finspreads - Closing Early

[maninbag]

I don't know if anyone else has noticed but finspreads are closing their Binaries early.

It started over 2 weeks ago when the 'market closed' message came up with about 15 secs to go. By last week this had gone up to 20 secs.

Today it seems to be 22/23 secs.

Both IG & City Index seem to be closing on time (i.e. with 1 minute to expiry).

I have spoken to finspreads about this and they originally claimed it was a 'system clock error' that would be fixed asap.

Quite worryingly today they claim that there is no problem at their end.

Could someone else keep an eye on their closing time, particularly the hourly binaries, as I would like to know whether it is a general problem or just another method of dissuading trades.

 

[Pippppin]

sounds like another ruse to shift the odds even more in their favour........though I could be wrong.

i would keep an eye out but theirs is the only spreadbetting platform which does not function properly on my pc due to it not being able to detect my flash plugin

 

[maninbag]

I watched exactly what happened coming up to 10:00am.

The explanation for them closing early would appear to be twofold.

1) Their system clock (as displayed on their dealing screen in the blue bar next to 'market description') is simply wrong (by about 11 secs).
I use two computers and syncronised my system clocks with 2 different internet clocks (both of which state the same time!) and checked against IG and City Index.

2) The hourly binary closed at 9:58:48 on their own clock.

Unless anyone can shed further light on this I am assuming that it is something that affects everyone and not that they are just picking on me!

 

[leunt]

I watched exactly what happened coming up to 10:00am.

The explanation for them closing early would appear to be twofold.

1) Their system clock (as displayed on their dealing screen in the blue bar next to 'market description') is simply wrong (by about 11 secs).
I use two computers and syncronised my system clocks with 2 different internet clocks (both of which state the same time!) and checked against IG and City Index.

2) The hourly binary closed at 9:58:48 on their own clock.

Unless anyone can shed further light on this I am assuming that it is something that affects everyone and not that they are just picking on me!

I've noticed that as well,so worry not we're all on the same boat.

 

[Bintrader]

Same here, are all you guys on manual or slow quotes?

I've noticed that as well,so worry not we're all on the same boat.

 

[maninbag]

Same here, are all you guys on manual or slow quotes?

I understood all finspread trades to be manual.



Just to clarify, I have had no particular problem with slow quotes from finspreads

The current problem is simply that the quoted period closes early. Once you know it's happening it is a choice whether to continue dealing with them. My only concern was that I got caught out a couple of times before I realised what was happening and wasn't able to close out my position.

 

[Peter]

I also have noted a few weeks ago that Finspreads had closed their cash DOW about a minute before the close.. I was going to close a position out and couldnt.

 

[Peter]

Yesterday on IG index just before the fed meeting I bought a 11580 DAILY cash dow put.
The mkt was at 11620 40 points away.

there was less than 2 hrs to go.

I realise volitity can be high and all that , BUT I couldnt belive what they did.

I only took out a small £2 a point option costing 7 points.

The market went in the direction I expected and when it was about 25 points lower I was £15 IN PROFIT.

About 10 mins later it was just a wisker away from 11580 and I wanted to close out as I had a time point that told be to close at around 19.45 hrs. UK

I looked at my profit and it wa £1.

Even though the mkt had dropped a further 15 points the profit droped by 15 times.

I called and complained.. Initially I got the story we have to cover ourselves and Id traded at the most volitile time... I said what are you playing at here... Ive also got to beat you spread .. I also said how the prce had dropped severe.

When I said it had dropped by a factor of from £15 to £1 the dealer went quite and even he seemed to suggest something was wrong..

BUT I didnt get anywhere with it.

What annoys me is I only had less than 2 hrs on this option... They screwed the price up totally IMO.

Its hard enough to beat these companies, let alone any corrupted prices etc

 

[stevespray]

Yesterday on IG index just before the fed meeting I bought a 11580 DAILY cash dow put.
The mkt was at 11620 40 points away.

there was less than 2 hrs to go.

I realise volitity can be high and all that , BUT I couldnt belive what they did.

I only took out a small £2 a point option costing 7 points.

The market went in the direction I expected and when it was about 25 points lower I was £15 IN PROFIT.

About 10 mins later it was just a wisker away from 11580 and I wanted to close out as I had a time point that told be to close at around 19.45 hrs. UK

I looked at my profit and it wa £1.

Even though the mkt had dropped a further 15 points the profit droped by 15 times.

I called and complained.. Initially I got the story we have to cover ourselves and Id traded at the most volitile time... I said what are you playing at here... Ive also got to beat you spread .. I also said how the prce had dropped severe.

When I said it had dropped by a factor of from £15 to £1 the dealer went quite and even he seemed to suggest something was wrong..

BUT I didnt get anywhere with it.

What annoys me is I only had less than 2 hrs on this option... They screwed the price up totally IMO.

Its hard enough to beat these companies, let alone any corrupted prices etc

It's all about understanding how an option is priced. Pre Fed they must have had a higher IV (Implied Volatility) in their calculation. This is held high until after the Fed announcement at which point the IV is dropped (since the annoncement which creates the random volatile event has now passed). Once the IV drops so does the likelihood of the market trading in to the money on your Put and hence the value of that Put reduces. In simple terms, once the Fed announcement was out of the way the odds of the market moving any great distances were significantly reduced. Oviously the market maker isnt going to hold the price of his Puts high once the announcement is made as he's just lose money as people move in and sell Puts to him because he is offer well over the odds in remaining time premium.

Hope this helps,
Steve.

 

[Peter]

Hi Steve,

Im no expert on options, But I get the general idea what you say,

The thing is the put I bought was no doubt overpriced due to volitilty, but the price did hold for what appeared some time, estimate 20 to 30 mins, BUT when it almost touched the money they just reduced it severely IMO... It was like all the hard effort in seeing the market reach the target , the proift potntial just vanished all of a sudden.

I still think they were unfair on how they priced it.. My opinion only being the one who took the trade.

It seemed to me like they just rigged too much in their favour which no doubt they have the power to do.

 

[stevespray]

Peter, I see the point you are making and understand that frustration but the truth is that they can not 'rig' it so to speak as they are not in control of the outcome of the event on which you are speculating. They offer a two price. This means that if they reduce the value of the Put too much it would become very attractive to other Put buyers. My guess would be that they leave the IV high for 20 mins or so after the announcement and then reduce it slightly once they feel that the market has settled back down. I would suggest however that half the battle with trading these instruments is understanding how they work. I dont just mean options models as a whole but more how the companies which provide them act. Once you know how they are going to react to certain situations then you are on a much more level playing field. Next time you'll know that after 20 mins or so they're going to cut the IV and hence your trading plan can now take that into account.

I would suggest that the problem which your particular Put had was that it never really went 'into the money' by more than a few points. At that moment the Delta was 50%. For the value to really take off you need to remain on a high IV 'at the money' or motor 'into the money' where the Delta really start to take off.

Steve.