Best Thread CMC Markets owner answers your questions

[Ross Spur]

Good spread that on the Euro for SB.

Not as good as 1pt.

 

[Black Swan]

Not as good as 1pt.

or zero <snigger>

 

[PC at CMC Markets]

Re: Question for PC - currency bets

Hi Hoodoo man
thanks for post and I had to speak to compliance and others about your request as lot sof questions here.

I am getting compliance to get out if we are able to accept spread betters from Malta. I think we can.

have no view on why people trade with us for tax reasons or to make money. a trade is a trade and we have to manage the risk so makes no difference to us. Of course we have hedging policy. We handle millions of trades per month across spread bet, cfds and forex and commodities. we have to hedge a large portion of this. If you traded with us in large size we would hedge this back to back. Your size trades would almost be hedged back to back if there was no natural offset. Although we do have a lot of forex business so very likely that your trades would be part hedged but depends on our exposure at the time. we manage our risk on a flow basis.

spreads are important but so is consistency. our next gen prices are derived electronically and executed electronically without dealer intervention and there are no requotes. spreads and quote sizes you can find on our web site for all currency pairs.

because of your level of business we would probably classify you as professional client
so funds would not be segregated but we would need to check your details through compliance. we have accepted other forms of collateral in the past for trading but again it depends on the details.

Let me know if you want to take it further and I will get some one to call you. you can email privately on this forum.

regards Peter

Hello Peter - I wonder if you would be kind enough to shed some light on my following enquiry.

Firstly, are you able to accept individual accounts from another EU member state? If I were resident in Malta, could I have a spreadbetting account with you.

Secondly, what is your view on people using your firm not for tax advantages of SB, but rather as an additional source of liquidity? I trust that you will have a hedging policy on a per instrument and per asset class basis, and only hedge the aggregate exposure over this limit.

It is difficult to get good pricing in retail FX. I have a trading associate who trades through some retail FX brokers, but not spreadbetting.

Oanda will take a 10 million Euro order in the EUR/USD in one click, at a price, on spreads of 0.9-1.2 "pips". My associate is able to fill 10 million at oanda, 5 million inside of 1.5p at another broker, and another few million in the CME Euro FX futures.

Currently a 10 million order in the EUR/USD is worth in the region of £600 per point.

For a client wishing to open an account with you, would you take that size electronically on a single price, with a spread no wider than 2 pips? How much of this exposure would you ordinarily need to hedge immediately?

The client would be consistently profitable, so would your spread and book make this profitable for you also? I'll emphasise that it is not predatory pricing/sniping/toxic flow, and trades are held for a minimum of 5 minutes.

The concern would be that if you hedged the full size immediately each time, this would upset the liquidity providers as they will be getting hit / lifted from other venues and this is not tolerated. If however you have enough two way flow that most of £600 per point in the EUR/USD would remain on your book, like Oanda are able to do, then it would be attractive to open an account for this extra liquidity.
Would it be the case that you would be happy to accept positions larger than £600pp at a later date? (ultimately we are wanting prices in 30-35mio total across all venues by the end of next year, but cannot get institutional type pricing as we aren't set up back office wise etc.)

Finally, regarding deposits. Obviously £600pp needs to be comfortably margined. Would you accept a standby letter of credit, bank guarantee, or treasuries deposited to you instead of cash? If cash is required, may I ask if it is segregated? I expect that the account would be an eligible counterparty, rather than retail, or whatever the new legal term is under MiFID.

 

[tar]

Re: Question for PC - currency bets

The concern would be that if you hedged the full size immediately each time, this would upset the liquidity providers as they will be getting hit / lifted from other venues and this is not tolerated. If however you have enough two way flow that most of £600 per point in the EUR/USD would remain on your book, like Oanda are able to do, then it would be attractive to open an account for this extra liquidity.
Would it be the case that you would be happy to accept positions larger than £600pp at a later date? (ultimately we are wanting prices in 30-35mio total across all venues by the end of next year, but cannot get institutional type pricing as we aren't set up back office wise etc.)

I just checked CMC next gen platform the max quantity for EUR/USD is 200pp anyway Liquidity providers ( banks ) dont care about 10 million $ order size in the euro ! and simply if they r getting hit repeatedly with large orders ( not 10 M $ ) they will move their prices and this is how prices move !
check this post by GJ :

As a rough guide, right now realistically looking at what's going through today across a broad spread of interbank ecns, I could probably if needed sell a hundred million Euros in eur/usd with maybe, oh, let's say max 2 points of slippage from the best bid. It would probably move the price for a few seconds, but it's hardly gonna cause widespread market carnage

And that, in retail / spreadbet parlance would be approximately a £6k per point trade.

But equally if I did this, then waited a few seconds, then did it again, then waited, then did it again etc etc, eventually the trading would propbably start to have an impact. Two main reasons;

1) The market participants on the other side would be getting steadily longer of Euros. And at some point, they would in all probability reach saturation point if I was hitting them quicker than they could offload those euros elsewhere.

2) Pattern recognition algorithms would likely detect that someone was time-slicing a larger sell order, and start to back off the bid a little bit.

Of course, if you stick a few hundred euros into it and it DOESN'T budge, that's a fair indication that there's some pretty decent underlying demand in the market and it's probably gonna go higher once you stop sitting on it....

Basic market making supply / demand stuff this.

Hope this helps.

GJ

 

[PC at CMC Markets]

Re: Question for PC - currency bets

Hi Tar,
Just cannot keep away can you. I know you love this site.
You can hit our price as many times as you like at 200 pp.
WE are building some new technology that will allow you to hit us for up to 100 million on one price based on our liquidity, the market liquidity. that technology is coming in next month or so.
tks pc

I just checked CMC next gen platform the max quantity for EUR/USD is 200pp anyway Liquidity providers ( banks ) dont care about 10 million $ order size in the euro ! and simply if they r getting hit repeatedly with large orders ( not 10 M $ ) they will move their prices and this is how prices move !
check this post by GJ :

 

[tar]

Re: Question for PC - currency bets

Hi Tar,
Just cannot keep away can you. I know you love this site.

Its all in your imagination Peter

Regards

 

[hoodoo man]

Re: Question for PC - currency bets

Hi Peter

Many thanks for your prompt and comprehensive reply. I have now had time today to read the rest of the thread, and note your repeated emphasis on providing a high quality service with the ultimate aim of competing with the ECNs, exchanges, and other venues. I would certainly be interested in doing business with a firm with this ethos. I am pleased that you are open to taking other forms of collateral etc.

The next step for me will be to get a demo login and try out your new platform. I have written some custom order entry software to input deals simultaneously across providers, and I shall need to update this to work with your platform also. If this goes well, I would expect to follow up by the end of the year. As mentioned in my prior post, we expect to be at 30-35 mio per trade by the end of next year, and currently have good pricing in 20. I'd like to speak to your firm in Q4 after trying the demo - if there are any features I think would be useful I'll mention them here as I understand you are still improving and updating the platform.

I don't want to tie up your team in pre-sales until I am ready to move forward, so I shall message you here for the relevant contact details later this year. Many thanks for making yourself available and for the quality of your responses. I shall pass your answers on to my trading associate also, who will likely open with you first - however I think we shall both open accounts in due course.

Hi Hoodoo man
thanks for post and I had to speak to compliance and others about your request as lot sof questions here.

I am getting compliance to get out if we are able to accept spread betters from Malta. I think we can.

have no view on why people trade with us for tax reasons or to make money. a trade is a trade and we have to manage the risk so makes no difference to us. Of course we have hedging policy. We handle millions of trades per month across spread bet, cfds and forex and commodities. we have to hedge a large portion of this. If you traded with us in large size we would hedge this back to back. Your size trades would almost be hedged back to back if there was no natural offset. Although we do have a lot of forex business so very likely that your trades would be part hedged but depends on our exposure at the time. we manage our risk on a flow basis.

spreads are important but so is consistency. our next gen prices are derived electronically and executed electronically without dealer intervention and there are no requotes. spreads and quote sizes you can find on our web site for all currency pairs.

because of your level of business we would probably classify you as professional client
so funds would not be segregated but we would need to check your details through compliance. we have accepted other forms of collateral in the past for trading but again it depends on the details.

Let me know if you want to take it further and I will get some one to call you. you can email privately on this forum.

regards Peter

 

[6am]

Re: Question for PC - currency bets

I have written some custom order entry software to input deals simultaneously across providers, and I shall need to update this to work with your platform also.

I maybe wrong but as far as I know according to T&C you are not allowed to do that. Here is a link http://www.cmcmarkets.co.uk/sites/default/files/spreadbet_terms_of_business.pdf

10.2 Intellectual Property and Improper Use of the Platform
10.2.3 You must not:
c) link to the Platform except with our express prior written consent;
d) modify, translate, reverse engineer, decompile, disassemble (except and solely to the extent an Applicable Law expressly and specifically prohibits such restrictions), or create derivative works based on the Platform or any of its contents;
e) modify the operation of the Platform;
h) use data mining, robots or similar data gathering and extraction tools on the Platform;

 

[Truth Seeker]

Why don't you have 1 click dealing anymore, trying to keep the experienced away?

 

[kalott]

I think the liquidity of demo dollars are good

 

[tar]

hoodoo man

Are you "traderhf" by any chance ?!

http://www.elitetrader.com/vb/showthread.php?s=&threadid=189472

 

[lancenicolase]

it's been a few months now but the growth is still 300%... LOL... well done.
If I could I'd like to summarise this thread:
1. CMC are growing 300% but nobody believes it...
2. CMC have the best trading platform but everybody knows that IG have a much better one.
3. Customer service at CMC is... they've gone AWOL

Anything else I'm missing there?

 

[Ross Spur]

it's been a few months now but the growth is still 300%... LOL... well done.
If I could I'd like to summarise this thread:
1. CMC are growing 300% but nobody believes it...
2. CMC have the best trading platform but everybody knows that IG have a much better one.
3. Customer service at CMC is... they've gone AWOL

Anything else I'm missing there?

PC is Elvis?

 

[Black Swan]

CMC have the best trading platform but everybody knows that IG have a much better one. Anything else I'm missing there?

Nonsense, and I'm coming at this from an impartial standpoint...

IG's platform is a relic and they optimise it to 'skim'..FACT. You think you're getting filled at 2 pips on the Euro you're not, it's closer to 4+. OK for FX swing/position traders such as myself but it's outrageous..

I'm still very concerned at the money IG lost in their overseas folly, it'll restrict the cash they can dedicate towards R&D for years to come, they're very stale at the moment...

CMC's platform is light years ahead, it's superb..

As for CMC's growth you could suggest "turnover is vanity profit is reality" but inside comment from the wider industry suggests CMC's push into Europe has been very, very successful, particularly in terms of new customers and the take up of CFDs.

One more thing, in PC's position he cannot make false claims and or promote his company outside of certain guidelines, therefore if he states a figure of "300%" it has to be correct, his compliance team would not allow him to make false claims..

 

[Steph007ess]

As a soaked-behind-the-ears newbie I'd like to know if a platform from an sb provider should be enough. I'm using CMC now and the platform is easy to use and they seem to be tweaking it and adding bits every so often. The only thing is there is no volume indicator which (for me) would work well with candlesticks. Is this typical of most sb platforms and do I therefore have to get data from elsewhere such as level 1 or 2?

 

[tar]

Nonsense, and I'm coming at this from an impartial standpoint...

IG's platform is a relic and they optimise it to 'skim'..FACT. You think you're getting filled at 2 pips on the Euro you're not, it's closer to 4+. OK for FX swing/position traders such as myself but it's outrageous..

I'm still very concerned at the money IG lost in their overseas folly, it'll restrict the cash they can dedicate towards R&D for years to come, they're very stale at the moment...

CMC's platform is light years ahead, it's superb..

As for CMC's growth you could suggest "turnover is vanity profit is reality" but inside comment from the wider industry suggests CMC's push into Europe has been very, very successful, particularly in terms of new customers and the take up of CFDs.

One more thing, in PC's position he cannot make false claims and or promote his company outside of certain guidelines, therefore if he states a figure of "300%" it has to be correct, his compliance team would not allow him to make false claims..

with all due respect you are way off ,

first : CMC platform is light years behind many platforms out there like IG's and Fxcm's , it lacks many basic features .For example : no Guaranteed stops , no two way ticket ( sell/buy ) you have to decide buy or sell first , which takes you more than 3 steps to take a trade ( multiple click dealing ! , no one click dealing , no 2 clicks dealing ) ( in another words : in fast moving markets u will miss tens of points before you take action ) , very slow platform , charting 1/5 compared to better charts out there , markets : fewer , spreads : wider , on news u will see cable more than 20 pips , plus other problems with the platform , not user friendly , un customizable .... etc

second : "IG's platform is a relic and they optimise it to 'skim'..FACT "
whats the proof , i used IG , infact the the spread is less than 2 pips sometimes they give me positive slippage .

Third : 300 % increase , doesnt mean anything if u hit rock bottom , lets say they usually have 100 new clients , now they have 300 new clients , that is understandable after launching the new platform and after all this marketing , infact 300% is really a disappointing number especially after all these changes in CMC . show me the revenue .

 

[Ross Spur]

Nonsense, and I'm coming at this from an impartial standpoint...

IG's platform is a relic and they optimise it to 'skim'..FACT. You think you're getting filled at 2 pips on the Euro you're not, it's closer to 4+. OK for FX swing/position traders such as myself but it's outrageous..

I'm still very concerned at the money IG lost in their overseas folly, it'll restrict the cash they can dedicate towards R&D for years to come, they're very stale at the moment...

CMC's platform is light years ahead, it's superb..

As for CMC's growth you could suggest "turnover is vanity profit is reality" but inside comment from the wider industry suggests CMC's push into Europe has been very, very successful, particularly in terms of new customers and the take up of CFDs.

One more thing, in PC's position he cannot make false claims and or promote his company outside of certain guidelines, therefore if he states a figure of "300%" it has to be correct, his compliance team would not allow him to make false claims..

Although I'm not a great fan of Next Gen, I agree with some of what you say about IG's platform. In my experience, no SB has prices that flit about so much, so just clicking to buy or sell does seem to make the effective spread much wider. The charts are better than most, but I never managed to get the Deal Thru bit working reliably.

On the other hand, I don't see how CMC is light years ahead of anyone. As Tar says, there are plenty of issues and annoyances with charting, slowness and trade entry (although you can trail stops). GFT DealBook and FXCM both have far better platforms, as is SLM's MT4 (despite its oddities).

The context of that 300% figure was so vague that I don't think it really meant much.

 

[Ross Spur]

As a soaked-behind-the-ears newbie I'd like to know if a platform from an sb provider should be enough. I'm using CMC now and the platform is easy to use and they seem to be tweaking it and adding bits every so often. The only thing is there is no volume indicator which (for me) would work well with candlesticks. Is this typical of most sb platforms and do I therefore have to get data from elsewhere such as level 1 or 2?

It's typical, but the 'volume' often quoted isn't really volume, anyway.

 

[Black Swan]

with all due respect you are way off ,

first : CMC platform is light years behind many platforms out there like IG's and Fxcm's , it lacks many basic features . no trailing stops ,no Guaranteed stops , no two way ticket ( sell/buy ) you have to decide buy or sell first , which takes you more than 3 steps to take a trade ( multiple click dealing ! , no one click dealing , no 2 clicks dealing ) ( in another words : in fast moving markets u will miss tens of points before you take action ) , very slow platform , charting 1/5 compared to better charts out there , markets : fewer , spreads : wider , on news u will see cable more than 20 pips , plus other problems with the platform , not user friendly , un customizable .... etc

second : "IG's platform is a relic and they optimise it to 'skim'..FACT "
whats the proof , i used IG , infact the the spread is less than 2 pips sometimes they give me positive slippage .

Third : 300 % increase , doesnt mean anything if u hit rock bottom , lets say they usually have 100 new clients , now they have 300 new clients , that is understandable after launching the new platform and after all this marketing , infact 300% is really a disappointing number especially after all these changes in CMC . show me the revenue .

You're a dyed in the wool IG 'fanboy', ergo you're opinion is coloured..I stand by all I've stated. IG's platform is a messy relic, they're cash poor atm so can they re-invest in improvements? We'll see. As for their fills they were pathetic in relation to the FX firms I use, 2 pips behind on the Euro 90% of the time.

CMC have taken a huge brave step in pushing the platform envelope/customer experience, imo they're onto a winner and I wish them well.

Your comment "show me the revenue" indicates so much in relation to the twisted logic and damaged mindset of the main baiters on this thread, CMC and or Peter have nothing to prove or justify to you personally, their stats and expansion plans appear on track therefore their strategy has been executed well.

 

[tar]

You're a dyed in the wool IG 'fanboy', ergo you're opinion is coloured..I stand by all I've stated. IG's platform is a messy relic, they're cash poor atm so can they re-invest in improvements? We'll see. As for their fills they were pathetic in relation to the FX firms I use, 2 pips behind on the Euro 90% of the time.

CMC have taken a huge brave step in pushing the platform envelope/customer experience, imo they're onto a winner and I wish them well.

Your comment "show me the revenue" indicates so much in relation to the twisted logic and damaged mindset of the main baiters on this thread, CMC and or Peter have nothing to prove or justify to you personally, their stats and expansion plans appear on track therefore their strategy has been executed well.

who is a dyed in the wool fanboy ?! me or you ? lol ! i dont care about IG f*** IG why i will care ,IG is only one of many brokers i use including Oanda and Fxcm , dont take it personal this is trading , we only gave CMC our feedback and i wish they improve ...
As for IG fills , they r one of the best out there and the fastest . and there is no such thing as 2 pips differential or whatever u call it ...