Direct Access help???

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mcharlton

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I have just opened an IB account and was under the impression that by doing this I would have direct access to the FTSe and therfore be able to beat/use the spread...

ie. Bid 100 - Sell 110 I would be able to put an order on for say 101 and then sell at 109... (simplified i know...)

If I try and do this a message appears saying 'does not conform to min price variation' what does this mean???

Thanks in advance...
 
Are you talking about the ftse100 index futures or individual shares? The ftse100 futures are probably too liquid to have a spread more than 1 pt and UK shares would be a no-go for this strategy as you won't cover expenses (commission and stamp duty).

What type of order are you trying to use? You'll have to use Limit's if you want to buy the bid/sell the ask.
 
Individual shares... only using this to get a bit of advantage on price not neccasarilly to make money out of the spread... I am using limits...
 
Ok. I don't trade UK shares so I'm afraid I'll have to leave this one for someone that does!
 
sidinuk said:
Ok. I don't trade UK shares so I'm afraid I'll have to leave this one for someone that does!
Click to expand...
mcharlton

I am guessing that the price you are putting in is not a multiple of the tick size - some uk stocks trade in pennies, some in half pennies etc... Probably worth checking that out.

Cheers

Stew
 
mcharlton said:
Thanks for your reply but how do I find out the tick size for a share...?

ta.
Click to expand...

The rules for the UK market are a bit crap compared to the rest of Europe, generally speaking the tick size is derived from the last trade price but this is only reviewed periodically by the LSE, whereas across Europe the tick size is implemented straight away. The info is available from the LSE but I think its only in their member feed.

Easiest way to do it is to look at the order book (assuming you have level II) and look at the last trade prices - if you spot one in 1/4 then you know the tick size is quarters etc etc. It may be on a web site but haven't really looked for it.

Stew
 
Ok will look into it a bit more...

The only thing that confuses me is that when watching the last price come through there are orders being placed with prices that I cannot seam to get..

ie... share trading at 12.75 - 13.00 I put in price of 12.76 and it is not allowed. then the next trade comes up at 12.76... How are these going through when mine are not...

very irratating!!

but I will look into it more... thanks for your help...
 
mcharlton said:
Ok will look into it a bit more...

The only thing that confuses me is that when watching the last price come through there are orders being placed with prices that I cannot seam to get..

ie... share trading at 12.75 - 13.00 I put in price of 12.76 and it is not allowed. then the next trade comes up at 12.76... How are these going through when mine are not...

very irratating!!

but I will look into it more... thanks for your help...
Click to expand...

You should be able to get any price that you see going through...even if its an upstairs trade. Unless IB have the wrong tick size on their end which is possible. When you see the price go through on time and sales is it shown as an A flagged trade or do you not see the trade flags ?

Stew
 
Can't see the flag trades... maybe the best thing to do is contact IB and see what they say about it...
 
mcharlton said:
Symbol: ISYS

How do you look up the tick size??

Cheers.
Click to expand...

mcharlton

Invensys has a 0.25p spread or tick as others have put it. If you are using direct access then you can only enter orders in increments of 0.25p.

IE: ISYS is trading at 17.25-17.5 and you wish to buy, you can choose to either pay the 17.5 or place a limit buy in the book at 17.25 or lower in increments of 0.25p's. Of course you will go to the back of the queue if others have orders in front of you at the same price.

The trades you see going through at 17.26 etc are "O" trades. These are orders put through a market maker behind the book. EG if you were trading via a high street broker. But a trade of 17.26 when the bid is 17.25 will usually be a sell not a buy.
 
ie. Bid 100 - Sell 110 I would be able to put an order on for say 101 and then sell at 109... (simplified i know...)
Click to expand...

mcharlton If I understand you right I think you have the bid/ask prices the wrong way around. 100/110 means you can buy at 110 and sell at 100. You cant make money trading against the spread which is what I think you are trying to do?
 
oatman said:
Sounds like he wants to get inside :cheesy:
Click to expand...

Yeah sorry I fired off the reply before I thought about it enough. Didn't think anyone would do that for such a big market with so many players. I'll shut up now…
 
If you are placing orders directly on the order book, you buy at the 'sell price' (bid)and sell at the 'buy price' (ask). You do not pay stamp duty for CFDs. And you can only put orders on the book for specific prices.. but if you trade through a broker they can often get an improvement in the price so that shows as a different fraction.. e.g. 120.99 when the book says 121p.
You cannot rely on trades reports being buys or sells.. I have frequently seen my trades reported incorrectly
 
Bid Ask

Racer said:
If you are placing orders directly on the order book, you buy at the 'sell price' (bid)and sell at the 'buy price' (ask).
You cannot rely on trades reports being buys or sells.. I have frequently seen my trades reported incorrectly
Click to expand...
Racer,
Can you please explain this in more detail.
Why don't they just call a spade a spade!
And who's prespective are we looking from, the market maker's or the trader's
Thanks
Badd Boi
 
Do you mean the trade reporting or the order book sell at the buy, buy at the sell prices?

If you trade CFDs you are acting like a market maker, so you are theoretically selling to the 'ordinary trader' who is buying the shares

Trades are often reported incorrectly because of the timing. For small companies, trades several multiples of NMS can be delayed several hours to days, by which time the price can have moved significantly one way or the other and then the trade is reported incorrectly.
 
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