Best Thread Capital Spreads

[pboyles]

Why do you think Metatrader has gone to so much trouble to delete all the evidence?

MetaQuotes

http://www.trade2win.com/boards/for...tor-virtual-dealer-other-plugins-setting.html

 

[capitalspreads]

pboyles

i know ... the other companies claimed to be doing what we do (and what we claim to do!) there really is little that i can do to get around this perception except state plainly and in clear english that this is what we do. I am the CEO . i live in england.. so does my family and so do all the directors of the company .

if we are lying then we will go to jail. None of us conveniently lives in the USA or Ireland!

I can assure you that our auditors are jsut as concerned by the E&Y / worldspreads events as you are. They do not want to be hauled in front of the courts/FSA for a tiny little account like us.

I would assume that any clients with funds in Capital Spreads will be triply protected now (segregated funds/FSCS/Deloittes) !

by the way our spread betting platform is not MT4

simon

 

[capitalspreads]

1. Why is it that this glitch happened and just happens to be the perfect software glitch for a spread betting company as in an untradeable spike that hits stop orders? You answer as in a simple human error that can cause this means that a simple human error performed in the wrong way can also manipulate this?

the Fair Value is adjusted every day to take into account time/interest rates/dividends etc. most days this is virtually nothing but on Tuesday evenings occasionally this is quite big if there has been a big dividend. The dealer was trying to adjust this FV but put in the wrong number (i think he put in a negative instead of positive / or the other way around)

2. From the thousands of accounts how did you manage to make sure that all trades effected by this were fully refunded? because we have a trade display of all trades by time and price. any trades over a certain period will be picked up and corrected/reversed. We cannot 'delete' trades as this was one of the program restrictions i insisted on eight years ago when we built the system.

3. How do you regulate and ensure that this is always picked up and can never happen without being spotted? Because you always talk about averages over a time period for a few spikes a day in the system they would be untraceable against thousands of other orders?

all our prices come from the exchanges/ liquidity providers the only adjustment ever made is to the FV on the cash indices and Quarterly Markets which have a set formula. Any client who disputes trade prices can do so and we investigate. We must analyse versus other trades madde versus historic exchange data etc.

4. What is concerning is that you state that just one dealer had the power to perform this manipulation,What if it was a 1 pip spike? 2 pip spike? 3 pip spike? hardly noticeable but profitable for yourselves? if they have visibility as to your companies total exposure with stop limits do you see how this can be abused?

i think that this is a fair question. but it would be noticable if we did this as clients who watch the futures/equities/FX markets next to our price would be all over these threads if we did this

simon

thanks,

Christian

 

[capitalspreads]

gle

no as far as i know we have not changed anything. we would never intentionally do this. buy we had some upgrades recently and this might be a misfunction side effect

i am not hearing other problems of this nature. is it still happening?

simon

 

[gle101]

gle

no as far as i know we have not changed anything. we would never intentionally do this. buy we had some upgrades recently and this might be a misfunction side effect

i am not hearing other problems of this nature. is it still happening?

simon

Thanks Simon, when I click to buy on the price in the dealing ticket window I might not get that price. It seems like your internal deviation based on the clicked price is not functioning. I will get slippage for or against me, while previously I have always gotten the price clicked on.

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

 

[southport]

"Capital spreads" could you tell me how I can close my account with capitalspreads.com which as not been used for many years and get the funds back to another bank account in my name. It as been that long I cannot remember which bank account I used to fund my account and what year, I have tried to email your company twice for help and they have not replied . I have spoke to your company on the phone and they won't bank statement's and a letter off my bank saying it is closed . Why can you not send me me a cheque its my money plus it's only a small amount and banks charge for old bank statements. Please Help................

 

[stevespray]

steve

this is how we read the rules (but the FSA apparently won an award for plain english a few years ago which had those in the industry, who have to wade through the rule book, coughing into our drinks!)

FSA rules on RETAIL client money DO NOT ALLOW companies to take funds as margin against their positions (strange as this might seem). If you are designated as Professional AND have agreed collateral title transfer on your money then a company may intermingle your funds with theirs. Generally a company will insist on this if you are very large or you take big positions in markets like small cap stocks that require large cash deposits with brokers.

NO we cannot remove funds to cover running losses (as this might impact other clients funds within the segregated fund) . What we can do is offset winning bets against losing bets (but only up to the level of the winning bets). So if clients have £30m deposited but are running £1m profits and £6m losses the company MUST still retain £30m in the segregated accounts.

So the companies MUST have the resources to be able to fund hedging losses even though the clients may not yet have taken them.

WHEN AND ONLY WHEN a loss is realised by the client can the money be taken from the segregated account

This is how Capital Spreads has always read the rules (and we have had several inspections from the FSA on this matter and they seem to agree)

Simon

Good Morning Simon,

Thanks very much for your comprehensive reply.

Based on what you've outlined reveals the following when applied to the WS accounts which they submitted last year...

They claim that cash in hand was £27m. Included in that £27m is a liability of around £18m which is in the 'client segregated accounts'. This implies that the firm has around £9m of its own money. However, the accounts specify that the firm has just over £18m placed with 'market counterparties' (assume this means other brokers / exchanges).

It therefore appears fairly clear that the firm were using client assets as deposits with certain counterparties since the firm didnt appear to have enough cash of their own?

If that was the case then how did the audit miss that?


Steve.

 

[pboyles]

pboyles

i know ... the other companies claimed to be doing what we do (and what we claim to do!) there really is little that i can do to get around this perception except state plainly and in clear english that this is what we do. I am the CEO . i live in england.. so does my family and so do all the directors of the company .

if we are lying then we will go to jail. None of us conveniently lives in the USA or Ireland!

I can assure you that our auditors are jsut as concerned by the E&Y / worldspreads events as you are. They do not want to be hauled in front of the courts/FSA for a tiny little account like us.

I would assume that any clients with funds in Capital Spreads will be triply protected now (segregated funds/FSCS/Deloittes) !

by the way our spread betting platform is not MT4

simon

So it comes back to the old question, why don't the 'legit' brokers do something about all the crooks out there?

 

[the hare]

So it comes back to the old question, why don't the 'legit' brokers do something about all the crooks out there?

I'm not sure there are any "legit" brokers, but assumming one of the participants no longer wished to participate in the "circle jerk" what sort of self regulation could the industry realistically impose ?

 

[pboyles]

I'm not sure there are any "legit" brokers, but assumming one of the participants no longer wished to participate in the "circle jerk" what sort of self regulation could the industry realistically impose ?

A trade body could easily be set up to take legal action against the dodgy operators. Many of them are committing good old fashioned fraud. But of course it won't happen, when you live in a glass house you can't throw stones.

And of course when you've got friends in high places you can always send word to the policy committee to knock it on the head

 

[scose-no-doubt]

the Fair Value is adjusted every day to take into account time/interest rates/dividends etc. most days this is virtually nothing but on Tuesday evenings occasionally this is quite big if there has been a big dividend. The dealer was trying to adjust this FV but put in the wrong number (i think he put in a negative instead of positive / or the other way around)

all our prices come from the exchanges/ liquidity providers the only adjustment ever made is to the FV on the cash indices and Quarterly Markets which have a set formula.

This is the kind of thing that I don't understand. If you're just a bookie, then why can you just not offer prices based directly on the underlying? Why go to the trouble of adjusting to cash and all of the other nonsense if you gain nothing from the FV adjustment process? If the number of exchange traded instruments available can satisfy the most sophisticated of investors, then why do retail investors need something else?

 

[stevespray]

This is the kind of thing that I don't understand. If you're just a bookie, then why can you just not offer prices based directly on the underlying? Why go to the trouble of adjusting to cash and all of the other nonsense if you gain nothing from the FV adjustment process? If the number of exchange traded instruments available can satisfy the most sophisticated of investors, then why do retail investors need something else?

I think you'll find that "FTSE Cash" is purely a 'retail investor' product. The pro's trade FTSE Futures. The various SB Co's do gain from FV adjustment on their cash based products since their interest calculations on such products are much steeper than the interest which is priced in (and decays) on the underlying futures product.

If they didn't adjust it daily then there'd be a huge risk of arbitrage between an SB product and the underlying (or indeed another SB Co's product based on the same underlying.)


Steve.

 

[scose-no-doubt]

I know that but it's all horse5hit. If they're getting feeds from whatever data providers why not just make markets on the feeds. You're trading their market rather than the anyway so why do they have to use these FV adjustments etc when they can just use the average/low/high/whatever of the feeds to set prices?

 

[gle101]

I know that but it's all horse5hit. If they're getting feeds from whatever data providers why not just make markets on the feeds. You're trading their market rather than the anyway so why do they have to use these FV adjustments etc when they can just use the average/low/high/whatever of the feeds to set prices?

Why don't you accept there is market makers and that some like to trade the products they offer? Larger stake size one should trade DMA, smaller stake I see no reason why you shouldn't trade SB.

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

 

[gle101]

I know that but it's all horse5hit. If they're getting feeds from whatever data providers why not just make markets on the feeds. You're trading their market rather than the anyway so why do they have to use these FV adjustments etc when they can just use the average/low/high/whatever of the feeds to set prices?

Maybe I misdirected my post to you, to pboyles would probably be more accurate.

 

[southport]

"Capital spreads" could you tell me how I can close my account with capitalspreads.com which as not been used for many years and get the funds back to another bank account in my name. It as been that long I cannot remember which bank account I used to fund my account and what year, I have tried to email your company twice for help and they have not replied . I have spoke to your company on the phone and they won't bank statement's and a letter off my bank saying it is closed . Why can you not send me me a cheque its my money plus it's only a small amount and banks charge for old bank statements. Please Help................

Case closed Got my cash back

 

[capitalspreads]

scouse no doubt

the FV is a pretty simple calculation and we actually get it from Bloomberg who have a page dedicated to it! It generally does not change much through the week until tuesday evening when shares go ex dividend.

We do quote a wide array of markets based upon the futures and you can check these exactly against these markets if you have a boring hour or so (or look at the historical charts of our price against the exchange charts) . In fact we only quote a few that actually use the FV pricing (all of these are indices markets.. DAX, DOW, FTSE, S&P etc)

steve

i think you were looking at the wrong numbers. i think they were saying they had 30m of client funds ..plus 11m of their own . of the 30m only 18m was Retail client monies the other 12m was professional. but this does not really matter as they were not telling the truth anyway so arguing about this seems a bit pointless.

pboyles

we do have an industry body it is called the SB association and is incorporated into the FOA (Futures and Options Association). Unfortunately we cannot go into other companies finances.

to be honest this is a difficult problem. If we only allow massive companies to operate then competition will ossify. We would probably be left with four companies (CI, CMC, IG and us). great for LCG of course but hardly the solution that you or other traders are looking for. incidentaly there is a big argument going on in Australia at the moment where the major players want all participants to place a bond of a couple of million AUS dollars with the regulator (they actually started at $5m!). This would be straight cash over and above everything else. This would immediately close down alot of the smaller players and (more importantly) keep the small and nimble out of the game forever. It is OK with LCG but on a fairness level I am personally unhappy with it.

cheers
simon

 

[gle101]

Well Simon, I never got a satisfactory answer on the execution model as well as the 1 point spread on the Dow?

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

 

[capitalspreads]

gle

i was away on holiday when you asked but i did request the dealers to inform me of any change and they said no ! they had no other comments to this effect from other clients either.

i have to say that i have tried to replicate what you are getting and cannot do so either. the price i trade at is always the one i get.

on the dow we are having never ending probs with the new price engine stability but we are trying it on the live DAX at the moment so getting close to a general release. Once we have the go then we can look at spreads.

Simon

 

[gle101]

gle

i was away on holiday when you asked but i did request the dealers to inform me of any change and they said no ! they had no other comments to this effect from other clients either.

i have to say that i have tried to replicate what you are getting and cannot do so either. the price i trade at is always the one i get.

on the dow we are having never ending probs with the new price engine stability but we are trying it on the live DAX at the moment so getting close to a general release. Once we have the go then we can look at spreads.

Simon

Thanks Simon, Yes I will make some video recordings of the execution just to find out if I am imagining things. Sounds good on the progress of the price engine, hopefully it will lead to that you can offer 1 point on the Dow.

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