What is the Underlying Market at Finspread

[snip]

I'm about to swing trade US shares on Finspread using the DEC contract and I want to trigger stop orders on the actual share price(market), not the Fins quote. Is the underlying market the real share price or some future price.?

I know The index's have CASH and FUTURE markets. So when trading the index's on a SEP/DEC contract, the underlying market is a future price and when trading the Daily Cash the underlying market is the Cash(real) price. But do shares have a future as well as a cash market.?

Hope thats clear...

Cheers Snip

 

[stevet]

think i get your point - stocks do have a futures market - but it so illiquid that it would be no use for what u want - why not use the real stock price to trigger your trades with the spreadbettor? or are u saying that the spreadbettors offer a futures price for stocks? if they do - it would be real unlikly to be based off the futures prices of stocks - more likely just a fixed level away from the underlying cash price

but i dont speadbet - so cant be sure

 

[snip]

stevet

I have emailed Fins on this and there replies have always been a little vague, hence the post on T2W. They just say "The price will be based on our futures", but I didn't think there was a future market for each share. Index's yes, but not shares.!

If you are correct in your assumption that shares do have a future market, then I have learned something today.! Are there charts on the net anywhere for these share futures.

Also I wonder if all the SB companies base there DEC share contracts on a future price. Maybe some base it on the real share price. Anyone know about this.?

Cheers Snip

 

[stevet]

snip

as i said i do not trade with spreadbettors and its been a while since i saw a spreadbetting site - i suspect that their futures prices are as i said based on the cash price and not the real futures price for the share and that it is just some sort of marketing initiative

but am happy to be corrected on that by anyone who knows for sure

what i do know is that if the spreadbettor's futures prices for stocks were really based on the real futures prices for stocks - you would want to stay well away from trading it as u would get burned big time!

you might find them a bit vague on the subject as they probably dont really understand it themselves - in which case a double reason to stay away!

 

[eminem]

Snip, I think the answer is in the fact that US shares now have what are called Single Stock Futures, similar to futures for the indeces. They have expiry dates like that of normal futures and are based on the "delivery" of 100 share blocks. If you put "Single Stock Futures" into a search engine you should come up with quite a few sites to have a look at which should answer your query in more detail.

HTH

 

[stevet]

eminem

yep - those are the futures for stocks - which is a new concept to the US, but we have had futures on stocks in the UK for a long time and the IBEX in Spain has i think had futures on stocks even longer - but in general there is no volume in any of them and no one is trading them - and low volume is very very dangerous for inexperienced traders - not opportunity - so i doubt very much if spreadbetting companies would base prices on them

 

[eminem]

Stevet

Good point, I hadn't looked at the volume traded by those instruments as I don't trade US stocks myself, however, it was just a thought on my part as to how the SB co's were pricing their related instrument. As we know SB co's can be a law unto themselves when it comes to quotes and they MAY take those SSF prices into the equation I don't know for sure though. You are right in what you say about the volume though, low volumes can give spikey prices and catch out the unwary.

 

[stevet]

eminen

yep - and even if the spreadbettors ran their prices off the real futures contracts - there would be some really pissed off traders betting with them who would not believe the prices they might get spiked out at genuinly by the spreadbettors - and in the best case scenario! - the spreadbettors could pretty much close out bets at any price they chose on a spike - so i suspect -that as i said - it is just some marketing idea or they charge a wider spread for pretty much the same thing as the cash - just to help themselves make a few more bucks for a good cause - their wallets!