Best Thread Capital Spreads

[lurkerlurker]

gle101 - sorry I didn't get back to you sooner regarding MIFD and Best Execution, but I see you found some info yourself.

I see we are yet to have a comment from Simon on the issues raised over the last week.

 

[Slorm]

I see we are yet to have a comment from Simon on the issues raised over the last week.

I've noticed his name crop up all week on one of the market reports I get (can't remember which one) giving the CS view of the markets, so I guess he's been busy with that.

 

[gle101]

gle101 - sorry I didn't get back to you sooner regarding MIFD and Best Execution, but I see you found some info yourself.

I see we are yet to have a comment from Simon on the issues raised over the last week.

Yes I did read up on the MiFID directive. It is a very extensive program needed for the SB in order to live up to the MiFID directive. It is the same in Sweden of course, every financial institution is preparing to implement this directive. It will be very interesting to see how the SB industry will react and implement the MiFID directive.

Yes I am sure Simon will respond to the issues being discussed during these last few days. Concerning the MiFID directive I think Capitalspreads are well prepared and well on the way to implementing the directive on the first of November.

 

[knight_trader]

Update on CS issue

Today I got the same error from CS and managed to do a screenprint. Their technical team say they are aware of this error and although it states the trade has been declined it could actually still be open, hence the 'check your open positions' message in the dialog box.

I still think CS are great but would just warn everyone that if you get this error it is still more than likely the trade has actually opened. According to CS this is perfectly acceptable if slightly misleading?!?

 

[stevespray]

Today I got the same error from CS and managed to do a screenprint. Their technical team say they are aware of this error and although it states the trade has been declined it could actually still be open, hence the 'check your open positions' message in the dialog box.

I still think CS are great but would just warn everyone that if you get this error it is still more than likely the trade has actually opened. According to CS this is perfectly acceptable if slightly misleading?!?

The box clearly states "Trade Declined"! It can not be 'acceptable' that the trade might have been accepted.

Steve.

 

[knight_trader]

Sorry I should state they see it as 'acceptable' whereas I do not, I await their response. Perhaps Simon will give us his point of view when he next posts.

 

[Phil Mibbutz]

WS has a similarly confusing pop-up box. I think it's about 50/50 whether the trade has gone through or not.

 

[lurkerlurker]

Ripping Off London Capital Group

Does anyone care to comment on "Interactive Spreads". They are a new Irish financial bookmaker, who appear to have plagiarised their Terms and Conditions from London Capital Group. At first I thought that it may be coincidental, however ss far as I am aware, there is no "Insolvency Act 1986" on the Irish statute books. Further, our statutory instruments aren't binding on the Irish either, including the "Financial Services (Client Money) Regulations 1991".

Exhibit A: Standard Capital Spreads T&Cs
Exhibit B: Interactive Spreads T&Cs

Read both for yourselves, paying particular attention to the paragraph numbers and certain UK specific terms!

Some particular gems stand out

"15.6 Any query or dispute in respect of any trade or conversation, together with details of the time and date of the trade or conversation must be communicated to us as soon as you become aware of it If the dispute or complaint is not satisfactorily resolved it should be referred, again with all details, to the Customer Support Desk of InteractiveSpreads and, if not then resolved to your satisfaction, should be further referred to our Compliance Officer Customer Service. Should you be in any way dissatisfied with the resolution of any dispute you have the right to refer the matter to the Financial Ombudsman Service. In circumstances of this occurring the matter should be referred to the Ombudsman within 28 days of the Compliance Officers’ resolution of the dispute. "​

(my emphasis - I didn't know the Irish came under the FOS, or that "Customer Service" is their compliance officer)

Perhaps Simon might be interested in this - unless of course this has something to do with London Capital Group, but I suspect this Irish lot have just ripped off their terms as they were too lazy to hire lawyers.

 

[capitalspreads]

trade declined message

as is always the case a stupid error caused the wrong message to be shown to clients when a server error causes a trade problem. As is generally the case in these instances it can only cost us (CS) money.

Best execution is still in consultation. There are as many theories as to how this will affect SB companies as there are conspiracy theories about JF Kennedy but in the main we see little change as clients will still be trading on 'our quotes' and as a 'Market Maker' we can still reject a trade as being too late on the original quote.

It is also difficult to measure best execution. Will every SB company have to have the same price? What about adding costs for offering credit accounts? Or lower margins? If one SB is quoting a higher (worse) offer price it will mean that is is also probably offering a higher (therefore better) bid price.

If everything is delivered to be to the disadvantage of the various trading companies then spreads will have to widen etc to take account of the potential losses.

We do our best to offer the service that is demanded but 'barrack room lawyers' are likely to be their own worst enemies. As, by forcing the SB companies to accept unreasonable deals, they will cause the SB companies to adapt to the detriment of everybody.

interactive spreads ... not us...spread trading not betting .... lazy and not FSA regulated .. no spread betting licence.

Simon

 

[gle101]

as is always the case a stupid error caused the wrong message to be shown to clients when a server error causes a trade problem. As is generally the case in these instances it can only cost us (CS) money.

Best execution is still in consultation. There are as many theories as to how this will affect SB companies as there are conspiracy theories about JF Kennedy but in the main we see little change as clients will still be trading on 'our quotes' and as a 'Market Maker' we can still reject a trade as being too late on the original quote.

It is also difficult to measure best execution. Will every SB company have to have the same price? What about adding costs for offering credit accounts? Or lower margins? If one SB is quoting a higher (worse) offer price it will mean that is is also probably offering a higher (therefore better) bid price.

If everything is delivered to be to the disadvantage of the various trading companies then spreads will have to widen etc to take account of the potential losses.

We do our best to offer the service that is demanded but 'barrack room lawyers' are likely to be their own worst enemies. As, by forcing the SB companies to accept unreasonable deals, they will cause the SB companies to adapt to the detriment of everybody.

interactive spreads ... not us...spread trading not betting .... lazy and not FSA regulated .. no spread betting licence.

Simon

Thanks for the reply Simon, there were some good points to ponder upon. We will see how things evolve and if there are any noticeable changes after the directive has had time to make an impact. THe MiFID directive being discussed at different forums hopefully raises awareness among traders, and thus will have a positive affect on SB companies as well.

I don't know whom you mean by ''barrack room lawyers'. I do hope that you don't mistake a sincere interest in spread betting issues as something that should be ignored or disparaged. If that is the case it would be a total disrespect for your own clients, which are the source of nourishment for you and your company. Who has been talking about unreasonable deals? I think most traders want a fair deal, and when they feel they are in some cases not getting it, they will express their point of view in a thread like this. You should regard these inputs, and I am sure you do, as valuable feedback that will increase your own level of service, in order to stay ahead of competition. However, it is my viewpoint that the tone and language used must be pleasant and respectful against the SB company and representative in question.

This thread, Capitalspreads, is not a domain of CS, any interesting SB subject can be discussed if the members of the board find it interesting and relevant.

 

[capitalspreads]

gle

sorry it was more meant for the five page posts placed occasionally which i have to wade through and always seem to boil down to the same old complaint.

"I placed a trade and if CS are quoting it then they should accept it no matter what" and then threatening us with every law and regulator in the world if we do not agree.

It does seem to be a regular joy(!?!) for me and I just wish that some commentators realised that SB trading has been around for many, many years and there is really very little new under the sun. When we make a statement about policy or functionality we are not being perverse or unfair or unlawful we are merely stating how SB works according to our (tried and tested) terms.

Those terms may change by agreement with, or by instruction from, the regulators but at the moment that is what we go with.

We will continue to offer good value tight spreads and do our very best to fulfil our clients wishes within the regulatory requirements.

simon

 

[gle101]

sorry it was more meant for the five page posts placed occasionally which i have to wade through and always seem to boil down to the same old complaint.

"I placed a trade and if CS are quoting it then they should accept it no matter what" and then threatening us with every law and regulator in the world if we do not agree.

It does seem to be a regular joy(!?!) for me and I just wish that some commentators realised that SB trading has been around for many, many years and there is really very little new under the sun. When we make a statement about policy or functionality we are not being perverse or unfair or unlawful we are merely stating how SB works according to our (tried and tested) terms.

Those terms may change by agreement with, or by instruction from, the regulators but at the moment that is what we go with.

We will continue to offer good value tight spreads and do our very best to fulfil our clients wishes within the regulatory requirements.

simon

Simon, my apologies to you as well. It must be hard to remember and correctly answer all "self appointed experts" (like myself, ha ha!) who think they know it all.

Keep up the good work!

 

[nkruger]

Hello Simon - normal monthly nudge to you re: Ibex. Any joy yet on including it ?

Nick.

 

[shortorlong]

deposits safe?

Hi Simon et al,
Northern Rock may survive the recent problem but saver's money is guaranteed anyway up to £31,700 through the Financial Services Compensation Scheme.

What is the situation regarding our funds deposited at Capital Spreads and other SB companies?

(here's a scenario: one of your dealers goes all Nick Leeson on you ..
I am sure your company is a safe as the bank of England otherwise, since most people keep pumping money in rather than taking it out.)

 

[gle101]

Hi Simon et al,
Northern Rock may survive the recent problem but saver's money is guaranteed anyway up to £31,700 through the Financial Services Compensation Scheme.

What is the situation regarding our funds deposited at Capital Spreads and other SB companies?

(here's a scenario: one of your dealers goes all Nick Leeson on you ..
I am sure your company is a safe as the bank of England otherwise, since most people keep pumping money in rather than taking it out.)

Yes this is a valid question. The clients funds are segregated as I understand it. I don't know if the funds are insured. In Sweden all brokers funds are segregated and insured up to 250.000 Swedish Crowns.

Nick Leeson is apparently doing fine today. I have read his latest book on stress issues, quite good. He sure has some interesting experiences to share on stress related aspect on the trader.

 

[lurkerlurker]

Hi Simon et al,
Northern Rock may survive the recent problem but saver's money is guaranteed anyway up to £31,700 through the Financial Services Compensation Scheme.

What is the situation regarding our funds deposited at Capital Spreads and other SB companies?

(here's a scenario: one of your dealers goes all Nick Leeson on you ..
I am sure your company is a safe as the bank of England otherwise, since most people keep pumping money in rather than taking it out.)

Funds are segregated, and you have up to £48K from the FSCS if things go belly up.

 

[cube101]

Hi, I'm looking at opening an account in the next month or so but have a quick question about stops at Capital Spreads. If for example i have a stop on a trade and the market gaps through it will my stop be activated at the next closest price or does the the fact that it gapped though my stop mean that the trade will stay open and in effect mean my losses just keep mounting until i can take it out manually? Also i read in the FT this weekend that Capital spreads are looking at trailing stops... any word when these may be implimented?

Cheers,
Steve

 

[lurkerlurker]

Hi, I'm looking at opening an account in the next month or so but have a quick question about stops at Capital Spreads. If for example i have a stop on a trade and the market gaps through it will my stop be activated at the next closest price or does the the fact that it gapped though my stop mean that the trade will stay open and in effect mean my losses just keep mounting until i can take it out manually? Also i read in the FT this weekend that Capital spreads are looking at trailing stops... any word when these may be implimented?

Cheers,
Steve

Hi Steve

In SB, if a market gaps through a stop level, you will be filled at the next reasonable price after your stop was triggered. This means you will still be stopped out if the market gaps from a level above your stop to a level below without ever having a trade done at your exact stop price. Naturally, in fast or thin markets, slippage will occur, and this is the case with any SB firm. I can't comment regarding trailing stops, and I don't think any other firm offers them either. Of course, you should be able to manually alter a stop level at any time.

 

[capitalspreads]

short or long

Clients funds are 'ring fenced'. With top tiered banks. Not all in one bank either. They are doubly covered in that we must place funds to cover all open winning bets as well BUT cannot take away open losing bets.

As you are aware we never give credit and all positions have stops associated with them that are non negotiable (i.e clients cannot say "i will definately have the money with you by close of business, please hold my position open") so a 'Nick Leeson' style event is not possible with us. We do not do CFDs either which are the only real weak point in the SB companies armoury as clients make much, much, bigger punts on individual stocks (often in second line stock) in these markets. But even here many CFD companies doubled margin requirements recently (up to 20% on ftse 100 stock) so they should be well covered.

the money held with CS is as safe as it can possibly be, as we are as anxious to maintain security as well (not least with our own funds). We monitor the situation every day and, in reality, your money is probably safer with us than with your own bank as we will be quicker to move on any disquieting news whereas private individuals may not be privvy to all the events as they happen.

cube 101

the journo misunderstood what i said to him. What I said was we were not looking at it at the moment but might do in the future. We have a huge amount of development going on at the moment and really this is at the back of the pile. Lurker's answer is substantially correct. Some SB companies give guaranteed stops, CS don't.

Simon

 

[jkplay]

I can't comment regarding trailing stops, and I don't think any other firm offers them either. Of course, you should be able to manually alter a stop level at any time.

Hi,

GFT offer trailing stops for spreadbetting accounts and you can also adjust your pending orders straight from the graph, by dragging them up or down.

They are the only SB offering trailing stops as far as I am aware.

JK