FP Markets

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Ross Spur

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As a start, how about some sort of list of spreads on common index and FX markets, so we can compare them with the opposition.

:?:

US30
DAX
FTSE
CAC
EU
GU

etc

:?:
 
Yes good idea. We have Prospreads for example, anything better would be a welcome, they have way too high cost in my opinion compared to trading the real futures (IB).

____________
"Take control with Risk & Money Management"
Planning, Risk & Money Management
 
FTSE spread 0,5 points commissions 2 points (1 to buy 1 to sell) = 2,5 points :?:
 
It would be hard to give an exact spread because only Market Makers can offer fixed spreads. The spreads will naturally shrink or expand depending on liquidity in the market. We do not add on an additional spread to collect our commissions like prospreads may (who are mostly DMA or like any other Market Maker) but we give you the live market price of the underlying. As we are completely transparent we do not tamper with spreads but instead charge you a bet fee dependent on the quantity that you are trading. On the more liquid Indices such as FTSE, DAX, DJIA30 - you are looking at natural spreads anywhere from and low as 0.5 to 2 pips. For FX, again it is dependent on the currencies you are trading, but for example on GBPUSD at the movement as I look at it is 1 pip. EURUSD 0.5 pip.
Although our spreads are very competitive there are also many other benefits. For LSE, ETR, ASX, SGX, HKE etc we offer level 2 depth and allow our clients to participate in the order book. You are also able to participate in the pre and post auctions where, for example on the LSE, on some days a quarter of the volume goes through. We do not profit from client losses so the interests between the client and provider are aligned. There is also no dealer intervention, so no requotes or order rejection.
 
kalott said:
FTSE spread 0,5 points commissions 2 points (1 to buy 1 to sell) = 2,5 points :?:
Click to expand...

We never change the spread. We charge a bet fee on top. Let’s say a high volume trader gets £5 per FTSE contract then yes it would be the equivalent of a 1.5 point spread. The benefit is that you always see the underlying spread and volume so you will never get a slow fill or bad fill it will be exactly what you see and there will never be a re-quote or order rejection.
 
gle101 said:
Yes quite expensive if that is the case, have you had a look at the Dow (YM future) or US30 if that is the name of the instrument?

____________
"Take control with Risk & Money Management"
Planning, Risk & Money Management
Click to expand...

The US30 or DJIA30, you will be charged similar to the other futures, usual market spread then a bet charge on top. With traders placing 10p a point on equities or £1 a point on futures our service may not be appropriate. It is more suited to the more proffesional traders doing larger volumes due to being able to see volumes in the market. This means you are not relying on your provider to create the liquidity.
 
FP Markets said:
The US30 or DJIA30, you will be charged similar to the other futures, usual market spread then a bet charge on top. With traders placing 10p a point on equities or £1 a point on futures our service may not be appropriate. It is more suited to the more proffesional traders doing larger volumes due to being able to see volumes in the market. This means you are not relying on your provider to create the liquidity.
Click to expand...

Still a tad confused. FP seems similar to Prospreads, except that you automatically hedge everything, whereas they don't (although apparently they did when they started as Futures Betting).

My main interest is DJ (YM), FTSE and DAX. How would the costs compare with those offered by a low commission futures broker, and how do the sums work out for markets in different currencies?

For instance, could you do a breakdown of costs of trading one contract of YM assuming the underlying spread is 1pt.
 
Ross Spur said:
... How would the costs compare with those offered by a low commission futures broker ..
Click to expand...

Their site shows a table with a Bet Fee/Commission of 0.118% to enter and 0.118% again to leave - so I think the answer is "significantly higher".
 
FP Markets, is it possible to give us a worked example:confused:?

For instance a £10 per point bet on the FTSE index during market hours.

IG index and CMC both have a one point spread. Now I realise you are saying there is a difference because they are market makers and therefore it is based on/ but not actually the underlying market. So you are saying the spread will vary depending on the supply and demand of the market (is that right?)

Can you let me know what the charge would be for placing a £10 per point trade and are you saying the spread could be as low as 0.5 point through to about 2 points depending on the activity of the market?

I can see the benefit of trading in the underlying market where the company has no interest in the outcome of the trade but it is important for us to fully understand the cost compared to other companies.

Thanks
 
bangkoker said:
FP Markets, is it possible to give us a worked example:confused:?

For instance a £10 per point bet on the FTSE index during market hours.

IG index and CMC both have a one point spread. Now I realise you are saying there is a difference because they are market makers and therefore it is based on/ but not actually the underlying market. So you are saying the spread will vary depending on the supply and demand of the market (is that right?)

Can you let me know what the charge would be for placing a £10 per point trade and are you saying the spread could be as low as 0.5 point through to about 2 points depending on the activity of the market?

I can see the benefit of trading in the underlying market where the company has no interest in the outcome of the trade but it is important for us to fully understand the cost compared to other companies.

Thanks
Click to expand...

We must all be stoopid:)

If FP is offering spread bet, then they're making the market, I would have thought? From our side of the fence, the things that matter are execution and spread, which should include all costs, otherwise why call it spread betting?
 
That is what I was trying to get to the bottom of Ross. I was hoping someone from FP would post a concise and clear reply to explain all costs, hopefully with a worked example. From my point of view I haven't had any problem with IG Markets but I would have thought FP would like to put their information out in a clearer format and then if the cost is reasonable and people feel they would benefit from what they say they offer they might know a little more and make an informed decision... at the moment it all seems very vague and unappealing.

Not keen on vagueness, in my mind vagueness usually implies the other person doesn't know the answer or would rather not give all the information up in a format that is clear and concise and unambiguous. Of course I could be wrong.
 
Apologies for the lack of response over the weekend as I am the one who monitors this site and I was away.
Secondly in clearing up our vagueness in previous posts, DMA Spread Bet can be quiet complex to explain especially when we are first to market to offer this. The idea behind what we are offering and the years and money that have gone into development was to provide a product that is the opposite of vague, completely transparent. The idea behind direct market access is to eliminate any ambiguity and make sure the end user is getting exactly what they see and make sure there is absolutely no interference or hindrance with their trading.
The issue we face in the initial phases of being first to market with DMA Spread Bet is that not everybody is going to understand the product. This then makes it even more difficult to explain via a blog. Being quiet a sophisticated product it seems to suit the more professional traders.
Instead of chasing our tales all we can recommend is to head to our website and download the DMA Spread Betting guide. This eBook was developed specifically to answer all the questions you have been asking in detail. It will explain how DMA Spread Bet works in comparison to CFDs and standard spread bet. It will also explain how our fees and charges work. Along with this it will provide fully worked examples comparing DMA spread bet to normal spread betting and DMA CFDs.
If you still have any further questions we find it much easier to explain over the phone and would welcome any calls on 08006127070.
 
I have found it quiet hard putting worked examples up on this thread but I have added a new album to the FP Markets profile that shows a worked example of DMA CFDs, DMA Spread Betting and normal Spread Betting. The example shows the charges for a Vodafone trade. The charges shown in the example are at their highest and for volume traders the charges can dramatically reduce.
For futures contracts e.g. FTSE future, trading at 5,300 at £10 per point. The total size of the position you would be holding would be £53,000. Per future it would cost £10 to open the position and £10 to close, depending on volumes there are discounts.
 
Last edited:
Ok FP Markets, so from what you are saying and the examples I can see on your website would it be correct, for the FTSE 100 to say the following :

1) You offer the ftse 100 futures contracts for the next few quarters (mar, jun, sep etc) ?

2) You do not offer a daily or rolling cash FTSE 100 type instrument (like many competitoer) as that type of contract would need to be "created" with FP acting as a marketmaker, as there is no directly comparable underlying market for you to hedge in ? (So for intraday trading or very short term trading someone like Worldspreads or CMC who offer 0 - 0.7 points spreads in a synthetic Daily rolling cash equivalent would seem to be more appropriate than using a Futures contract)

3) Using your standard FTSE 100 commissions (per your website) it would cost £10 to buy and £10 to sell 1 FTSE 100 futures contract (worth approx £53000 - so equivalent to approx £10/point through other spreadbetting companies)

4) It is only possible to buy / sell FTSE 100 futures through FP in whole contacts (equivalent to £53000 a time, as you can only hedge whole units in the underlying market.) ?

5) The £10 commission on £53000 outlay equates to £1 per 5300, each side. (or approx 1.8 basis points either side)

6) If the underlying March FTSE future contract is trading at 5593 / 5594 as it is as i write this...the total equivalent price on the same basis as other spreadbeting companies offering the FTSE 100 March future would equate to 5592 / 5595 (approx 1 point each side for costs, added to the market price). So your spread "all in" would equate to 3 points.

7) To compare like with like, IG index are currently quoting 5591.5 / 5595.5 for the 2012 march FTSE100 futures contract (i.e. a standard 6 point spread)

Where it gets interesting for me though, is if you are saying you are offering DMA spreadbetting with L2 type depth information on you platform does this mean it is possible for the spreadbetter to "in effect" actually join the bid or offer sides of the market via limit orders (i.e. when somebody puts a limit order with you, you immediately hedge it in the underlying market by joining the bid / offer, and if you are filled the spreadbet customer limit order with you is then filled) ?

This would mean it was possible in the above example (assuming the limit orders were hit in the market) to actually end up buying at the lower BID price of 5593 and then sell at the higher 5594 price (without the market even moving) before adding 1 point each side to cover costs, which would make the equivalent spread of 1 point for the round trip (-1 underlying market spread plus 2 for round trip costs) on the Mar 2012 FTSE 100 futures contract ?

If this is correct, would this also apply to equities (i.e. you can actually end up Buying at the Lower BID price and Selling at the higher Offer price, if you use limit orders ?)

is this understanding correct, or if not can you point out what is wrong
 
SpreadBeta said:
Ok FP Markets, so from what you are saying and the examples I can see on your website would it be correct, for the FTSE 100 to say the following :

1) You offer the ftse 100 futures contracts for the next few quarters (mar, jun, sep etc) ?

2) You do not offer a daily or rolling cash FTSE 100 type instrument (like many competitoer) as that type of contract would need to be "created" with FP acting as a marketmaker, as there is no directly comparable underlying market for you to hedge in ? (So for intraday trading or very short term trading someone like Worldspreads or CMC who offer 0 - 0.7 points spreads in a synthetic Daily rolling cash equivalent would seem to be more appropriate than using a Futures contract)

3) Using your standard FTSE 100 commissions (per your website) it would cost £10 to buy and £10 to sell 1 FTSE 100 futures contract (worth approx £53000 - so equivalent to approx £10/point through other spreadbetting companies)

4) It is only possible to buy / sell FTSE 100 futures through FP in whole contacts (equivalent to £53000 a time, as you can only hedge whole units in the underlying market.) ?

5) The £10 commission on £53000 outlay equates to £1 per 5300, each side. (or approx 1.8 basis points either side)

6) If the underlying March FTSE future contract is trading at 5593 / 5594 as it is as i write this...the total equivalent price on the same basis as other spreadbeting companies offering the FTSE 100 March future would equate to 5592 / 5595 (approx 1 point each side for costs, added to the market price). So your spread "all in" would equate to 3 points.

7) To compare like with like, IG index are currently quoting 5591.5 / 5595.5 for the 2012 march FTSE100 futures contract (i.e. a standard 6 point spread)

Where it gets interesting for me though, is if you are saying you are offering DMA spreadbetting with L2 type depth information on you platform does this mean it is possible for the spreadbetter to "in effect" actually join the bid or offer sides of the market via limit orders (i.e. when somebody puts a limit order with you, you immediately hedge it in the underlying market by joining the bid / offer, and if you are filled the spreadbet customer limit order with you is then filled) ?

This would mean it was possible in the above example (assuming the limit orders were hit in the market) to actually end up buying at the lower BID price of 5593 and then sell at the higher 5594 price (without the market even moving) before adding 1 point each side to cover costs, which would make the equivalent spread of 1 point for the round trip (-1 underlying market spread plus 2 for round trip costs) on the Mar 2012 FTSE 100 futures contract ?

If this is correct, would this also apply to equities (i.e. you can actually end up Buying at the Lower BID price and Selling at the higher Offer price, if you use limit orders ?)

is this understanding correct, or if not can you point out what is wrong
Click to expand...

1) You can purchase contracts for the future dates with contracts expiring in March, June and Sept.
2) We do not offer any rolling cash instruments. We are only DMA therefore as you mentioned we cannot offer this product as there is no underlying market for us to hedge.
3) Yes correct it would cost £10 to open the position and £10 to close, volume traders get discount on this. The full contract size for a FTSE contract is equivalent to £10 a point. We do not offer anything smaller than this.
4) It is only possible to buy the full contract sizes or mini contracts that are actually traded on an underlying exchange. Therefore anyone offering any sizes smaller is making a market or the counterparty to your trade. This would contradict the DMA model, so we only offer full size contracts.
5) With our index commissions, this is not based on a percentage commission, more so a fee per contract. As the value of the contract changes the commission will remain the same. But in the example you have given if the value of the contract is £53000 then yes £10 would be roughly 1.8 basis points or a 1 point spread.
6) Yes that is correct, natural spread of 1 point plus if you change the commission into a spread then it would be one point either side of the natural spread.
7) I can’t confirm IG markets current spread but 5591.5 / 5595.5 would be a four point spread (guessing a typo) where as we would be charging a three point spread. Although are rates are slightly better taking into account the provided spread is correct we offer many other advantages for the larger traders.
Yes we offer DMA Spread Betting; spread betters can actually participate in the order book/ Bids and Asks. Every trade placed is hedged by us into the underlying exchange unless we are able to fill it at a better price on another exchange such as Chai x (for equities). On equities you are able to see up to 30 lines of depth but futures, with such a fast moving market there is only one line of depth.
One of the main advantages of DMA is that you can bid at 5593 and sell at 5594 without the market moving. You can become a price marker instead of just a price taker with most SB companies.
This also applies to equities. One other benefit is that you are also able to participate in pre and post auctions. You can see a depth screen and a market auction in our platform album.
 
clbfjc said:
Is it me or do prospreads not offer this. I can not see the difference??
Click to expand...

Prospreads doesn't hedge everything automatically, so it's not that different from most SBs, except that the platform is faster and the spreads are wider.

Having said that, I can't really see how this is categorised as spread betting if it works as described.

Another question for Mr FP: if clients are trading the real market, does that mean the margins required are those set by the exchanges, in other words, huge relative to normal SB, especially for the DAX?
 
clbfjc said:
Is it me or do prospreads not offer this. I can not see the difference??
Click to expand...

ProSpreads do offer something similar but I will go through the main differences. Pros Spreads are based out of Gibraltar and the Spread Bet setup in Gibraltar means they can only offer this to professional clients. FP Markets is licensed and based out of the UK and therefore can offer to both retail and professional clients. Due to this fact FP Markets holds client funds segregated and in trust but be weary the setup in Gibraltar means that Pro Spreads may pool clients funds so security of client funds can be limited. Secondly for indexes they put the charge into a spread where as FP Markets gives the underlying spread and simply charges commission at the end of the day.
 
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