Thanks Simon, no problem, I will see if I can round them up again and get back to you.
stevespray
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Isn’t the answer to most of these types of ‘delayed execution’ issues to simply execute orders a the current price at the moment the execution takes place? If the price changes against the client then the order would have to be rejected – expecting the client to accept a different price can not obviously be entertained. However, when the price moves to favour the client, that price improvement should be passed on. It seems to me that this is meant to take place under the new directive under the heading of best execution. I have noticed, on a number of spreadbets which I have done, that this is not happening. I don’t mean to single CS out for criticism here since I find that with CS it is a case of ‘swings and round-a-bouts’ – some times, when the price moves against me, I still get filled and sometimes I don’t. Having said that however, there is a case of having a feeling that the situation needs constantly monitoring since a firm which delays execution could take advantage if it so wished. The only thing which would remove this is if the firm had an obligation to fill at the improved price when the price moved in such a manner which gives the client a more favourable price.
Is there any reason why Capital does not or would not adopt this policy given that the new directives more or less indicate that this should be happening anyway?
The effects would, in theory, half the number of trade rejections given that all trades rejected because the price has moved for the client would now simply be filled at the improved price – I can not see many clients ringing to complain that ‘You filled me at a different price’ when that ‘different price’ is a better price.
I suggested this to CMC once and of course they came back with many reasons why they couldn’t do this….. I wonder why??
Steve.
Is there any reason why Capital does not or would not adopt this policy given that the new directives more or less indicate that this should be happening anyway?
The effects would, in theory, half the number of trade rejections given that all trades rejected because the price has moved for the client would now simply be filled at the improved price – I can not see many clients ringing to complain that ‘You filled me at a different price’ when that ‘different price’ is a better price.
I suggested this to CMC once and of course they came back with many reasons why they couldn’t do this….. I wonder why??
Steve.
lurkerlurker
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I don't think anyone was asking for chapter and verse of your internal policies, just a general indication. MiFID was drafted partly to improve transparency in financial services. Factors affecting execution are important, and other SB firms have chosen to publish comprehensive execution policies which give clients more information on how their trades will be done. Placing a client (rather than a market or trade size) on dealer confirm is obviously a substantial change in the quality of execution that client could expect to receive. If two clients trading the same market at the same size get different executions (one being filled instantly, and the other being referred to a dealer who rejects the order if the price has moved too far in the clients favour 30 seconds later), then this is obviously something which goes beyond internal policy and becomes a customer service issue.
Do you agree that clients ought to know any relevant factors which will affect the speed and probability of execution? Other SB firms seem to be more liberal about sharing their policy in this area. I don't see what CS would lose by giving us all a little more information. At the very least, if you cannot tell us why clients are selected for dealer confirm, do you have a policy of advising the client that the way their executions are done will change?
I agree, this is a valid question, well said and a very good post.
FXSCALPER2
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I also thought Simon's response was very odd. Clearly, they are not going to refer losing clients to a dealer because that would serve no purpose. Of their winning clients, they can claim some are taking unfair advantage of price lag. Whether this is true or not, it is at least some sort of reason. If, as someone here stated, they make 50% in two days and they are then refered to a dealer, it just tells us what we should all know: bookies have always done this sort of thing.
If CS refer losing traders too, then it will be interesting to know why.
If CS refer losing traders too, then it will be interesting to know why.
I would settle for quick execution and notification on the quoted price. But I agree, one can get burned to the ground trusting CS' delayed execution, especially in a volatile market. The trader is entirely at the mercy of the dealer, and this is a security risk of such a magnitude that it should display a huge BIG RED WARNING SIGN flashing in front of one's screen window at all times. CS should consider changing their execution model, as it is not at the moment compatible with MiFID "Best Execution" directive.
oiltanker
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in the days before computers people were sent charts through the post once a week and they phoned up the broker and people still made money. While its nice to have smooth perfect execution every time the important thing in the long run is to have a good strat?
FXSCALPER2
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But these are not the old days. Prices move quickly and everybody is super fast. If you look at old charts you will find that prices adjusted amazingly slowly, which was one reason why people like Richard Dennis made a killing. He said in a recent interview that information these days is priced in 'all at once' and I think he is right.
In any event, I would like Simon to tell us why they would refer people to a dealer. How can it be a secret why they do that? Unless, of course they refer you for doing well.
Simon has said that if you "overtrade" (his own word), there is a risk that you will be referred to a dealer and manual execution. I do not think it is targeted particularly at the trader, in case s/he doing well at the moment. Simply put, CS try in advance to restrict the short term trader, (who makes many trades), decreasing chances of successful trades, by slowing up execution. Again, the question is, is it compatible with the MiFID "Best execution" directives, to put clients in different trading categories and thus give them limited access to "Best execution"? I would say no, it is not in line with the MiFID "Best execution" directive to do this, they have committed to follow the MiFID directives and should adjust accordingly.
FXSCALPER2
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Well, Simon said he would not discuss why they refer clents. This is silly at best. He has to tell us why they need to refer cleints. What irks me is his repeated claim that 80% of his clients lose. He further states that percentage is the same for DMA, which I am sure is true. If you have any brains, you then have to ask why they have to bother refering people. After all, 80% lose regardless of execution speed. See what I mean?
Listen, the only reason a bookie would ever interfere with your trade is to stop you from winning. These guys are too greedy. 80% of their cleints lose. What is more, it is said these losses are purely due to client's skill of trading. In which case, just let the clients trade and lose. Or are they going to tell us that they are stopping losers from losing? It is extremely naive to believe they have their cleint's interest at heart. They don't give a toss. That is not how the world works. If they are so sure almost everyone loses, then execute their trades and let them lose. I can understand news times and slippage and all that. But It takes soooo long to execute trades in EURUSD on a day like today?!! WTF?
It is all a pile of pants.
Phil Mibbutz
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OK, so 80% of traders lose.Wonder what the ratio is in cash terms? 80% blow a few quid and 20% made huge profits, or vice versa? That's something else we probably won't hear from a SB company!
re. making life difficult for punters by slowing executions, surely they can just close accounts if they want to get rid of those who 'overtrade'?
re. making life difficult for punters by slowing executions, surely they can just close accounts if they want to get rid of those who 'overtrade'?
I agree, "just let the clients trade and lose" is a good way of saying it.
Yes, I would also like to have the correct figures.
stevespray
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Yes - That could be the problem. What if the winning 20% have accounts, on average, ten times the size of the losers? Surely common sense dictates that successful traders will slowly increase stakes (and therefore wins) over time.
Managers from two different firms have told me that clients who consistantly make short sharp profits are bad for the spreadbetting business model (neither of these firms were Capital Spreads I should add). The reason being that short sharp wins simply add up to losses for the firms as book balancing does not take place on such a 'micro' level.
They would have to stop you some how - afterall they are a business.
Steve.
davecrom01
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Without wishing to defend CS here, could I just say the following?
All the talk of "if 80% lose on DMA and CS then just let us trade" is actually missing one point, one that I have made before, namely: That none DMA brokers have to offer their spread in times when you wouldnt have a hope in hell of getting filled with DMA.
In my head, what CS are doing, is in effect passing on the illiquidity of their underlying bank feeds to us. THe reason the 80% is approximately equal is because DMA doesnt get a fill, and neither do we with CS. If CS behave differently, they would have a higher % of winners and thus lower profits than DMA.
As for knowing the full figures of their commercial success, well actually guys we don't have any right to access that information at all.
As for the other current debate, that of "best execution" in relation to IFID - I can't comment as I don't know the true interpretation of the directive with regards to the issue under discussion.
Cheers all,
Dave.
p.s if you read this Simon, you've got a private email on a totally unrelated subject.
All the talk of "if 80% lose on DMA and CS then just let us trade" is actually missing one point, one that I have made before, namely: That none DMA brokers have to offer their spread in times when you wouldnt have a hope in hell of getting filled with DMA.
In my head, what CS are doing, is in effect passing on the illiquidity of their underlying bank feeds to us. THe reason the 80% is approximately equal is because DMA doesnt get a fill, and neither do we with CS. If CS behave differently, they would have a higher % of winners and thus lower profits than DMA.
As for knowing the full figures of their commercial success, well actually guys we don't have any right to access that information at all.
As for the other current debate, that of "best execution" in relation to IFID - I can't comment as I don't know the true interpretation of the directive with regards to the issue under discussion.
Cheers all,
Dave.
p.s if you read this Simon, you've got a private email on a totally unrelated subject.
FXSCALPER2
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You really don't know what you are talking about, do you?
For FX, CS fills are painfully are slow all the time these days, so this is not about 'liquidity'. I do not expect them to fill orders when the markets are going crazy. I use DMA and the craziness (as a result of which spreads widen) lasts a very short period of time.
We never asked Simon to tell us how many people are profitable: who cares? What we want to know is why people are refered to dealer.
As to the number of winners going up if there was no delay or slippage, it shows you really have no idea what you are talking about. First of all, slippage happens both ways. Secondly, the perecentage of winners will not budge even if there were no slippage. Give us a break and keep quiet.
Glad to see the more experienced members encouraging the rookies to participate whilst gently and politely pointing out their errors.
davecrom01
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Well thanks for making it personal, and thanks for making a big assumption. I have traded professionally and profitably full time for over 15 years, so I take a little offence (although not that great a deal to be honest) at the accusation of not knowing what I am doing.
I think you need to look back in the thread, there are people asking Simon for numbers and £'s of the much quoted 80% winners.
Also, if you read back a little, you will see I also have issues with why the delays take place in times of non-volatility - and my comments that I am looking to trial other brokerages for that reason. Maybe you can also consider voting with your feet if you don't like the brokerage?
If you would rather me go away, then I shall watch for others to state the same and if I feel my presence and my views are a problem, then I shall so do.
davecrom01
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Thats okay Paul, I get used to it. I'm a rookie on the boards, and don't post that often for exactly this sort of reason. I also found my posts got more aggressive when I had a bad day. I'm not a rookie trader, so this sort of diatribe just washes over me 🙂
Dave
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Yes you got a point here, but surely most of the short term trades are also balanced up by the book? If they aren't, there might be some additional hedging cost. I guess the internal risk management program takes care of the time frame and update. The frequency of the update is probably calculated on the deficiency in the book.
