or Spread Betting we are the counterparty to your bet/trade and it is directly hedged onto the market.