Start our own Best SB Firm

[Poem 101]

ross, scose

of course this is how most SB companies (in fact nearly all market making / FX / CFD / Betting / gaming companies) make the bulk of their money. I was responding to a question about only having 'contract size' bets going through an exchange. Which I personally would not see as a viable long term prospect.

Simon

Hi Simon,

Kyte group do it, and I was under the impression that Prospered, although not actual dma, only allows trading in standard lots / contracts and thereby offers something very close to dma.

 

[Ross Spur]

Hi Simon,

Kyte group do it, and I was under the impression that Prospered, although not actual dma, only allows trading in standard lots / contracts and thereby offers something very close to dma.

As I understand it they hedge as they see fit, like a normal SB, but you pay high commission rates (as spread) in exchange for always trading at the actual underlying price.

 

[DJS1]

Luc

actually it is not even as easy as that.

yes you have lost the requirement for dealers but you still need all the rest! The only 'money' you would make would be the commission that you charge for your clients trades. You will find that the spreads offered in the 'real world' are generally no better (and often worse) than those offered by the top SB companies.

Capital Spreads average client trade size is just £5. In the FX world this type of size would cost a fortune to clear. So for every client who trades in 50 to 100 quid we have 20/30 who trade in £3 or less. You would immediately lose out on all this biz!

But the real killer is the 3% gaming duty. A client makes a £10 trade in the FTSE, you charge him perhaps £3 a side, £6 round trip, you will be charged a few quid by your clearer. Client loses £500 on trade. You owe the inland revenue £15 in gaming duty. Net loss to you ....perhaps £12

You can never recoup this gaming duty even if the client then makes money off you later on.

This is why the one company offering this type of business in the UK requires that losing clients then pay an extra percentage on their losing bets to make up for this tax (so not only have you lost but, to add insult to injury, you then have to pay more for your temerity in actually doing so).

Our unit in Gib Prospreads ( Direct Market Access Functionality Spread Betting For Professionals | ProSpreads ) offers DMA functionality but does not have the problem over the 3% gaming levy so if you are looking for this type of trading you might find that it is already out there.

Simon

Simon,

I have an account with ProSpreads, IG Markets and FP Markets (trading both SB and CFD). At least two of these companies are actually DMA in ALL instruments they offer rather than claiming to be so....2 of these companies are also based here in the UK rather than a tax haven where FSA rules on client funds are non existent, which in my mind is pretty damn important after the MF episode (who I also unfortunately had the pleasure of having an account with)

The charge on losses is at least transparent and to be honest if your a decent trader who makes money the charge is completely irrelevant

 

[yellowfloyd]

Simon,

I have an account with ProSpreads, IG Markets and FP Markets (trading both SB and CFD). At least two of these companies are actually DMA in ALL instruments they offer rather than claiming to be so....2 of these companies are also based here in the UK rather than a tax haven where FSA rules on client funds are non existent, which in my mind is pretty damn important after the MF episode (who I also unfortunately had the pleasure of having an account with)

The charge on losses is at least transparent and to be honest if your a decent trader who makes money the charge is completely irrelevant

Saxo and Accendo Markets also use DMA.