FINANCIAL SPREADS Getting Price

Can anyone explain to me how it would affect a sb company whether their clients lost or not? I thought they made their money from their exorbitant spreads... Thats what they say, but we know different. They are nothing more than bookmakers pure and simple. Someone starts to win consistantly anf it's goodbye.

Personally I take this as a compliment.

JonnyT
 
Sorry JonnyT - still don't understand how someones winning or losing would affect them....
 
When will you guys stop betting and start trading.Perhaps its when you're that good the spread betting companies dont want your custom any more.

Please dont take offence but just take stock of all the pro's and cons.All i ever hear from spread betters is complaints about their sb companies.Change the way you trade.Do you ever hear NL2 guys compaining about their trading platform or broker?
 
Last edited:
Very interesting thread.

I've traded the CMC SP500 Cash bet for about a year and then thought of moving to the Emini but couldn't see any real advantages.

Firstly I make about 4 trades a day and hold them for about 1/2 hour to 2 hours. Now the Emini has a spread of .25 so you need a movement of .5 to make a profit. The CMC spread is .5 so you need a movement of about .5 to break even. Now if your scalping you still need a .5 movement since the spread is .25 plus commision. I'm confident in my trading descions so like to hang on for a 2.0 move before exiting. If you scalping I see your point, but for active traders who hold positions for just a but longer then SB's are quite adiquate IMO.

As for bias, I've noticed D4F qoute to straddle the actual price fairly nicely. The only time I see a bias is where the is a chage in the 5min trend. At these times I see D4F quote lagging as they are unsure weather it's noise or a trend reversal e.g the trend is downwards, D4F quote 900-900.5 but the actual has started rising 901-901.25 I'd say there's a good 40seconds/1minute before D4F catch up.Chart says trend reversal so you go long, before you know it D4F quote 901-901.5. Ta da!! Profit and a trend to ride for an 1/2 hour!!

The thing is for those who say SB's are stacking the odds against you and are going to move to futures because it easier/better, if you can't beat one guy following the market making £30,000 a year how are you going to beat 100's of professionals who make £500k a year by taking it from newbies?
 
Interesting point that Naz, if you get to making regularly good profits on SB, I guess you will undoubtedly gain by switching to Direct Access...No need to dump the SB's though, just cream them a little smaller. :)
 
There is no contest between SBs and direct access, whether it's futures or shares, IMHO.
Eminis:
I pay $5.80 per round turn, so a 4 contract position costs me a spread of .25 on S&P ie $12.50 X 4 =$50 and fees of $23.2
total $73.20

cmc cfds/sb spread .5 X 4 = total $100 ie 36.6% MORE in costs.

All this assumes you are buying the ask rather than bidding or selling on the bid rather than the ask. In other words acting as a market maker on Globex like buying on the bid/selling on the ask like a market maker on Nasdaq level 2.

Riz - I'm sure this will be the opportunity for you to trade the real market and make more profits. Fins have done you a favour ! ;-)
If I can help in any way email me and I'll do my best.
BTW Are you beta testing B.'s new place? ;-)
 
Thanks Mr Charts,

I do have a few other accounts to carry on with my trading, so FINS suspending my account has no effects on my trades... what upset me was FINS not giving me any reasons for doing it apart from saying "we think internet trading is not good for you" -ridiculous- and refusing to put in writing... those who know me or been with me in trading chatrooms know I play fair and square, ie. I never bother with FINS stuck prices, etc. on the contrary I ask fellow traders not to concentrate on such things and instead try and find good trades... the point here is they should not be allowed to suspend accounts without good and fair reasons, and the regulators have to listen to their clients complaints... even if they restore my internet trading it doesnt mean I'll jump on to it and trade mainly with FINS... but this and many other points raised here with regard to spread bet firms conduct are sound and due to the number of people trading with them we'll keep raising them until they respond and convince us...

I am not betatesting B's new plaice :) but looking forward to its launch in January and got a list of potential clients ready for him :) lurking on S's plaice though :)

Thanks again for the offer to help, I'll keep that in mind...

Riz
 
For what its worth......

Milk the sbs for as long as you can if you go for rolling cash situations. Plan for a change cos it wont last.

Proof is in the pudding
 
:confused:
hmmm...
NowI have 2 queries:-
1) Still don't understand how someones' winning or losing would affect the SB's....
2) What's all this about B and S 's place/plaice ? (anything related to the SB acronym we've begun using around here?)...
:eek: :rolleyes:
:)
 
" Still don't understand how someones' winning or losing would affect the SB's"

If you believe the SBs lay off all their bets you should think again.

think of an Index. Lots of opinions and peoples betting up or down. SBs will only lay off their NETT position as that is their risk. Then as punters take profits or losses, SB company may decide to unwind their positions in the market or not. Remember their software (short term) predicts market direction - hence the bias. So if you win what is effectively an unhedged position (unless it is so large they hedge it - just for you.. LOL:) it's a loss to them.

And if you lose, it's a win for them.


Or if you are long and sell when it's going up, and they have bought the market, they may decide not to sell their hedge and make a profit on that.. even if it's only a few points...


They will hedge very big individual positions or in illiquid stocks where their NETT position moves the market .. but on liquid stocks and indices, they will only hedge the net position..

all imo of course..
 
Hi All

I use a direct line broker to trade the eminis and US stocks and make a reasonable living doing so, About a year ago i opened an account with a spreadbet firm for my girlfreind to use, All i can say is that i have consistently lost money (my girlfreinds) when using them to trade the Dow & Futures , So in my case i can not make money spreadbetting but i can make a living trading with a real broker,I am no way suggesting any newbie should use a direct line broker,But i would say if there is anybody spreadbetting using serious money $5.00 on the dow or $50.00 on the S&P 500 you must be crazy, have balls of steel, or more money than sense to be using a spreadbet firm instead of an online broker.
 
As a matter of interest who do you use - I am in the process of moving from cybertrader to IB.
 
Finspreads

Have only just got round to seeing if this site was up and running ! From most of the posts etc so far it looks like an excellent tool with like minded people helping each other.

I currently use Finspreads but only in a smallish fashion looking really for the longer term trades. Have had a couple of times when the site has locked up but they seem helpful when you phone.

I trade like this as most of the time I am seeing execution only clients who are looking for good rates on futures, options and CFD's. I can beat most rates provided account size and average volume is sound. As an alternitive I can offer PATS systems, TT, RTS and GNI touch for those of you trading for a living.


Hope the posts stay informative

Regards
 
Red cloud

Why don't you save up a stake and trade Italian Bonds?
 
Anyone tried IG new internet trading platform? I hear mostly +ve comments about it...

Riz
 
Hi Riz, just reloaded IG Index.. had an account I never used.

It appears VERY good: as good as if not better than CityIndex: scolling real time quotes with real fills.

Spreads bad as usual but daily Indices are same as City.. and having checked them out - as with City - no bias.

So good in fact I think I will use them...
 
Thanks mf, ringing them for an application form... I already have a cfd acc with them but I suppose I'll need a different acc for spread betting...

Riz
 
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