I really like Capital spreads but I also use Oanda for spot fx, and they are simply superb. A few points on Oanda first.
One the things that impresses me most with Oanda is the interest payment. They pay close to money market rates so are not creaming anything off the top for themselves. Nearly all SB's widen the bid-ask on their interest rates you sometimes feel you are being punished. Still, this isn't the end of the world, because I enter SB future positions (vs rolling dailies) for medium term trades.
The other thing with Oanda is the speed of execution and transparency, as other folk on this board have commented on. They are extremely fast because the system is fully automated. In the strictest sense they don't execute stops order right on your stop level, but the order to buy or sell goes through when that level is hit. That means you get the next available tick price. Usually, there is no difference in the price but in a fast market you may get slipped a bit. You have a lot of control over the ordering process though. Users love Oanada and because of their technology Oanda guarantees it suffers no slippage while giving clients what appears to be instant WYSIWYG execution. There is no reason why SB's can't operate on this basis, but the technology investment would be huge. Oanda are so far ahead of the pack in FX they quote EUR/USD to two more decimal places than everyone else. They call these pipettes. The interbank market is only starting to catch up with this. In a euromomey article I read that Barclays has recently started offering pipette style trading. In the fx market, which I focus on and which I think is the most active mkt for Capital spreads (?), transparency is paramount, all the more so when you are going through an SB.
My understanding is they use a similar hedging policyof bucketing up risk and hedging out according to the risk parameters.
Now on Capital spreads:
All this said and done, I think we need to compare Capital Spreads against other SB's. CMC seems to offer WYSIWYG one-click dealing and City Index usually gives me my quotes in fx, though the latter have a 5 point spread so they can execute fast knowing they will usually still be inside the spread. Capital spread falls down on execution speed but their margining system is very good (though an IMR of 999 on Google seems a bit high!), their spreads are very tight for an SB (the best in my opinion), their range of products is great and most importantly they come across as honest. They always call back if there is a problem. They are the only SB where I don't think its a case of me against them. This is a great achievement Simon!
I think the platform could be improved by adding a bit more functionality to give the customers a greater degree of freedom:
* Trailing stop. Right now you have to put in a level, and keep adjusting that level as the price moves in your favour. This can generate a lot of ticket e-mails in the old inbox. Other SB's don't offer it. It is simple and would be a great advantage for yourselves. So I ask, why don't you offer a trailing stop.
* Like Oanda you could offer Fill-or-kill function so people's orders don't get hit at badly slipped prices. This would reduce our anxiety while we wait to see if our orders have been filled and at what level.
* Please oh please introduce consolidated end of month statements like all the other brokers.
* I've noticed that while you offer quarterly fx contracts with a Mar expiry, this was not the case for fixed income and other markets. It may be updated now, but it would be good if you could at least match the competition when it comes to adding the next quarters contracts to the list.
All these requests and yet I must say I love Capital spreads. Most of my big orders still go through City Index (yes, even with the horrible spreads), because of the robustness of their system (also, they sometimes don't kill your order if your price just touches your stop but comes straight off again, neither to Man financial). That said, I am happy to move my business your way if you can deliver on these over time and I'm sure you will because you only have to look at the evolution of this competitive marketplace over the past two years to know that all of this stuff will be coming sooner or later and its better to lead the pack than to be a laggard.