L
Liquid validity
I don't see an reason why anyone would use an SB anymore really.
Look at the LMAX acct min deposit/size...
They are gunning for SB business by the looks of it same as
betfair did with normal bookies.
I don't see an reason why anyone would use an SB anymore really.
Look at the LMAX acct min deposit/size...
They are gunning for SB business by the looks of it same as
betfair did with normal bookies.
Hi Guys,
Just found the Gotcha on FP Markets as far as I'm concerned and that is that their commission is only 0.1% BUT with a minimum of £10 per transaction (buy and sell) on their full account. So you have to trade £10,000 to get 0.1%.
I guess that I am not quite in that league yet, not by a long shot! However, I did find the FP Markets book on DMA spread betting very informative
So thanks for all the ideas that I have picked up from the T2W forum after which I will definitely change from my IGnonimous trading account but I guess that it will still have to be a standard Market Making type SB company but with lower and fixed spreads wrapping the market spread............... any suggestions?
Thanks
Ian
Just found the Gotcha on FP Markets as far as I'm concerned and that is that their commission is only 0.1% BUT with a minimum of £10 per transaction (buy and sell) on their full account. So you have to trade £10,000 to get 0.1%.
I guess that I am not quite in that league yet, not by a long shot! However, I did find the FP Markets book on DMA spread betting very informative
So thanks for all the ideas that I have picked up from the T2W forum after which I will definitely change from my IGnonimous trading account but I guess that it will still have to be a standard Market Making type SB company but with lower and fixed spreads wrapping the market spread............... any suggestions?
Thanks
Ian
Sorry LV, I totally missed that posting of yours
rsh01- the reason for the coyness about naming the SB was because I was not sure whether it was just something that as a relative newcomer to trading/SB there was something more going on that I was unaware of and I did not want to come in here ranting and raving when I hadn't got my facts straight.
As it happens it looks like it was a mixture of both......
One thing that I had got wrong was I had not appreciated that some SBs were market making and some were DMAs. I assumed that the normal SBs that I use would simply buy the underlying shares from the market so that they were covered either way and simply make their money off the spreads...... Obviously they would have to wait until they had enough shares to make it worth them buying the shares from the market but provided that they have sufficient people trading then that would not take very long. But according to the FP Markets ebook this is not the case which is where conflicts of interest arise.
I'm learning all the time, thanks!
Ian
rsh01- the reason for the coyness about naming the SB was because I was not sure whether it was just something that as a relative newcomer to trading/SB there was something more going on that I was unaware of and I did not want to come in here ranting and raving when I hadn't got my facts straight.
As it happens it looks like it was a mixture of both......
One thing that I had got wrong was I had not appreciated that some SBs were market making and some were DMAs. I assumed that the normal SBs that I use would simply buy the underlying shares from the market so that they were covered either way and simply make their money off the spreads...... Obviously they would have to wait until they had enough shares to make it worth them buying the shares from the market but provided that they have sufficient people trading then that would not take very long. But according to the FP Markets ebook this is not the case which is where conflicts of interest arise.
I'm learning all the time, thanks!
Ian
SlowlyButSurely
Well-known member
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In reality even many large DMA brokers market make, as do most banks. If you are a genuinely good trader they will take on some risk and pass the rest on to someone else. But the reality is that most people are bad traders and so it is worth taking on some risk. At the end of the day it is part of the game, if someone wasn't market making then liquidity would be **** poor hence why HFT algo's are allowed on exchanges.
Of course that is not to excuse SB's who may be based in unregulated countries employing questionable tactics, but firstly use a regulated SB, secondly, most retail traders are terrible and lose money for a variety of factors, SB's can take on risk as they know this. The 10% of winning clients covers the 90% of losing ones.
SpreadBeta
Junior member
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For info.......FP Markets have ceased offering spreadbetting on stocks a couple of months ago (focusing on fx etc now I believe), but the DMA model they offered for trading stocks was very good - via their online IRESS PC client.
If anybody knows of any other SB company offering DMA access to LSE stocks (in a spreadbetting wrapper) can they post here as I would also be interested...
If anybody knows of any other SB company offering DMA access to LSE stocks (in a spreadbetting wrapper) can they post here as I would also be interested...
rsh01
Experienced member
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am pretty sure 99% of SBs market make only, esp re fx. on a portfolio basis - dont think they are clever enough to have a view on direction, so they dont bother. basically if the market moves strongly in one direction the majority of clients are trying to fade it.....& thus they are offside.....so it must be fairly easy to lock in a hedge.
eg IG will only hedge if they are exposed directionally only over a certain amount say £10mn.......anything lower & their strike rate is >50% cos the majority of punters are wrong.
barjon
Legendary member
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Ian
No SB company can be true DMA since then they would become brokers and not bookmakers. It is only because they are bookmakers (hence their own distinctive platforms - even where they offer MT4 it is fed by their prices, not the markets) that their clients are deemed to be "betting" and thus not subject to CGT on their winnings (if any!!).
Because they charge their "commission" via the spread, that spread will always be wider than the direct market but pretty close for the more popular and liquid equities. If you want the tightest spreads you must go DMA with a reputable CFD broker but then their commission may well make it the more expensive option if you are trading small size, particularly if subject to minimum commission. You'll need to do your calculations to see what suits you best - both overall and for the specific equity you want to trade.
Hi Ian,
1. Always make sure the company you're trading with is Home - Financial Conduct Authority regulated.
2. IG Markets, CMC, Day Trading - Your Guide, CityIndex are reliable brokers.
yellowfloyd
Active member
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Hi Ian,
I presume you’re trading indices in Europe. It’s quite normal for spreads to widen overnight as trading volumes quieten. The outfit I use make it clear that spreads widen out of hours (see link). Just before the UK open when all FTSE100 shares go into auction for example, prices can be all over the place so the spread on the index often widens. Given that these indices are tradable 24/5 your overnight order could get a fill at any time. It may be that the upside/downside you are hoping for is at odds with the wider overnight spread and or/volatility you are likely to see in at the market open.
Hi yellofloyd and Hate2Lose,
I'm actually trading stocks, mainly on the LSE.
Thanks for the advice about the FCA I am now moving my trading to City Index. I still have some legacy trades open with Finspreads which is the sister company to CI so all their prices are the same but I like the stand alone Advantage TRader from CI as it does not require such a high speed link as Finspreads and IG Index as the software runs on the local PC and simply collects the data over the internet, as far as I can tell. This makes it much more responsive over phone links etc.
Obviously not superfast but at least it runs and allows me to day trade when away from home!
Regards
Ian
