Best Thread CMC Markets owner answers your questions

[Ross Spur]

hi ross
Think it is harder to scalp if spreads are wider but still possible. dont forget bank spreads widen during volatile periods. you should see some of the quotes we get in from major banks during volatile periods they can be all over the place at times.

no idea about mifid if you want you can contact me compliance department and they will fill you in

cheers good weekend
pc

Take the point (no pun intended) about FX, but I was really talking about indices, using SBs that have fixed spreads.
Regarding MiFID, next gen sounds like it will be the one of the few, or only, platforms that really complies with the spirit of the regs, which are supposed to prevent discrimination between clients.
btw, I know you think I'm just trying to be rude/awkward, but you did ask for feedback. If everyone came on here and posted nothing but compliments, we wouldn't get very far (although I'm certainly impressed by your golf handicap -- I managed to get down to 6 as a teenager, but I'd be lucky to get round in less than 90 now.

 

[PC at CMC Markets]

Hi Ross
I think you hit on an extremely important point regarding mifid and client fairness.
Under next gen technology all of our sb clients (and cfd clients in the future) all get quoted by a computer. the computer does not know the clients position before it quotes, it always quotes within the market price and it is not programmed to read a client on a price, it is a faceless automatic process. also if you look at yesterdays blogs even clients that deal on the phone get the same price executed to them on the phone that the system is quoting and no dealer can over ride the platform derived dealing price. Even if dealer read a client on the phone he could not put the bet through at a different price because we have taken the human element out of the process completely and dealers are salaried and instructed to only quote the system price. Our spread bet dealers job is to manage net risk. not to quote prices and execute trades. we are unique in this I believe.

This takes out the reading of clients, the client referral to a dealer and no requotes because every price we quote is good for a size. you will see what size per product within the product information. just click on the chevron on left side of ticket for info.
There are other innovations coming out soon that enhance this process to bigger ticket sizes.

In effect we have taken the human element out of the process and when you think of that our spreads do not look that wide if you think about the way we quote and execute a trade and dont forget prices are precision prices upto four decimal places.

I state it here again. I believe we have the best execution and pricing platform for spread betters (not the tighest head line spreads, there is a difference as explained above)

I am trying very hard to get these forum users to see beyond head line rates and I feel that typing this response I am making progress. lets see what responses I get.

yes you get on my nerves at times but I always think you are tough but fair and you and other bloggers are not here to be nice to me and I am not here to promote my company just respond to questions in a truthful manner. I put a lot of time and effort into this
but I think it is worth it.

golf is getting tougher to maintain at my age although I shot 73 around the east course at wentworth before christmas. maybe we can play one day if we are talking to each other ha ha

anyway thank you for raising the mifid point I think it is the most important point that has been raised on this thread since I started it.

cheers and have a good weekend.
Peter

Take the point (no pun intended) about FX, but I was really talking about indices, using SBs that have fixed spreads.
Regarding MiFID, next gen sounds like it will be the one of the few, or only, platforms that really complies with the spirit of the regs, which are supposed to prevent discrimination between clients.
btw, I know you think I'm just trying to be rude/awkward, but you did ask for feedback. If everyone came on here and posted nothing but compliments, we wouldn't get very far (although I'm certainly impressed by your golf handicap -- I managed to get down to 6 as a teenager, but I'd be lucky to get round in less than 90 now.

 

[Ross Spur]

Hi Ross
I think you hit on an extremely important point regarding mifid and client fairness.
Under next gen technology all of our sb clients (and cfd clients in the future) all get quoted by a computer. the computer does not know the clients position before it quotes, it always quotes within the market price and it is not programmed to read a client on a price, it is a faceless automatic process. also if you look at yesterdays blogs even clients that deal on the phone get the same price executed to them on the phone that the system is quoting and no dealer can over ride the platform derived dealing price. Even if dealer read a client on the phone he could not put the bet through at a different price because we have taken the human element out of the process completely and dealers are salaried and instructed to only quote the system price. Our spread bet dealers job is to manage net risk. not to quote prices and execute trades. we are unique in this I believe.

This takes out the reading of clients, the client referral to a dealer and no requotes because every price we quote is good for a size. you will see what size per product within the product information. just click on the chevron on left side of ticket for info.
There are other innovations coming out soon that enhance this process to bigger ticket sizes.

In effect we have taken the human element out of the process and when you think of that our spreads do not look that wide if you think about the way we quote and execute a trade and dont forget prices are precision prices upto four decimal places.

I state it here again. I believe we have the best execution and pricing platform for spread betters (not the tighest head line spreads, there is a difference as explained above)

I am trying very hard to get these forum users to see beyond head line rates and I feel that typing this response I am making progress. lets see what responses I get.

yes you get on my nerves at times but I always think you are tough but fair and you and other bloggers are not here to be nice to me and I am not here to promote my company just respond to questions in a truthful manner. I put a lot of time and effort into this
but I think it is worth it.

golf is getting tougher to maintain at my age although I shot 73 around the east course at wentworth before christmas. maybe we can play one day if we are talking to each other ha ha

anyway thank you for raising the mifid point I think it is the most important point that has been raised on this thread since I started it.

cheers and have a good weekend.
Peter

Bit too snowy for golf at the moment, but if you're able to shoot a 73 at Wentworth you'd beat me blindfolded with one hand tied behind your back!

 

[gle101]

Hi Ross
I think you hit on an extremely important point regarding mifid and client fairness.
Under next gen technology all of our sb clients (and cfd clients in the future) all get quoted by a computer. the computer does not know the clients position before it quotes, it always quotes within the market price and it is not programmed to read a client on a price, it is a faceless automatic process. also if you look at yesterdays blogs even clients that deal on the phone get the same price executed to them on the phone that the system is quoting and no dealer can over ride the platform derived dealing price. Even if dealer read a client on the phone he could not put the bet through at a different price because we have taken the human element out of the process completely and dealers are salaried and instructed to only quote the system price. Our spread bet dealers job is to manage net risk. not to quote prices and execute trades. we are unique in this I believe.

This takes out the reading of clients, the client referral to a dealer and no requotes because every price we quote is good for a size. you will see what size per product within the product information. just click on the chevron on left side of ticket for info.
There are other innovations coming out soon that enhance this process to bigger ticket sizes.

In effect we have taken the human element out of the process and when you think of that our spreads do not look that wide if you think about the way we quote and execute a trade and dont forget prices are precision prices upto four decimal places.

I state it here again. I believe we have the best execution and pricing platform for spread betters (not the tighest head line spreads, there is a difference as explained above)

I am trying very hard to get these forum users to see beyond head line rates and I feel that typing this response I am making progress. lets see what responses I get.

yes you get on my nerves at times but I always think you are tough but fair and you and other bloggers are not here to be nice to me and I am not here to promote my company just respond to questions in a truthful manner. I put a lot of time and effort into this
but I think it is worth it.

golf is getting tougher to maintain at my age although I shot 73 around the east course at wentworth before christmas. maybe we can play one day if we are talking to each other ha ha

anyway thank you for raising the mifid point I think it is the most important point that has been raised on this thread since I started it.

cheers and have a good weekend.
Peter

In the meantime I just throw in a few short questions. The Next-gen platform will not in any way flag a client no.. Whether the client is a scalper (according to the SB industry misinterpreted definition), news trader or other otherwise undesired client?
I understand you can close an account, but not flagging and in this way discriminate a client no. based on his/hers trading style?

 

[barjon]

Bit too snowy for golf at the moment, but if you're able to shoot a 73 at Wentworth you'd beat me blindfolded with one hand tied behind your back!

not down 'ere it's not - i got soaked today though and played like a prune to boot.

jon

 

[pster]

Hello Peter,
Why when I go long overnight on xagusd (CFD), do I lose $.015 per ounce every night? That is half of the spread EVERY NIGHT. I asked about this in your online chat, and the rep told me that sometimes it goes in my favor and sometimes not. But that is not the case. Every single rollover goes against me. Why would your rep say something that isn't true? Should I start looking for a new broker? I'm new to all of this and not happy about it.

 

[candeloro]

I like what I see looking at your new platform.
As a swingtrader in stocks, what I do not like is your lack in numer of stocks you offer compared to IG Index.
30 companys offered in Germany as mentioned on your webpage? You meant 300, right?
As stocks are something SB companies could get an edge I always ask myself why every SB company is giving away the field to IG Index?

 

[geewcee]

candeloro, I asked this earlier on and I'm sure Peter said that CMC are rolling out a huge new range of stocks in the first quarter of 2011. So I guess keep an eye out for them! If they manage to get the same varied range as IG I would be tempted to swap accounts.

 

[PC at CMC Markets]

Good morning Geewee.

Yes we are definitely rolling out more products and there is a process to do this which entails making sure that every product we offer we offer the same service.
eg No re quotes, precision pricing, no dealer referral, no fill or kill, instant execution and of course automated execution. So behind the scenes we have to do a serious amount of testing, some system upgrades and that is why we could not release all products on day one. we begin the roll out of new products in next couple of weeks. not sure exactly how many there will be but there will be most of what you need to trade and once we get through this next stage of releases we will be able to add almost any products and trade the same way.
On another note we are also going to add some products that nobody else offers. we already offer rolling cash commodities ( by the way they accounted for about 25 percent of the turnover on next gen last month, the biggest single asset class, although we expect this to change once we offer more shares etc) but we are also looking at some new index products but you will have to wait a few weeks more.

Next Gen is not about head line rates it is about execution, pricing, automated execution and no dealer referral, no fill or kill but 100 percent execution every time automatically. I know we lack products now but it is only a matter of time before we hit the full product suite. getting exciting now guys.

cheers peter

candeloro, I asked this earlier on and I'm sure Peter said that CMC are rolling out a huge new range of stocks in the first quarter of 2011. So I guess keep an eye out for them! If they manage to get the same varied range as IG I would be tempted to swap accounts.

 

[PC at CMC Markets]

Hi Candeloro
Thanks for your blog see my reply to geewee on page 37 should answer your questions not long to wait now.
cheers peter

I like what I see looking at your new platform.
As a swingtrader in stocks, what I do not like is your lack in numer of stocks you offer compared to IG Index.
30 companys offered in Germany as mentioned on your webpage? You meant 300, right?
As stocks are something SB companies could get an edge I always ask myself why every SB company is giving away the field to IG Index?

 

[PC at CMC Markets]

Hi Candeloro
By the way thanks for your positive comments regarding next gen. appreciated. I think next gen is awesome but then I am bias.

Just imagine though all the financial asset classes, over 4000 products with automated execution, on precision pricing, no re quotes and no dealer referral and best spreads in the market, now that would be a great spread bet service. in fact the next generation of spread betting. Its on its way guys just hang in there, you heard it here first.

cheers Peter

I like what I see looking at your new platform.
As a swingtrader in stocks, what I do not like is your lack in numer of stocks you offer compared to IG Index.
30 companys offered in Germany as mentioned on your webpage? You meant 300, right?
As stocks are something SB companies could get an edge I always ask myself why every SB company is giving away the field to IG Index?

 

[PC at CMC Markets]

Good morning pster

Thanks for your question. If you are on the cfd platform then this is the daily roll over charge. so if you are long gold you will be short dollars and in effect you pay interest on the dollar amount to carry the trade forward. This is normal roll over charge and is applicable with all spread bet companies, not just on gold but any position whereby you are a buyer of the under line product. eg if you are long shares you are short sterling, if you are long index you are short sterling, or us dollars if you are trading Dow etc.

If you were dealing on the next gen platform you would not have daily roll over. the bet is kept at the original price and you pay a daily finance charge which is highlighted in your back office position.

hope that helps
cheers peter

Hello Peter,
Why when I go long overnight on xagusd (CFD), do I lose $.015 per ounce every night? That is half of the spread EVERY NIGHT. I asked about this in your online chat, and the rep told me that sometimes it goes in my favor and sometimes not. But that is not the case. Every single rollover goes against me. Why would your rep say something that isn't true? Should I start looking for a new broker? I'm new to all of this and not happy about it.

 

[PC at CMC Markets]

Good morning gle101
Next gen. platform has been built as a flow platform just dealing with deals as they hit the platform. It is not designed and does not recognise individual traders and their trading patterns. Prices are generated by algorithms, bets are executed by algorithms. it is an automated process and there is no part of the technology that can and does single out individuals. It is a faceless process and as I am been trying to get across to you guys our pricing and execution I believe to be the best in the market for the above reason.
There will never be any dealer referrals of any description. Not just on our spread bet platform but across our next gen cfd platform.
in effect we have designed the platform to deal with high frequency trades and to do that you have to take out the human element. it doesnt matter if you are high frequency, low frequency, scalpers the platform is designed to quote and execute any type of trade across any type of market.

If you think of it, this is not rocket science. If I want to execute a forex trade on line with one of my counter party banks I can click and trade any time. sure prices widen but that is normal during volatile times. All we have done is replicated what we get from our banks and given it our clients because long term I believe that head line rates, dealer referrals, fill or kill will be a thing of the past. it is here on our next gen spread bet platform. you guys have just got to get used to an improved way of executing your spread bets, which is only a matter of time. I believe to survive in the spread bet industry in the future all spread bet firms will have to offer what we offer.
namely
Precision pricing
Automated execution,
No dealer referrals
no re quotes
etc.

I keep banging on about this next gen platform. I know it is short of products but once you get all of those with the execution I have described above and once the spreads come in a bit more then that will be the next generation spread bet service, not just for CMC Markets but for spread bet clients and the industry as a whole.

cheers Peter

In the meantime I just throw in a few short questions. The Next-gen platform will not in any way flag a client no.. Whether the client is a scalper (according to the SB industry misinterpreted definition), news trader or other otherwise undesired client?
I understand you can close an account, but not flagging and in this way discriminate a client no. based on his/hers trading style?

 

[PC at CMC Markets]

lets put it to the test. lets play and I will give you a shot per hole around east course at wentworth. I warn you I could shoot 73 or 93 so it is a 50/50 bet and we will play for a beer.

cheers peter

Bit too snowy for golf at the moment, but if you're able to shoot a 73 at Wentworth you'd beat me blindfolded with one hand tied behind your back!

 

[Ross Spur]

lets put it to the test. lets play and I will give you a shot per hole around east course at wentworth. I warn you I could shoot 73 or 93 so it is a 50/50 bet and we will play for a beer.

cheers peter

Problem is that the way I've been playing recently I could easily shoot a 120.

On the subject of platform testing, why not try what some other SBs seem to do and let the clients act as software development engineers? Seriously, lots of bugs probably only show in service, so I think this is fair enough, as long as there's some sort of 'free money' account opening offer. Most people probably blow the hundred quid, or whatever, anyway, so it won't cost CMC much and must be good way of acquiring clients and testing next gen?

 

[PC at CMC Markets]

Hi Ross
Have done that to a certain extent and you are right it works and there is talk of doing some more of that but I want to get the new products out there first so clients can hammer it a bit. who knows might even get you to trade with our money. would be interested to hear your feed back on the platform but lets get other products loaded first.

okay re golf if you get a chance to play and fancy a game let me know. my golf is erratic a bit at the moment never know if I am going to shot good score or not, guess its a bit like trading.

cheers pc

Problem is that the way I've been playing recently I could easily shoot a 120.

On the subject of platform testing, why not try what some other SBs seem to do and let the clients act as software development engineers? Seriously, lots of bugs probably only show in service, so I think this is fair enough, as long as there's some sort of 'free money' account opening offer. Most people probably blow the hundred quid, or whatever, anyway, so it won't cost CMC much and must be good way of acquiring clients and testing next gen?

 

[gle101]

Good morning gle101
Next gen. platform has been built as a flow platform just dealing with deals as they hit the platform. It is not designed and does not recognise individual traders and their trading patterns. Prices are generated by algorithms, bets are executed by algorithms. it is an automated process and there is no part of the technology that can and does single out individuals. It is a faceless process and as I am been trying to get across to you guys our pricing and execution I believe to be the best in the market for the above reason.
There will never be any dealer referrals of any description. Not just on our spread bet platform but across our next gen cfd platform.
in effect we have designed the platform to deal with high frequency trades and to do that you have to take out the human element. it doesnt matter if you are high frequency, low frequency, scalpers the platform is designed to quote and execute any type of trade across any type of market.

If you think of it, this is not rocket science. If I want to execute a forex trade on line with one of my counter party banks I can click and trade any time. sure prices widen but that is normal during volatile times. All we have done is replicated what we get from our banks and given it our clients because long term I believe that head line rates, dealer referrals, fill or kill will be a thing of the past. it is here on our next gen spread bet platform. you guys have just got to get used to an improved way of executing your spread bets, which is only a matter of time. I believe to survive in the spread bet industry in the future all spread bet firms will have to offer what we offer.
namely
Precision pricing
Automated execution,
No dealer referrals
no re quotes
etc.

I keep banging on about this next gen platform. I know it is short of products but once you get all of those with the execution I have described above and once the spreads come in a bit more then that will be the next generation spread bet service, not just for CMC Markets but for spread bet clients and the industry as a whole.

cheers Peter

Yes I agree, we are looking at a bright future for SB. According to you, CMC next-gen offers complete MiFID compliance as I see it. Spreads, just have to come in line then we've got everything.
Sounds really good on paper. But how do you deal with fixed spread prior to news releases? I haven't noticed variable spreads yet. How do you deal with network latency? Could there be slippage without a gap in the market? Is fractions of a point such a good deal after all? Do you have complete transparency in how you derive your prices (included fractions)?

 

[uchiki]

Hi Peter,

I'm just starting to look at sb (previously using interactivebrokers and a separate ISA provider for trading stocks).
I liked the sound of the daily finance charge being calculated on net borrowings. I've opened a demo account with CMC (along with a few other sb's - you're on my shortlist so far), and I thought I'd double check my understanding with your Live Help.

Starting out, I'd be happy if I could use your platform as if I was buying the stocks outright ie no margin, so seeing your comments was a plus in CMC's favour. The key advantage I'm looking for is tax free trading.

My question
(summarising from your blog....) overnight financing charges are only applied on net borrowings ie if you held a position with a notional value of 20k GBP with 2k margin, but also with a further 18k GBP cash in the account, then no overnight financing charge would be applied. Could you confirm I've understood this correctly?

Disappointingly, the answer was
For spread betting you would be charged overnight financing on the unfunded portion of the trade. So in your example above you would be charged interest on the 18k GBP of the trade that you have not provided margin for.
Depending on the type of instrument you are trading you will be charged different rates

If my understanding was correct, would this also apply to stocks denominated in non-GBP currency if my cash balance was in GBP?

Could you confirm.
Thanks,


My trades would be swing trades with stops and targets. I'm happy with your order entry and as long as the spreads are consistent, they'll likely be OK.
I've had trouble drawing on your charts, but I'd only use them to fill gaps in the data feeds I have for Ensign. eg Moving cursor when trying to draw a trendline seems to expand chart, rather than draw trendline on a chart that's staying still.
I like the fact that you provide spread charts.
Be nice if you provided a few other drawing tools like pitchforks.
I really need to see what additional stocks you provide when you release them.

Hi kalott

Thanks for comments back office was big area of improvement for us and makes it easier for clients to see their positions and adjust trades.
Also bets are kept open at their original execution price so clients can see their entry levels. There is daily finance bet charge instead of rollover. Nice thing also is that all balances are netted off so you only pay finance on net borrowings. I believe we are only spread company that does this.

Yes cfd spreads will be the better spreads this is to encourage clients to use next gen.

Thanks for your comments
Peter

 

[Benny Dorm]

Hello Peter,

I was a client of CMC's for some years but got fed up being re-quoted and, it appeared, stop-hunted to death.

As I am way past my CGT exemption and also that of my Mrs I was looking at SB's again. Could you please explain to me how CMC make their money? I am not bothered particularly about interest on deposits etc but more on how CMC make money from their clients. Obviously, when a client loses money it goes to you, the bookie. However, you said in one of your replies that CMC wanted clients to make money: so how does it work exactly?

Can we be clear that your company will not stop-hunt?

Thanks.

PS I play off 2 on a links course - not some cissy parkland course protected from the elements by trees! If you want a sound thrashing then I would be happy to play the West anytime! (Cough!) :cheesy:

 

[pster]

Good morning pster

Thanks for your question. If you are on the cfd platform then this is the daily roll over charge. so if you are long gold you will be short dollars and in effect you pay interest on the dollar amount to carry the trade forward. This is normal roll over charge and is applicable with all spread bet companies, not just on gold but any position whereby you are a buyer of the under line product. eg if you are long shares you are short sterling, if you are long index you are short sterling, or us dollars if you are trading Dow etc.

If you were dealing on the next gen platform you would not have daily roll over. the bet is kept at the original price and you pay a daily finance charge which is highlighted in your back office position.

hope that helps
cheers peter

So, I read the section of your pdf. And you seem to charge irrespective of whether someone is long or short. Is that correct?

Here is what oanda says in their explanation of rollover:
When trading in a margin account, you receive interest on your long positions, while paying interest on short positions

I'm new to all of this, so bear with me. But it seems that you are charging more than oanda? Is that correct?