Thank you - sounds to me as if things are fine on the hedging front with PS, then. Out of interest, does anyone disagree with this?
Thank you - sounds to me as if things are fine on the hedging front with PS, then. Out of interest, does anyone disagree with this?
How do you mean by disagree? In general, I'd say that 'normal' SB providers are able to offer narrow spreads at least partly because the most traded markets will tend to self hedge, so they only need to keep their overall position under control. FuturesBetting, on the other hand used a system that automatically hedged in the underlying market, for which you paid with a comparatively wide spread (effectively a commission).
When FB became ProSpreads the business model apparently changed, because they used 'strategic' hedging, which doesn't quite make sense to me, because at some stage they have to decide who/what/when they hedge directly. I can't see how this would have anything to do with punters wanting to trade different directions at the same time, unless they had a huge number of clients - and they don't, unless it's all tied in with Capital Spreads.
As I see it, although the speed of PS's platform would make it ideal for short-term trading, the extra spread would sap away the profit. The worst of both worlds of DMA and spreadbet trading, particularly if you have to pay tax.
Could you speculate as to how they might decide whether to hedge or not, given that they've said they make the decision without paying any consideration whatsoever to the given client's trading history.
I don't understand it either. I wonder what % of trades they do hedge - because as you say, much of the time when someone punts one way, there won't be anyone punting the other. Maybe it is all tied in with CS as you say?
kevin sims
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Ross + Johnn i have been reading this thread and every negative comment that has been raised from funds to hedging seemed to have been dealt with, im guessing that neither of you have a account with ProSpreads? i was considering using them as from reading the 53 pages there does not seem to be any of the normal spreadbet issues that pop up with every single other bucketshop, so i would suggest it would be best to try and then report back on here with your findings as this is something which i am going to do as trying the demo account and so far all very good so proceeding with the live process today, fingers crossed 
Yes - I am going to be trying them too...but while I can't really see the point of view of people who are less sceptical than I am, I tend to have respect for the point of view of people who are more so!Ross + Johnn i have been reading this thread and every negative comment that has been raised from funds to hedging seemed to have been dealt with, im guessing that neither of you have a account with ProSpreads? i was considering using them as from reading the 53 pages there does not seem to be any of the normal spreadbet issues that pop up with every single other bucketshop, so i would suggest it would be best to try and then report back on here with your findings as this is something which i am going to do as trying the demo account and so far all very good so proceeding with the live process today, fingers crossed
A Dashing Blade
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ie those people who actually have an account with them?
Ross + Johnn i have been reading this thread and every negative comment that has been raised from funds to hedging seemed to have been dealt with, im guessing that neither of you have a account with ProSpreads? i was considering using them as from reading the 53 pages there does not seem to be any of the normal spreadbet issues that pop up with every single other bucketshop, so i would suggest it would be best to try and then report back on here with your findings as this is something which i am going to do as trying the demo account and so far all very good so proceeding with the live process today, fingers crossed
Tried the demo years ago, and it was indeed lightning fast, but decided against opening an account because they didn't have chart trading. Now I probably wouldn't be rich enough to qualify, anyway(!), but I'm still interested. I reckon PS would need to make a few changes to attract new clients, more so than ever now the rest of the SB industry has improved so much in respect of spreads and platforms.
Shaun12uk
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Kevin,
I have never personally seen any negative comments from anyone using Prospreads and would be keen to hear from somebody trying them out!
Despite some posts appearing negative on the forum I feel it is within all our interests that their integrity is questioned both from the perspective of security of Client funds and confirmation of how they operate which will give some indication of how you will fair trading with them!
I have never personally seen any negative comments from anyone using Prospreads and would be keen to hear from somebody trying them out!
Despite some posts appearing negative on the forum I feel it is within all our interests that their integrity is questioned both from the perspective of security of Client funds and confirmation of how they operate which will give some indication of how you will fair trading with them!
A Dashing Blade
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Like it so far . . .
Already done. Like I said, had my little brother check this out before opening an account with them, also delved deeper into the Gibralter / London regulatory issue via legal friends and came away perfectly happy.
There business model is blindingly obvious. I'll try to summerise using short words.
Wrt exchange traded futures (which is what I have been using them for 5 (?) years . . .
1) You trade directly on the underlying market via their platform.
2) Occaisionally they may cross a trade internally if, for example, one of their clients is on the bid and another of their client's wants to sell at market.
3) Instead of paying them a commission per lot, the "commission" is added the price you trade at. Via a nifty bit of legal slieght-of-hand, this can legally now be called a "spread-bet".
With the greatest of respect, if you do not understand, and fully appreciate how simple this business model is, then you shouldn't be trading futures.
Furthermore, no sane company is going to fully disclose the intricacies/fine details of it's business model, so, to my mind, demands that they disclose when, how, and how often they hedge are wastes of bandwidth.
Disclaimer : I've worked in the City since 1985 on equity, equity derivative, futures (including LIFFE floor) and bond trading desks so what may be blindingly obvious to me may not be to a layman.
So what % of lots traded don't get hedged, would you guess? Nearer 10% or 90%?
rawrschach
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they are hedged, just not on the open market
A Dashing Blade
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<1%
How do you know that, and if it's true why would they even bother?
A Dashing Blade
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Thanks, DB.
To save on transaction costs? Could PS maybe give us a from-the-horse's-mouth approximate %? An upper bound that's a power of 10 would be fine. E.g. <10% or <1% or <0.1%.
Johnn
No company would disclose this so why should they, it really doesn't matter to the client as long as they get good fills, basically at the level the client wants there is no problem.
ProSpreads
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Nothing to do with this discussion, just wondering if anybody has registered for the ProSpreads training day.?
http://www.prospreads.com/training-day.php
