Have you been banned by an SB?

I have heard / read that some people get banned by SB'S (Spread Betting companies), when they make too much money.

Is this true?......If so, how much money do you have to make before they contemplate banning you?

Has anyone here been banned before?

Is there anyone on these boards who is employed by an SB who would like to share with us what their policy is on this?

Well, not exactly, but I do remember a couple of cases where the SB co. made it so difficult, it was impossible to trade. The traders were put on "phone only dealing"..... Just a moment sir, I'll put that trade through..... 2 minutes later, and X points to the worse, the trade was, understandably, declined......

i cant see any reason for an SB to ban someone - unless the trader was arbing against another SB company or the underlyng and people working in the spreadbetting company did not like the trader - and so banned him

i dont think arbing against the spreadbet company should be a problem for them since if it is done with any size, they will have the choice of wether to take the trade or not, and it may in fact just help them to balance their book, or make them check their price

in theory they are meant to always be hedged - so nothing should really be a problem for them - but it appears some dont hedge - so they will blow up big time one day - so you should not trade with those ones anyway or you stand a chance of them going belly up when you are due your one millions dollar cheque

* The traders were put on "phone only dealing"..... Just a moment sir, I'll put that trade through..... 2 minutes later, and X points to the worse, the trade was, understandably, declined... *


that's not actually a ban , I have had conditions similar to these imposed and one can still trade reasonably well.

very interested to see who has actually been banned outright for whatever reason .

the SB firms don't like arbs coz they call up every 2 minutes , online dealing may be a different case.

And the SB's are mostly unhedged , that's how they make their profits . they win you lose , simple as that.

SB companies generate revenues through transaction based dealing fees and/or spreads. Their business model is to generate a systematic hedge for every client transaction. As far as I am aware, they win irrespective of whether a client wins or loses.

G.

They're going to cotton on to insiders at some stage.

Gwenallt,

Not strictly true as one SB company in its Annual Report stated that profits were down against budget because clients had been more lucky than anticipated and that this was an anomoly that was not expected to continue. This would not be the case if all client positions were hedged.


Paul

I think most SB companies will seek to hedge against the aggregate of all their clients positions if it takes their exposure in a certain market beyond a set level of risk.

Inevitably, this means that within these limits, they will make losses/ profits depending on the aggregate of clients positions and the direction the actual market goes.

Different SB companies will obviously have different risk paramaters and some will hedge more than others but it's naive to think that any SB company will hedge every SB made.

I can only think that people would be put on telephone dealing only if their positions were sufficiently large enough to affect the hedging policy of the SB company.

I would be interested to hear from more people who have experienced trading difficulties (manual trades/ always requoted/ delayed fills etc). Has it been in the circumstances described, ie large positions or has it happened just after a period of success but still with relatively small positions). It would also be interesting to hear which SB companies this has been experienced with and which instruments were being traded.

I can't see that this policy would be in the best interest of SB's.

So if you have experinced this, post your story and lets see if we can establish a pattern of the worst offenders (and best SB co's to deal with). I'm sure this would serve a useful purpose for all on here who use SB's (including me).

* . As far as I am aware, they win irrespective of whether a client wins or loses. *

not really , they want to make big profits , over and above what the pidly spread can give them - called greed and ego.

so like the man says if punters win more they make less, and viceversa , that can only happen if they are to a large degree unhedged .

Believe me on this , I've seen finspreads accounts and it confirms the above.

re question from Blairlogie:-

"Is there anyone on these boards who is employed by an SB who would like to share with us what their policy is on this?"

I'm not employed by an SB company but there was an interesting feature in Shares magazine 18-24 september entitled "spreadbetting roundtable".

Interestingly, this subject was covered and I would quote Patrick Latchford of the parent company of finspreads:-

"We're very happy to have consistent winners and, like everybody else, if we see good winners, then we're keener to hedge those straight away as opposed to running it for five minutes and taking a view"

This could explain why consistent winners have experienced being put on phone dealing by certain SB's, although I would expect that the position size would still have to be sufficiently high to actually affect the SB's overall hedging policy?

I was not banned exactly but IG refused to do my size (only £50/pt).
Over the course of a fortnight i had put on 6 or 7 daily ftse bets for £50/pt. I put these on at around 7/8pm so got a larger bid/offer spread but was happy to accept this. I let them all expire on the next days close. After the 6/7th straight win i was called by one of their chief dealers (Tamass - featured quite heavily on the TV documentary) and was told that he thought 'something was fishy' and would only accept out of hours bets from me of £10/pt maximum. He made a note in their system so whoever picked up the phone at their end would know.
I resented the fact that he thought i was somehow 'conning' them!

So have barely traded with them since.....

They probably thought you were doing an arbitrage trade. There was a person from one of the spread bet companies mentioning this on one of the other threads.

I don't know of anyone who's been banned and at any rate have moved to IB.
But if you bet on the horses and each Saturday went to Ladbrokes and walked away with a few grand each time, sooner or later (even if you were doing nothing illegal) I'm sure they'd ban you from all their shops.
Can't see SB companies being any different.

hjk,

yeah , that tamass guy is real fool - hopeless.

Do yourself a favour and forget IG. Do a search for my posts and you'll see my reasons why.

We must be doing some good , IG is taking notice and getting stung .

hhuhuhuhuhuhuhuhuh.

power to the people or should I say punters .

The reason I posted the original question to this thread was because I heard about an individual punter who was a client of an SB.

This individual was regularly taking £40k profit per month trading index options.

The SB concerned called him to their offices..."We have some good news, and we have some bad news. the bad news is that we are closing your account, and you won't be able to trade with us any longer. The good news is that we would like to offer you a job here".

Whilst the individual took them up on the offer, on an £80k salary, I would personally prefer to continue making £40k a month tax free!....

I have also heard of others who have simply been told that their accounts are being closed after making regular and constantly profitable trades, and to my knowledege there was no "insider" element at work, just guts, luck, and maybe a bit of skill!

As a previous poster stated about Ladbokes, the odd casino in Monte Carlo or Vegas is not unknown to bar successful gamblers.

I would still like to hear the views from SB employees, though!

SB acct closures

I believe professional punters have similar problems with bookmakers so spread their custom around 10 bookmakers to try to avoid being closed down.

I look forward to be closed down!!

I hope you all realise that fully licensed brokers are not much better!

of course some speadbetting companies are going to have people working for them who decide they can second guess markets and not hedge

but in the end they will just lose money for their companies - the spreadbetting business model making money on the spread is a good one - but of course there is always someone who takes a stable base and tries to be clever and try to make a premium - and i bet there are a lot of failed traders working in spreadbetting companies who get themselves into a position where they get the chance to do a Nick Leeson on the company

i am sure speadbetting companies would only ban people arbing them, or if they feel that the person is front running in situations where the spreadbetting company cannot hedge, or the trader is relying on the spreadbetting company to take a hedge positions and the trader has engineered it so they profit by the hedge position being taken


Blairlogie

it would be good to hear if you knew why someone who could earn 40K a month would take a job earning 80K a year (480K v 80k a year - even without bringing tax into it) - when he could have gone to another SB company or of course used futures

maybe he was actually losing 40K a month and speadbetting companies who dont hedge wanted him to become a trainer to teach new traders how to trade!!!

How can someone go from making 40k a month to an 80k a year job?.............defies logic but anything is possible............lol

stevet,


* maybe he was actually losing 40K a month and speadbetting companies who dont hedge wanted him to become a trainer to teach new traders how to trade!!! *



hahahahahahhahahahaahahah !