At £1000+ Per Point, Which SB Company is Best for Intra-day Trading ?

[Grey1]

I have used DA trading pretty much the whole of my trading life but I may have a requirement to trade using a SB company for a specific confidential project.

So from the view of the T2W membership, who would be the best SB Company to trade intra-day for values per point in excess of £1000 ?

Also would online trading be possible for this or would it require manual only trading ?

This is a serious question and thanks in advance for your replies.


Paul

Paul

I have a SB account with CMC and I still take a trade with them ,, My MAx bet on INDU cash has only been around £60- £ 80/point and i have never had a problem with them ,, You must realise that SB is only suitable for Index trading as the spread is around 4 points on DOW and 2 points on FTSE , If you move to stock then the spread is ridiculous and you would be far better off to pay tax than SB any stocks.

ALso I advise not to day trade using SB if you don't have to .
Please becareful as your execution can often be based on delayed quotation ( instead of instant fill if the size was small ) in fast moving market if the trade size is large which means they can rip you off TONS and TONS,, They call it re quote and you only have seconds to make a decision .

There is little or no advantage in SB trading as source of income using SB as you are TAXED at source which make it look it is TAX free



Grey1

 

[Trader333]

Iraj,

I agree with you and would never try trading stocks this way. I am engaged in a project where my associates specifically wish to use SB so I wanted to make sure that the best SB company is used. It remains to be seen if what is intended actually works and thanks for your advice.


Paul

 

[donaldduke]

1000+ a point = 400+ YM contract = 2% of the daily YM futures volume in one trade.

Your associates must have big balls.

At best I would expect you would get charged the same dealing spread as the S&Ps which is typically wider than the DOW, and then the SB then goes and hedges using S&Ps.

At worst they look at the market depth on YM and see where you order would get filled, add on spread and charge you that (even though they might not use YM as the hedge). Or even worse they hedge with the underlying and you only get to know the price after the fill, just like a regular market order.

You might consider S&Ps instead, 1 S&P point = approx 10 dow pts. So you would be betting 10,000+ a point!! but the underlying can easily take that.. You might even get to use an online interface for S&P bets..

Let us know how you get on..

 

[Trader333]

You might consider S&Ps instead,

Thanks for your comments and I agree that it may be better to trade the S&P when size gets too large for the Dow.

Does anyone here have experience of futuresbetting.com and if so what are your views ?


Paul

 

[TheMoneyMachine]

I have used DA trading pretty much the whole of my trading life but I may have a requirement to trade using a SB company for a specific confidential project.

So from the view of the T2W membership, who would be the best SB Company to trade intra-day for values per point in excess of £1000 ?

Also would online trading be possible for this or would it require manual only trading ?

This is a serious question and thanks in advance for your replies.


Paul

Paul

CMC Markets allow well in excess of £1000 per point on liquid currency instruments without any associated problems. Can't comment on Dow instruments.

Regards

TMM

 

[SpreadBunny]

Paul

You must realise that SB is only suitable for Index trading as the spread is around 4 points on DOW and 2 points on FTSE , If you move to stock then the spread is ridiculous and you would be far better off to pay tax than SB any stocks.

Grey1

This is an interesting comment as this isn't how I've been taught.

 

[Hoggums]

This is an interesting comment as this isn't how I've been taught.

You also have to factor in interest payments on your long positions. Hold a SpreadBet position in a stock that doesn't move and you'll slowly bleed money from your account.

Trader333 - I'm interested to hear how your investigation went ...

 

[SpreadBunny]

Good point Hoggums. Being a day trader, completely forgotten about the overnight charges ouch!

 

[JTrader]

I find it hard to believe that any SB firm will reduce their spread if you trade size, it'd be quite the opposite. They take the other side of your trade and the bigger the trade the bigger their potential risk. They mitigate risk to some extent by slipping your price.

Besides, £34k a point is the equivalent of approx 13,600 contracts of Dow futures. No way they could offset that to hedge in the underlying without massive slippage.

Yes the spreads are likely to be wider rather than narrower as the volume will not be there to fill within the normal spread, and so will need to eat into available order (prices) nearby, until sufficient volume is available.

I'd look at CMC, GFT, futuresbetting first - see what they say.

 

[JTrader]

ALso I advise not to day trade using SB if you don't have to .
Please becareful as your execution can often be based on delayed quotation ( instead of instant fill if the size was small ) in fast moving market if the trade size is large which means they can rip you off TONS and TONS,, They call it re quote and you only have seconds to make a decision .


Grey1

Yes intraday with CMC, GFT etc would be hard at that size. If they could fill you on line, every trade would likely be on dealer referal. If they couldn't be filled online at that size as a matter of policy, it would be a case of telephone dealing.

 

[leu04jam]

If your trading £1000+ a ten point move is a considerable amount of profit if it moves in your favour. At that level surely it would be easier to hire a friend, family member, or random person and just pay them 25k a yesar to just do whatever you shout out at them on a different platform at the same time? At the end of the day 25k is only winning 25 points on one trade.

 

[SpreadBunny]

You're asking for trouble trading £1000 quid a point. That's 400 lots in the underlining market . The spreadbet firm will be rubbing their hands. Please have a good think about it, especially if you are trading other peoples money. Further, you would need a £1,000,000 account risking 1% of your account, thats only 25 points stop. lately 25 points on the Dow can be just noise.

errm did you mean £100,000 account risking 1% (£1000pp) with 25pts stop or did you really mean £1,000,000 account?

 

[tightstops]

Paul

CMC Markets allow well in excess of £1000 per point on liquid currency instruments without any associated problems. Can't comment on Dow instruments.

Regards

TMM

this is nonsence i traded a fraction of this and was requoted frequently.
putting orders in is different and the only way to go if youre spreadbetting but they obviously think highly enough of you to let you trade their money would they listen if you explained that for at least some of the trades it makes a lot more sense to use other sources?

 

[peto]

errm did you mean £100,000 account risking 1% (£1000pp) with 25pts stop or did you really mean £1,000,000 account?

25points x £1,000 per point is £25,000 risk. If we want a 1% risk we need £2.5 million.
Not sure where laptop1 gets his stop levels or risk tolerances from though?

Sorry Paul, going off subject.

 

[lurkerlurker]

Trader Dante, from what I can remember about the first case, it was to do with SpreadEx closing a Dow position that was going against him, even though he argued he had sufficient funds to cover it. After they closed his trade, the mkt turned around (typical) and would have resulted in a profitable bet if they hadn't interferred.

The case went to court and he won. He received back his losses, his potential gain and legal fees were paid by them. The settlement came to over 100k I believe and it lead to them rewriting their terms and conditions.

There was second case but I am not sure of the outcome.

Was this case reported, and if so can we have the citation? I'd be interested in reading it...

 

[lurkerlurker]

Thanks for your comments and I agree that it may be better to trade the S&P when size gets too large for the Dow.

Does anyone here have experience of futuresbetting.com and if so what are your views ?


Paul

No experience of FB, but as I understand they only allow you to trade in the lot size of the underlying, and they add their spread to whatever the hedge was filled at. They seem the best choice for this. As arb has previously explained, UK SB firms won't like a consistent winner doing that size because of the way their profits on the hedge are taxed. FB is based in Gibraltar and is regulated by their FSC, so you might want to look into that in more detail to see if your clients are comfortable with the degree of oversight.

Do let us know how you get on. You should be able to do any size the underlying supports online, which is useful. Also, you can use something like NinjaTrader to trade with FB - and I think they have an API available if you want to use another platform or your own code...

I wouldn't try 400 YM contracts - you will get serious slippage both ways. The Dow isn't really liquid to more than 30 or so contracts at a single price even during the busy times. Do 40 full SP contracts and they won't even notice you (or 400 ES).

Hope this helps. Good luck on the project.

 

[lurkerlurker]

What is the case concerning?

Found the case. I think it is the one referred to above. Parties are one Dr Vijay Battu and Spreadex Limited.

Case is [2005] EWCA Civ 855 if anyone is interested.

 

[Trader333]

No experience of FB, but as I understand they only allow you to trade in the lot size of the underlying, and they add their spread to whatever the hedge was filled at

Thanks for this, there are a few things coming out that I will need to consider. This project will go in phases so it wont be a start at the £1000 per point level but will move to it over time. I need to know the issues in advance before trying it as I know that it will be easy to get stung.


Paul

 

[laptop1]

25points x £1,000 per point is £25,000 risk. If we want a 1% risk we need £2.5 million.
Not sure where laptop1 gets his stop levels or risk tolerances from though?

Sorry Paul, going off subject.

. . Yes peto, it was late, I had a few cans lol, you're corret he would need an account of £2.5 million to risk 1% on a 25 point move. Anyway, he's asking for trouble trading £1000 quid a point with a spreadbet firm.

 

[Phil Mibbutz]

All interesting comments. I'd say that most SB cos will be delighted to take £1000pp bets, so long as you consistently lose. If there's any chance you know what you're doing (which I assume is the case), life will soon become very difficult! They'd soon spot what was going on if you tried splitting positions across accounts, too.