Best Thread Capital Spreads

[capitalspreads]

I have talked about this so many times

We put traders who in our opinion are scalping on to dealer referal. That is it. In reality everytime you trade you have a 50/50 chance . you might be very good and move this to 75/25. But when we come across a client who trades 200 times and never loses ?!! How many times can you toss a coin and it comes up heads every time?

What would you do? Just continue to let him do it?

On Mifid. I am sorry but do you really believe if this was contrary to Mifid/FSA regulations that we could do it? That somebody, by now, would not have used this to justify an FOS complaint against one of the SB companies? Systems get faster and faster and there will probably be a moment when we have nobody on referal but even the biggest SB company only claims that 99.5% of trades go through in 0.1secs (actually pretty much the same as us). What happens to the other 0.5%? Presumably they go through a different process.

Simon

 

[Eric Geddes]

Simon,

Previous message timed at 7.30pm! Thought I was watching you live on Sky News at just before 7.30pm tonight - did you have your Blackberry under the desk out of the sight of Teacher Jeff Randall or were you recorded earlier?

PS - agree your comments on the City becoming less attractive to financial brainpower.

 

[gle101]

What would you do? Just continue to let him do it?

On Mifid. I am sorry but do you really believe if this was contrary to Mifid/FSA regulations that we could do it? That somebody, by now, would not have used this to justify an FOS complaint against one of the SB companies? Systems get faster and faster and there will probably be a moment when we have nobody on referal but even the biggest SB company only claims that 99.5% of trades go through in 0.1secs (actually pretty much the same as us). What happens to the other 0.5%? Presumably they go through a different process.

Simon

Yes, let him continue or close the account. "Individual discrimination" is clearly against the MiFID financial "Best execution" directive. You and the other SB companies might get away at the moment creating your own rules, but I think you all are up for a big surprise. A casino cannot manipulate the tables, but they can exclude the gambler from accessing the casino. This should apply to the SB industry as well.

____________
"Take control with Risk & Money Management"
http://www.trade2win.com/boards/pla...140296-visualrmm-interactive-new-concept.html

 

[Ross Spur]

Yes, let him continue or close the account. "Individual discrimination" is clearly against the MiFID financial "Best execution" directive. You and the other SB companies might get away at the moment creating your own rules, but I think you all are up for a big surprise. A casino cannot manipulate the tables, but they can exclude the gambler from accessing the casino. This should apply to the SB industry as well.
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The problem is that putting the squeeze on SBs might result in generally wider quoted spreads and a worse deal for many clients. No 1pt Dow, for instance.

 

[tim3]

Spread betters make their own prices and have their own systems thats the way they work,I have traded with them for over 10 years and they are much better now than they were but in fairness I rarely had an issue with them.

However I don't trade in such a way that a point or so makes a big difference which seems to be the area that causes the most issues.

I suspect many who complain have found a way of exploiting a sb's system/prices that does not work in the real market if it did why waste time arguing with the sb's just trade the real market?

 

[gle101]

Spread betters make their own prices and have their own systems thats the way they work,I have traded with them for over 10 years and they are much better now than they were but in fairness I rarely had an issue with them.

However I don't trade in such a way that a point or so makes a big difference which seems to be the area that causes the most issues.

I suspect many who complain have found a way of exploiting a sb's system/prices that does not work in the real market if it did why waste time arguing with the sb's just trade the real market?

I agree it has gotten much better but we are not there yet. This issue is not whatever one like to trade with SB or not. I do not post on this in order to complain about CS execution service, which I by the way think is the best in the industry. The subject is interesting, and affects many traders so I find it interesting to express my viewpoint on this. With all respect, the last part of your post is not relevant as it has noting to do with the regulation that is in place for this growing industry.

____________
"Take control with Risk & Money Management"
http://www.trade2win.com/boards/pla...140296-visualrmm-interactive-new-concept.html

 

[gle101]

The problem is that putting the squeeze on SBs might result in generally wider quoted spreads and a worse deal for many clients. No 1pt Dow, for instance.

Ha ha, yes that could be the case. But I think the increasing market competition will keep the spread narrow for a long time to come.

____________
"Take control with Risk & Money Management"
http://www.trade2win.com/boards/pla...140296-visualrmm-interactive-new-concept.html

 

[capitalspreads]

gle 101

we will have to agree to disagree. If a Market Maker loses a case in FOS for this reason then i will accept I am wrong. Trade acceptance is covered in our terms and the order execution policy.

If a client comes on and deals in massive size in a stock where there is just no liquidity we will reject the trade and suggest to the client that we work an order for him. I assume you have no problem with this. This is how it would work on the exchange.

Our systems (and i believe everyone elses) have a buffer where if the price request is outside the bid/offer range when the system gets it then the trade will be automatically rejected by the computer. What is the difference between being rejected by the computer and being rejected by a human being?

Simon

 

[Ross Spur]

gle 101

we will have to agree to disagree. If a Market Maker loses a case in FOS for this reason then i will accept I am wrong. Trade acceptance is covered in our terms and the order execution policy.

If a client comes on and deals in massive size in a stock where there is just no liquidity we will reject the trade and suggest to the client that we work an order for him. I assume you have no problem with this. This is how it would work on the exchange.

Our systems (and i believe everyone elses) have a buffer where if the price request is outside the bid/offer range when the system gets it then the trade will be automatically rejected by the computer. What is the difference between being rejected by the computer and being rejected by a human being?

Simon

I've had years of experience of being rejected by humans, so I can cope with that now.

 

[gle101]

I've had years of experience of being rejected by humans, so I can cope with that now.

Ha ha.

____________
"Take control with Risk & Money Management"
http://www.trade2win.com/boards/pla...140296-visualrmm-interactive-new-concept.html

 

[gle101]

gle 101

we will have to agree to disagree. If a Market Maker loses a case in FOS for this reason then i will accept I am wrong. Trade acceptance is covered in our terms and the order execution policy.

If a client comes on and deals in massive size in a stock where there is just no liquidity we will reject the trade and suggest to the client that we work an order for him. I assume you have no problem with this. This is how it would work on the exchange.

Our systems (and i believe everyone elses) have a buffer where if the price request is outside the bid/offer range when the system gets it then the trade will be automatically rejected by the computer. What is the difference between being rejected by the computer and being rejected by a human being?

Simon

No problem Simon, I know we disagree on this issue.

Large size referral to a dealer is no issue for me. It is a big difference being flagged for referral to a dealer, this both in time you lose and changes of getting the order at all. I doubt very much that referral to a dealer is of human art in the first place (except for large size). Being on referral to a dealer you are simply not competing on the same level as everybody else, and by this action you get lower odds. We are trading on prices given by the SB, that is all we can do. If you don't like a client and his trading style close the account. In the rest of the gambling industry this is standard. For one reason or the other this does not apply to financial SB, why? Instead some companies play games, they give you a delay, apply slippage, or even manipulate if you get the oder or not, depending on if you are on the right side of the trade. I am not implying you adopt these methods of restricting a trader, in fact I found out these past years that you are going in the other direction.

Your terms and the order execution policy does not override the MiFID "Best execution" directive, in fact it is the other way around.

____________
"Take control with Risk & Money Management"
http://www.trade2win.com/boards/pla...140296-visualrmm-interactive-new-concept.html

 

[capitalspreads]

gle

Sorry for the confusion i did not mean that or Ts&Cs overides Mifid/FSA (nothing does that) i am just saying that how we execute trades/orders is explained in full in the terms/order execution.

Re the 'best execution' rule. I am just indicating that you are reading the full meaning slightly differently to how we see them.

Simon

 

[Ross Spur]

gle

Sorry for the confusion i did not mean that or Ts&Cs overides Mifid/FSA (nothing does that) i am just saying that how we execute trades/orders is explained in full in the terms/order execution.

Re the 'best execution' rule. I am just indicating that you are reading the full meaning slightly differently to how we see them.

Simon

So presumably the T&Cs couln't say that CS has the right to discriminate between clients if they're making a profit by trading in what you term a 'dubious' way? This is like bookies quoting different odds to different clients.

 

[gle101]

gle

Sorry for the confusion i did not mean that or Ts&Cs overides Mifid/FSA (nothing does that) i am just saying that how we execute trades/orders is explained in full in the terms/order execution.

Re the 'best execution' rule. I am just indicating that you are reading the full meaning slightly differently to how we see them.

Simon

OK, sorry I misunderstood you. Yes good that you point out that the Ts&C's do not override the MiFID, it seems to be a misconception among many SB traders.

____________
"Take control with Risk & Money Management"
http://www.trade2win.com/boards/pla...140296-visualrmm-interactive-new-concept.html

 

[PipStar]

You're all losing your time quoting MiFid, it's useless. The UK does not have a strong regulator like in the USA, that's why spreadbet companies and other UK brokers get away with it.
When is the last time these spreadbet companies have been audited by their regulator for fair trading practice? Have any of them ever been fined for providing unfair trading conditions that many traders complain about? Nothing happens because no one looks at what they are doing.
Don't tell me only USA brokers have been bad. FXCM, Forex.com, Ikon, Interbank FX to name a few have all been fined for unfair practice at some stage by the U.S regulator, the NFA. In the USA brokers have 15 minutes to cancel a trade if something's gone wrong in their view, in the UK there is no time limit. The only advantage in the UK is that traders funds are segregated and the FSA provides insurance up to a certain amount and thats all.

 

[tar]

@ pipstar agree , if CS or CMC ... is in the US they will get fined in no time ...

 

[gle101]

You're all losing your time quoting MiFid, it's useless. The UK does not have a strong regulator like in the USA, that's why spreadbet companies and other UK brokers get away with it.
When is the last time these spreadbet companies have been audited by their regulator for fair trading practice? Have any of them ever been fined for providing unfair trading conditions that many traders complain about? Nothing happens because no one looks at what they are doing.
Don't tell me only USA brokers have been bad. FXCM, Forex.com, Ikon, Interbank FX to name a few have all been fined for unfair practice at some stage by the U.S regulator, the NFA. In the USA brokers have 15 minutes to cancel a trade if something's gone wrong in their view, in the UK there is no time limit. The only advantage in the UK is that traders funds are segregated and the FSA provides insurance up to a certain amount and thats all.

No it will come, EU consist of many countries and I believe the MiFID will increase its important as regulator. I agree, the FSA need to be more effective in overseeing these directives and setting correct standards for the industry. I will see how the FI (same as FSA) will act here in Sweden overseeing the regulation. CFD's and SB is illegal in the US, and that is not only because of the character of the products itself. I wonder if financial SB will be around 10 years from now, my guess is it will become taxable and therefore lose its gambling status. CFD's will take over, with stronger regulation connected to it the product might stand a chance of getting access to the US market.

____________
"Take control with Risk & Money Management"
http://www.trade2win.com/boards/pla...140296-visualrmm-interactive-new-concept.html

 

[gle101]

@ pipstar agree , if CS or CMC ... is in the US they will get fined in no time ...

What have CS done wrong lately? But yes, Simon and the others need to step out of that old "Bookie" attitude (regarding referral to dealer) in order to progress in the right direction.

____________
"Take control with Risk & Money Management"
http://www.trade2win.com/boards/pla...140296-visualrmm-interactive-new-concept.html

 

[tar]

What have CS done wrong lately? But yes, Simon and the others need to step out of that old "Bookie" attitude (regarding referral to dealer) in order to progress in the right direction.

If you answer your own questions what u need me for ?

 

[Traduk]

gle101,

I think that it is highly unlikely that spread betting will become taxable (against the clients) in the UK.

The distinction between DMA and spread betting is that with DMA the client enters into a contract with the counter-party to deliver something with an unknown future but tangible price. With spread betting there is no legal obligation to deliver anything other than cover debts as the bet is on the movement of a price irrespective of how it is generated.

The UK tax system extracts a fairly sizeable revenue from spread betting and is right in treating it as a betting tax which I guess in built into the SB companies pricing model and paid as the bet is taken out.

I feel sure that the vast percentage of betters lose and even for those that win , there is no way they would take on the spread and having to trade buying ask and selling bid and then pay capital gains tax on profits.

Without the tax free status Spread betting would contract into oblivion for many of the companies.