Best Thread Capital Spreads

[capitalspreads]

a320

The answer to the question concerning futures prices is that our quote will always equally around the futures price (or difference to the futurres price). If the base market is a future (ie Indices and commodities) in shares and fx our quote is around the spot price.

Yet again I am having to say "we do not bias prices"

Steve

it is nice to see that you know so much about our costs/trade volumes/ business policy / blah blah blah

obviously we do make money (bit odd if we didnt) but this is not based on our clients losing.

Simon

 

[stevespray]

Evening Simon – I wasn’t having a ‘dig’ at any particular company and least of all you personally who, out of all the companies, I respect most mainly for actually having the balls to post on an internet BB.

For what its worth it doesn’t matter one jot if you lay it off or not, the customer has a position directly against you and you get to choose your level of risk on the said position by deciding how much of the exposure to hedge. The point I was making was that hedging costs you money; it’s not a zero sum game. You offer accounts in different currencies which presents further needs to hedge if the customers bet is made in a market where the underlying is out of their base currency (an example for those following the thread – A punter places a £5 per point up bet on the June Dow, as I write this equates a $9.15c long position in the Dow Futures, the value of this required position will of course change as the exchange rates move). There is also the fact that due to exchange rates being rather odd numbers there is never a direct method of hedging a customers position ie in my example you couldn’t hedge $9.15c, you either need to hedge $10 or $5 and stand the shortfall / overrun yourselves. All these factors present extra costs which cut into that bottom line.

In actual fact I do run a business myself and also work to develop other business both for other people and for myself. With that background (don’t want to sound like I’m blowing my own trumpet here) one does develop a feel for businesses which will quickly become profitable and ones which might take rather longer to become profitable. I’m glad to see that you are making money. The big question is, does the amount you make outweigh your overheads and therefore present you with a profit ? I would have to suggest that if you are making a ‘profit’ then it is very impressive indeed based on the length of time you have been running.

I’d be interested in your business policy if you want to discuss it.

You also obviously have offices in Central London which must present you with extremely high overheads both for the offices themselves and the premium that you have to pay staff to man them. Did you ever consider premises outside of London ? Maybe you considered that your image was more important and hence the need to be seen to be where the action is. I would imagine that it would be quite possible to run such an operation from a converted hay barn in the middle of Somerset (lovely part of the country by the way) which would cost practically nothing when compared to that location in the capital.

Wishes,
Steve.

 

[Uncle]

Ohhhhhhhhh Stevie Boy!!!!

Why get so heated about how/why Capital Spreads make a profit or why they are in Central London - most of the Spread Bet firms are, as I assume that is where the experienced staff are located.

Dont spoil the thread for the sake of something to say...............at least Capital - in your own words, "have the balls to respond on a B B"!!!!

John

 

[stevespray]

Didnt think I was getting heated - appols is it looks that way - I'll shut up

Take care,
Steve.

 

[spredbetterstop]

CAPITOL SPREADS

I have been with caps since there inception last year and have never had a problem with orders being executed, that is until the last 2 weeks. In that time I have twice tried to exit a losing trade and been declined and this thankfully for me in a slow moving market it could have been much worse.
My point is that this never used to happen and is the reason i have closed accounts with other spreadbetting co,s.
Needless to say it makes me nervous of entering a trade because i may not get out when i want, and on that basis I will be closing my account with caps after the weekend.
I would add i am only a small player but i dread to think what could happen with a sizable stake and the market really went against me quickly as it can during the delay trying to exit for a 2nd time. ( Dow cash )

 

[Uncle]

Spredbetterstop...........have you taken up the the problem directly with them. If not you should, for it is always possible they could reconcile the position, if the facts are as stated.

John

 

[spredbetterstop]

Uncle

No i havent as simply because if they were to reconcile it then it wuld mean to me that they will try to get away with that sort of trick until you complain. IMHO its enough for me that they done it when it never used to happen, and it has also happened to someone else I know who trades with them. I also dont want to spread bet anymore as this is the third spreadbetting co I have dealt with and imho they are all tarred with the same brush. I hope to leave it a while whilst I learn to trade perhaps the Dow futures through a broker.
Regards, Spredbetterstop

 

[spredbetterstop]

Dow Jones
If you look on page 25 you will see that i posted saying how good they are ie always getting the price i clicked on. I have been trading with them for 7 months with no probs, and now in less than 2 weeks they have stopped me from exiting losing trades on 2 occasions and as i said has happened to someone i know that also trades with them when it never used to.

 

[kevin546]

Spredbettershop

When they decline your order I take it you have to re submit an order to close at the new market price. Did you get out on the 2nd attempt. Would you have felt better is instead of getting a declined order you had been given a re-quote at the new price rather than place a 2nd order.

Unless you take the matter up you will not know if it was human error, an error in the system or as you suspect just the way things are.

Trading is not just about being able to follow a strategy an enter when you want to and get out at the price your systems advise. We also have to trade the mechanics of the market and that involves who you are using as a trading medium. Even direct access brokers will have problems and there does seem to be more associated around the Dow. Then you can get exchange problems. I spreadbet and make do by playing ther rules. I have traded futures on the Liffe exchange using a direct access broker. I can always remember a message being displayed on my trading platform from the broker indicating that this or that exchange had not honoured trades for whatever reason.

I remember thinking that there is not much you can do about that in your trading plan or stop for that matter. If someone had entered then fine they have not lost anything other than the opportunity and there will be plenty more in the future so a shrug of the shoulders would see that one off. But imagine someone who was losing on a deal and decided to close. They would have got an order confirmation and been happy thinking they had lost but at least they were out. Only to find when they next logged in or checked there e-mails the position could be much worse as they were still in the market or the capital was so low the broker had closed it which means you would not have much in your account. There is nothing you can do about this as the order confirmation in these circumstances is worth absolutely nowt. That is one of the risks we take when we trade and your broker has little he can offer when the exchange calls the tune.

This has been a long winded way of saying you might never be able to always have things just as you wish. What I think would be a good way to evaluate this is to establish from Capitalspreads where this is starting to happen now, could it be there customer base has increased and there systems are unable to cope which is why orders in a slow market are not getting dealt with in the expected manner. If you have experienced good service then only one problem over this time might suggest you could go for a similar period without a problem, that would be a reasonable service IMHO. If however you continued to trade and the frequency of the problem was just to often then that IMHO would be the time to walk.

I would address these issues to Simon to see what his take on it is, at least he appear reasonable on this site which no other Spreadbetting company does. I do not hold an account with CapitalSpread but must admit I have been thinking of opening an account with them. Issues of performance like this do give rise to concern. Good luck whatever you decide.

Maybe Simon if you read this account you could respond.

Kevin

 

[spredbetterstop]

kevin 546
Yes I did get out on the seconed attempt and yes I would out of the two prefered a requote. At times like that a certain amount of panic sets in as im sure you would understand, when this first happened just under 2 weeks ago I clicked to re-submit my order but in my haste forgot to reenter my stake as this disappears from the box after you have submited an order and was declined a 2nd time. I understand what you are saying in your post and accept that things are never as perfect as we would like them to be.
Having used two other s/betting co,s before Caps it made a refreshing change not to have the stunts pulled on you that they got up to, and now the same sort of thing is starting to happen not just to me but also to a friend of mine who uses Caps.
It just makes me wonder if perhaps the honeymoon is over.

 

[kevin546]

Spreadbetterstop

If you are day trading a tip I can offer you, as soon as I have entered a position I know my stop and move it throughout a deal if in profit and if it does not look like working out I am still looking to see if I can reduce my stop. Again as soon as I have entered I immediately prepare the order ticket for closing as I suspect you do. I have played with the CapitalSpreads demo and in addition to preparing the closing order so it is ready to be hit as soon as you need to I would go one stage further and add the amount again into the trading page just in case it does not go through. At least then you are ready to strike quickly.

Out of interest what time was the trade and how small was it and who were the other companies you experienced this problem with.

I use CMC just to trade FTSE Cash (daily) and they offer you a re-quote if the market has moved so it give you an option to take the next price range should you miss out on what you wanted. In my experience this has only happened if the market is moving fast or I have traded at an amount that CMC decide to pass to a trader rather than deal through the computer system. On the FTSE cash this appears to be anything above £25. This causes a delay in the order being filled and CMC claim it is to assess the market depth. I do not have a problem with this but feel this is something that should kick in at £50 or £100 to represent the true market mechanics of trading. However I have repeatedly traded at £25 without a problem so have accepted this is the level of instant trading with CMC. At this level I cannot fault them.

I also traded with CityIndex by phone before they provided online dealing and they were fine. I am currently making up my mind which to add to my trading, CapitalSpreads with the tighter spread or CityIndex who offer a less favourable spread but previous service was very good. As I day trade I will probably try CapitalSpreads but if the problems you have recently experienced become the norm then I will swiftly move on. In any a case spreadbetting is better suited for longer trading strategies such as swing trading which I intend to add to my own trading.

 

[spredbetterstop]

Hi kevin 546
Thanks for that post and i agree with what you are saying, With regard to trade size i am only a small player and the stake size was only £1 per pt and the time I finally got out of the trade was 15.02 our time. As we know the Dow can make a significant move around that time luckily it didnt this time but I felt I had already lost enough and as it turned out it was more than I wanted due to what happened.
The other spread co,s were Finspreads and Deal4free. Again what worries me is that in 7 months I always got in or out with no problems (apart from the fact that there might several points slippage which I am fully prepared to accept) and now all of a sudden Ive had two exit orders declined in less than 2 weeks.
As I said i am only a small player and intended to stay on a small amount no matter how long it took until such times i felt I had enough experience to up the ante. But now feel that spreadbetting is stacked against you to much and is far from anything like a level playing field.
Best regards, spredbetterstop.

 

[spredbetterstop]

Looks like my post,s count has stayed on 23 for the last five posts. is there a reason for that or has someone else got it in for me. Just tell me if im getting paranoid.
spredbetterstop.

 

[Skimbleshanks]

Your post count is the total made, and automatically alters after each post. You have now made 24 posts, and therefore each post of yours shows the total, ie 24.

If yours still says 23 then you need to refresh the page.

 

[kevin546]

Spredbettershop

It would be nice to hear what Capitalspreads has to say regarding this matter. If as you say the market was quiet then it makes you wonder. However at 3.02pm our time that is only 32 mins into the US market and just like any market the 1st 30 - 90 mins has the most volatility and the best speedy gains (if you get it right). My guess is the market was buzzing but I am still surprised that a trade of £1 cannot go through. I can only guess you were held up due to the market being busy, as you state anytime between 2.45 - 3.45pm you can get sharp reversals.

I must admit that from the research I have made into trading with CapitalSpreads the fact that your order request is declined is very much a negative IMHO. I have found it is much better to get your order into the market at least with CMC things are not cut off dead like this. If the market has moved you get the option of a different price. It is no surprise that the quote always tends to be less favourable but at least you are offered a 'get out of jail pass' and can close out at the new quote which is usually 1 - 3 points from what you originally requested. I have never had the new quote refused so have faith in what is offered will be honoured which gives some confidence. However this is on the FTSE and maybe the practises employed on this instrument create more demands on the spreadbetter hence the problem you suffered. I went through a stage of trying to beat this by refusing the new quote and re-submitting on a better price however all this does is get you out later and at a less favourable price.

Anyway good luck

Kevin

 

[stevespray]

Spreadbettershop……

From what Simon has stated on this thread it would appear that there is no danger in entering a stop at your desired exit level. It has been stated that Capital base their quote around the market price and do not bias it in anyway. Basically it comes down to knowing the market that you are trading. I’m not just talking about ‘the dow’ as the underlying but also the actual instrument that you use if you want to trade via spreadbetting. At first glance the different companies appear to offer identical instruments in ‘daily dow’ but this isn't exactly true. While Capital has said that they never bias their quote other companies clearly do. Some companies even have a clause in their terms and conditions which warns you that you are betting on their market and not the underlying market and that they can vary their markets away from and, more than, the underlying. This obviously represents a risk if you enter stop or limit orders as you are in effect telling the company what you will be doing if ‘their market’ reaches such a point. This isn’t the case with Capital who have stated that they don’t bias their market and therefore can’t manipulate a ‘stop run’.

Having said all the above you do appear to have raised a valid point about execution of orders in real time. From what you have said it would appear that there is a situation which may need looking at as a situation could arise where it is almost impossible to get an order executed in a fast or volatile market due to the market having moved during the time between orders being submitted and orders being dealt with. This problem could of course be worsened due to the fact that volumes traded in such markets are normally considerably higher than volumes in normal market conditions, the upshot being that the time between submission and execution is increased on the grounds that the spreadbet company would also see a proportional increase in trade. Obviously where there is an increase in the time it takes to deal with an order there is also an increase in the chances of the market moving away from you order price before it can be dealt with. Market range is a function of time.

At the end of the day you need to work out which company’s strengths suit you trading style. From what you have stated it sounds like you need a company which will provide you with a live and tradable price at the moment you want it in all reasonable market conditions and that you aren’t particular about needing stops . On that basis you need to establish which companies actually provides that service and trade with them or, more simply, use Capitals stop orders on a market which they say doesn’t get biased.

Steve.

 

[rglenn]

I think you will find that with Capital spreads your electronic order is actually executed by actual people when it reaches your buy order or stop order rather than their computer system doing it automatically.

I have found this out to my cost as the market actually hit my order a couple of times without me getting a fill until I phoned up to query it.

 

[kevin546]

I am of the opinion that if you are trying to day trade with spreadbetting companies and you are concerned both about the exact execution of entry and exits then your style of trading may not be best suited to spreadbetting.

If however you are position or swing day trading or applying your strategy on holding positions for several days then the exit price is less important. It is probably not going to make the difference between profit or loss on a deal as a day trade could. On the other hand a poor execution system of entry / exit and or application of stops will have a bearing on lost points from your overall profit and some slightly larger losses than you would otherwise have got.

It would be interesting to know from Capitalspreads why they cannot offer you a bit of comfort when executing a trade. At present you decide to place an order to enter or close but you order is declined, this appears to me to leave you high and dry and out of the queue. If however you knew that should the price move and your order could not be filled at the price you requested then if you were presented with a requote at the new price you are still in the queue and should be dealt with at the new price. This at least would provide me with a bit more confidence in the execution system applied by Capitalspreads. I wonder if this is something they could consider making available to clients in the future.

When trading through the exchange there are different types of order routing to assist with such problems but the simple order of market at best is straight forward so why cannot spreadbetters at least offer to fill your order at the next best available price if they are unable to meet your original request. If you are not happy with the new quote you can always refuse it but at least it gives you an option and would sem better than the present position. As far as I am aware the only spreadbetting company that offers this service is CMC. If they can do it why cant the others. Capitalspreads ahs appeared very good value and fair by the comments on this bb so why not review this aspect of the service they provide to offer the customer a reasonable deal for the active traders.

Stevespray again another good post, keep em coming!

Kevin

 

[Uncle]

Kevin, I think your above post is excellent. However if Spreadbetterstop cannot be bothered to take up his problem directly with Capital Spreads and let us all know the outcome, methinks there is little point in we on this Board speculating as to the reason about the problem as stated.

My own experience of trading with Capital has been without problem, albeit when you hit the button, and that notice comes up, "Please be patient while we confirm" it can leave you with a bit of a sinking feeling wondering what price you will be filled at, even though I have ALWAYS been filled at the quote. On the other hand where I have placed a stop they have always closed my position at the requested price, even when the position appears to remain open after the stop price has been exceeded.

I doubt we will get a response from Capital directly to the Board regarding Spreadbetterstop's complaint for this would surely be breaking a confidentiality agreement between the company and client.

John

 

[kevin546]

John

Thank you and I quite agree. Maybe Simon could discuss the mechanics of the order decline and company view regarding a quote facility in place of a decline. This would indicate if willing, not willing or just unable to support such a facility with reason without reference to individuals. That seems fair enough to me.

I wonder if you could let me know how long you are held by CapitalSpreads with the notice 'please be patient while we confirm' . Have you noticed if this delay increases as you increase the trade size.

Kevin