ProSpreads, Spread Vs DMA conflict?

[Fiddlers Retreat]

Hi all

Just been looking at prospreads.com, and what they offer seems very good.

I have been reading their website, and done a search on them on T2W...

However, i have a question.

On their website, they say all their charges are included in the spread - as usual. But then they offer Direct Market Access - which is supposed to get you inside the spread - thus eliminating their pay/commision/charges.

How is this possible?

I quote from the FAQs:

"Q: Does ProSpreads charge commission on electronic betting?
A. No. We derive our income from making a spread around the price of the underlying security."

Does this mean they are manipulating the price - even though they are claiming direct market access/clear market prices?

Thanks
Matt:|

 

[Jack Hughes]

it just means they add their extra spread on top of the market spread, which ends up being a whole load of spread, and makes it more expensive than normal futures DMA. No tax on winnings with SB, but it's much harder to make a profit in the first place when the effective commission may be five times higher. $20 rt on YM, for instance.

 

[francisfinley]

it just means they add their extra spread on top of the market spread, which ends up being a whole load of spread, and makes it more expensive that normal futures DMA. No tax on winnings with SB, but it's much harder to make a profit in the first place when the effective commission may be five times higher. $20 rt on YM, for instance.

jack, do you go DMA or SB? i use dealingdesk but recently they have put the trades through referral making my day even harder. prospreads is my last try with SB's before i go to a broker. SB co's are all terrible, i have tried them all. They are what they are and that has to be accepted.

 

[Jack Hughes]

jack, do you go DMA or SB? i use dealingdesk but recently they have put the trades through referral making my day even harder. prospreads is my last try with SB's before i go to a broker. SB co's are all terrible, i have tried them all. They are what they are and that has to be accepted.

Yeah, I've tried all the SBs and you're always trading against two unknowns. Prospreads is very different and much better in most respects, but the spreads just seem too wide and they don't have a chart trading option now.

Have you used GFT, btw?

 

[francisfinley]

Yeah, I've tried all the SBs and you're always trading against two unknowns. Prospreads is very different and much better in most respects, but the spreads just seem too wide and they don't have a chart trading option now.

Have you used GFT, btw?

yeh, i think the best of the bad bunch will be GFT, prospreads. Not much point in using any others imo. After that its use a broker time!

 

[Fiddlers Retreat]

Hi,

Thanks for the info guys its much appreciated.

Matt

 

[alex2006]

Actually, when it comes to spread, currencies on Prospreads are really narrow, even narrower than those in MB Trading.

The screenshot was taken 10 minutes ago around 2:12 GMT.

 

[alex2006]

The only problem with Prospreads is, their currency module, CURRENEX is not fully working yet. Bugs everywhere. Can't close your position, OCO orders don't get filled. Can't pull orders etc etc, you name it.

 

[Jack Hughes]

The only problem with Prospreads is, their currency module, CURRENEX is not fully working yet. Bugs everywhere. Can't close your position, OCO orders don't get filled. Can't pull orders etc etc, you name it.

Another spreadbet company letting clients use their own time and money to develop a platform. Sounds like just what we need.

 

[TomTom]

Alex2006 ,
Been using Prospreads for a few months now.
They are ok for scalping, but like you say, the platform is terrible for Limmit orders ans Stop orders.
One problem is when on magin call the system will not let you close postions.
It will block you.
This was a message I recieved last week..

If blocked please use market orders to exit positions.
I have unblocked you to allow limit orders.




Originally Posted by alex2006
The only problem with Prospreads is, their currency module, CURRENEX is not fully working yet. Bugs everywhere. Can't close your position, OCO orders don't get filled. Can't pull orders etc etc, you name it.

 

[alex2006]

Hi Tomtom,

Many thanks for your tips. It has been the case for me during last few days. During day time, the minimum margin requirement is £1000. I don't want to put too much money on a premature platform. Like you said, it is really good for scalping, i.e. proper very short time trading, not the action taking advantage of quote delay.

 

[top trader]

They are reg. in Gibralter,not in U.K, therefore are clients money safe just in case they decide to go under?

 

[chezlaw]

They are reg. in Gibralter,not in U.K, therefore are clients money safe just in case they decide to go under?

Pretty sure client money is in segregated accounts in Barclays and is totally protected in case prospreads go under (usual rules if Barclays go bust)

 

[A Dashing Blade]

One problem is when on magin call the system will not let you close postions.
It will block you.
This was a message I recieved last week..

If blocked please use market orders to exit positions.
I have unblocked you to allow limit orders.

Absolutely no offence but as I client of their's, I'm pretty pleased that they don't other clients to punt with their (ie ProSpreads) money.

 

[v01101999]

someone needs to confirm if the FB/prospread service is real DMA. I have started noting lately that if I join the bid and say there were x lots on the bid, my order is not filled even after x lots have traded at the bid level (I have checked that with exchange time and sales). It is only filled if the offer moves at my bid level. Also I checked that if I join the bid/offer, it is not reflected in the exchange order book which one can check from some other broker feed or exchange terminal. This can be easily tested by joining bid/offer for an illiquid market at quiet time.

This seems to indicated that the orders are not actually DMA and instead internalised. That would make them no different from any other spread betting company.

can someone confirm my impression by testing on your platform/system.

 

[Jack Hughes]

someone needs to confirm if the FB/prospread service is real DMA. I have started noting lately that if I join the bid and say there were x lots on the bid, my order is not filled even after x lots have traded at the bid level (I have checked that with exchange time and sales). It is only filled if the offer moves at my bid level. Also I checked that if I join the bid/offer, it is not reflected in the exchange order book which one can check from some other broker feed or exchange terminal. This can be easily tested by joining bid/offer for an illiquid market at quiet time.

This seems to indicated that the orders are not actually DMA and instead internalised. That would make them no different from any other spread betting company.

can someone confirm my impression by testing on your platform/system.

That's pretty worrying if it's true, but how could they get away with it?

 

[v01101999]

That's pretty worrying if it's true, but how could they get away with it?

The documents say "DMA like" .. go figure.

 

[Jack Hughes]

The documents say "DMA like" .. go figure.

Interesting. Perhaps things changed when LCG took over and changed the name to Prospreads? I thought the Futuresbetting model was that bets were automatically entered in the 'real' market, the client paying extra spread instead of commission, but I've never quite understood how that made it qualify as betting.

Couldn't find a direct reference to DMA on the site, but they do say ' ...every bet made with us is hedged in the underlying market.'. Maybe that's just through Capital Spreads now, so the extra spread just pays for the absence of dealer intervention and platform speed?

 

[chezlaw]

Interesting. Perhaps things changed when LCG took over and changed the name to Prospreads? I thought the Futuresbetting model was that bets were automatically entered in the 'real' market, the client paying extra spread instead of commission, but I've never quite understood how that made it qualify as betting.

Couldn't find a direct reference to DMA on the site, but they do say ' ...every bet made with us is hedged in the underlying market.'. Maybe that's just through Capital Spreads now, so the extra spread just pays for the absence of dealer intervention and platform speed?

I was at a Prospreads seminar the other day and they claimed many times absolutely catagorically that the prices seen were the market prices exactly the same as anyone else in the world would see. They then add their spread on top.

It would be scandalous, very stupid and I suspect highly criminal for that not to be the case and I'd want to see some serious evidence before believing it.

Note: I haven't used them yet

 

[chezlaw]

someone needs to confirm if the FB/prospread service is real DMA. I have started noting lately that if I join the bid and say there were x lots on the bid, my order is not filled even after x lots have traded at the bid level (I have checked that with exchange time and sales). It is only filled if the offer moves at my bid level. Also I checked that if I join the bid/offer, it is not reflected in the exchange order book which one can check from some other broker feed or exchange terminal. This can be easily tested by joining bid/offer for an illiquid market at quiet time.

This seems to indicated that the orders are not actually DMA and instead internalised. That would make them no different from any other spread betting company.

can someone confirm my impression by testing on your platform/system.

One thing (among many) I wasn't sure about is where orders exist.

They said, in answer to a question, something about orders not being acted on if your interent connection was down. That implies orders are stored locally on your computer order book and triggered when the conditions are met rather than being held on the exchange order book. Doesn't mean Prospreads are internalizing or making a market of any sort like a SB company.

Clarification would be very useful.