Worldspreads upgraded!

[MarvinS]

Yes, I have a Worldspreads100 account. It seems to be some kind of 'white label' offshoot of the IG Index / Binary Bet type of platform. I dont trade it that much to be honest as I feel that IG have ripped me off in the past. When you get good they delay your order executions and refuse orders where the market moves against you (in the delay they create) whilst executing orders, when the price betters, without passing on the benefits of the price betterment. As a result I would never bet in any great volume as ultimately you can not win as the 'cost of trading' just goes up and up.

I havent yet tried the WS 1 point spread on their Dow instrument. I do admit to being rather sceptical given the comments made on this and other threads. They say they offer a 1 point spread whilst in a letter to one customer they state that they use "a fully hedged book" so, as an experinced market player, I would ask how on earth they can make any money. You see, in order to be fully hedged they would have to offset a customers order into the market on exactly the same spread (or worse) than they have quoted the customer. When you add it all together it doesnt make any sense. I will investigate further now that they appear to have sorted their dealing platform.

Steve.

Great Comment Steve in relation to para 2: In fact the only way spread betting firms can operate is via having large volumes of trades. Large enough that the spread becomes less relevant and the volumes of business becomes greater. All spread betting companies use the model we have a fully hedged book. In fact that is correct because with sufficient jobbing your book will naturally be hedged. The same reason applies to why each spread betting company employs risk traders, so that if the book becomes larger than a certain level the traders will go and hedge. A fully hedged book does not mean if you buy £10 of FTSE a spread betting companies will scramble to buy 1 lot. If that were the case then spread betting companies would not run any book and would be future brokerages. Spread betting companies pool the risk and then go and hedge if need be, but in an ideal world - We have 5000 T2W customers going short the FTSE some at levels that are worse than the market and some that are at better levels then the market, then we have 5000 Fleet Street customers going long some at worse and some at better levels than the market. This is natural hedging!

I know you are all relatively experienced market players and every time i go out for a lunch with a client the same question pops up! Even city traders have asked me this question. The answer would be that with sufficient volumes in our book, your positions are hedged. Without sufficient volumes we would be forced to hedge in the markets.

 

[c6ackp]

The 1 spread is actually a 1 point spread. Very seldom do I get a re-quote. How WS makes a profit on the DJ, I honestly don't know. I just know that in my trading it has been working. So far I haven't noticed any irregularities...

gle101 - you haven't noticed any irregularities, but what you are saying is highly irregular.

Out of curiosity I enquired @ WS whether I could re-open my WS account now that the slow price problem had been fixed. They said NO. They even admitted to me that slow prices still occur and said that they weren't prepared to be "ripped off".

What this means is that anyone who has had an account closed, or been put on referall will never be taken off referall or allowed to re-open their account (e.g. laptop).

gle101 has stated that he made 800%. Making 800% is not a normal rate of return, so he must've been taking full advantage of slow prices.

Assuming gle101 is a real customer, living in Sweden, the only way gle101 would be allowed back unhindered would be to cut some kind of deal with WS. I think that's where the "Worldspreads Upgraded!" thread comes in.

I don't want to make a big deal out of all this as there are plenty of firms to trade with and I have no axe to grind, but it's not right when folks try to manipulate these boards.

This is just my opinion, but I think many members can see something's clearly a bit dodgy here.

c6

 

[gle101]

I've been looking at this thread for a while now, and it is intermittently amusing. Suffice to say, if I don't understand a broker's business model, ie how he makes money from me I would be cautious trading through him, and combined with the general look and feel I get from their website, I have no interest in an account. But what does make me laugh are your comments Gle101 - if you really have nothing to do with the outfit. What does it matter what someone else's feedback is, if you're happy with WS - fine. Why this endless pumping of WS? Sure Ive got a couple of brokers I think are great (and a few that are crap) and if someone asks for an opinion on one, then I'll happily give it - but the way you keep plugging away promoting WS - to be honest it's doing their reputation more harm than good in my eyes

What is the subject of this thread? I am interested in content regarding trading with Worldspreads and related issues, especially after the speed upgrade. By the way, what is the DMA business model? Do they offer this service for free? There are a lot of traders that are interested in these issues.

About my pumping WS, even though my posts are not liked by some, they do at least, lead to some interesting discussion which we are currently having on this board.

 

[MarvinS]

I've been looking at this thread for a while now, and it is intermittently amusing. Suffice to say, if I don't understand a broker's business model, ie how he makes money from me I would be cautious trading through him, and combined with the general look and feel I get from their website, I have no interest in an account. But what does make me laugh are your comments Gle101 - if you really have nothing to do with the outfit. What does it matter what someone else's feedback is, if you're happy with WS - fine. Why this endless pumping of WS? Sure Ive got a couple of brokers I think are great (and a few that are crap) and if someone asks for an opinion on one, then I'll happily give it - but the way you keep plugging away promoting WS - to be honest it's doing their reputation more harm than good in my eyes

The background is that most spread betting companies if not all run the same core business models. To try to get as many clients trading and thus increase the propensity for the book to be non linear to one market direction. If you have traded with 1 spread betting company there is very little reason why another would run a largely different business model. Perhaps some firms offer tighter spreads/ charts/ seminars/ dealing guides. I know it seems harsh to say this but it is all a lure to get you to trade and it's the truth, but atleast you have a choice.

GLE is a client that signed up over 6 months ago and probably knows our systems better than me. He was booted from trading, but never kicked and screamed about it. He just got his head down and traded elsewhere. However he constantly asked me for updates on when the system would be fine. He showed patience and i think it has paid off for him!

 

[Jack o'Clubs]

By the way, what is the DMA business model? Do they offer this service for free? There are a lot of traders that are interested in these issues.

If you're referring to Futuresbetting specifically then their business model is completely transparent - you pay a commission on top of the market spread, and they instantaneously hedge your trade in the market. A simple chap like me can understand that, and also understand that there is no conflict of interest between me and the company, and trade accordingly.

So no, its not for free because nothing in life is. Which is why I would hesitate opening an account with WS because they seem to be offering something for nothing (particularly if the market spread is wider than a pip at any point). Most, if not all, mug punters lose (eventually) - and I can see how WS might make money purely acting like a bookie, but like all bookies (and talking as someone who has had sports-betting accounts closed by a couple of the high-street names), they will not want consistent winners doing business with them. Which certainly seems to be the experience of at least three contributors to this thread.

So on the one hand, I have a vision of their business model, which seems consistent with comments from several people on here, and I have a company rep and you saying something completely different. In the event of uncertainty, I (and I expect many others) will simply avoid.


EDIT - Thanks Marvin - saw your reply after I had written/posted this. But most spreadbetting firms will start to put barriers in the way of traders who are too successful in short timeframes - I had this first hand with Finspreads. You're effectively saying that WS will act the same way with some traders.

 

[DDI]

Is worldspreadq100 exactly the same as Binary bet.?

If I have an accont with binary bet is there any point in opening one with WS100?

 

[FXSCALPER2]

Hold on a minute. Whether you are hedged or not doesn't tell us how WS makes its money, of course. A hedge gets you to zero, but that is not the point of spread betting firms: you need to make a profit. To say we have 5000 shorts and 5000 longs so we are hedged, while maybe true, doesn't tell us anything at all. And that is true even if your spread is 3 pips. SB firms can only make money if clients lose, or they offset the bets placed with them in the real market. With a 1 pip spread, there is no way they can make money and, therefore, they HAVE TO rely on cleints losing much more than they are winning in aggregate. I have absolutely no problem with this business model at all, but it is important for traders to realise how this stuff works.

Why? Because, if you understand how the business can be profitable for the SB companies, you will take advantage of offers like 1 pip spreads by trading in a way that doesn't bring you to their attention immidiately. If you are going to be the trader who upsets their model, they WILL shut you down, and I would shut you down too if I run a SB firm. Consider how absurd it is for WS to claim they will make money from 1 pip GBPUSD spreads. That is just laughable. The spread has nothing to do with it. They can offer you choice (no spread) and make money because most of their clients lose. In other words, unless they are convinced that the majority of their clients lose, it makes zero sense for them to offer less than 3 pip spreads on any FX pairs. You can't get less than 2 pips spreads (including commsions) in the spot market on most pairs (especially GBPUSD)

Now, 1 pip spread on GBPUSD is way too easy if you want to scalp all day long. Do you think they will allow you to do that? No, of course they won't, because that is like giving out free money.

 

[MarvinS]

If the 1pt spreads had been a huge loss-maker for WS then they'd have stopped it by now. Strange that the others haven't followed suit after six months, though. Capital Spreads ads keep going on about the tightest spreads, so why don't they match the offer?
If WS's platform is up to speed now, all it needs is a few tweaks to make it more user-friendly, i.e. easier closing of positions, improved orders, and an indication that a stop has been hit, so you don't open new bets accidentally. Charts would be useful, too, but I suppose they have to save money somewhere. Given all that, traders would stampede away from CS, IG, CMC, etc until 1pt spreads became the new standard, and we'd all lose a little less money!

Sorry - I am trying to go through as many replies as possible here whilst trading FTSE/DAX and getting my flat ready for the valuers.

Cap Spreads and others haven't reacted yet to us because we ain't hitting there bottom line heavily enough. I think CS will be the first to react in the first few months of next year, PR wise they are the sharpest! But i won't be around for that...

Ok points taken on the tweaks that need to be made but why charts? Is the point that everyone else has them or is it that you need to see how our prices correlate to your feed...

 

[Legion]

What is the subject of this thread? I am interested in content regarding trading with Worldspreads and related issues, especially after the speed upgrade. .

well yes agree gle101 but even after the speed upgrade an quicker platforms, some customers have still remained banned even after letters from worldspreads stating they would be allowed back to have a "Punt"

Dont you find that interesting? WHY. WHY. WHY?

maybe if worldspreads state a big clear we do not allow scalpers on the web or T n C and define what they mean , then banned clients may not be pressing the point.


hmm what about subject the scalper to a 10 point limit min, before closing a trade or if they close within 10 they pay a spread levvy extra 1-2 points after exit.

This would be tagged only to customers accounts who display scalping actions.

Thats the best I can do

there must be a better solution (if price is still a problem for the bookie) rather than all the bad PR that comes with bannings from a bookie.

 

[MarvinS]

Is worldspreadq100 exactly the same as Binary bet.?

If I have an accont with binary bet is there any point in opening one with WS100?

Not much point they are exactly the same...

 

[Blu-Ray]

Worldspreads and Worldspreads100 are 2 different companies right ?

 

[MarvinS]

Not seperate it is just that WS100 is a white label. If you sign up to WS100 you are opening an account with WS100, read the t&c's...

http://www.worldspreads100.com/content/sites/wsp/en_GB/oa_customer_agreement.html

 

[MarvinS]

Hold on a minute. Whether you are hedged or not doesn't tell us how WS makes its money, of course. A hedge gets you to zero, but that is not the point of spread betting firms: you need to make a profit. To say we have 5000 shorts and 5000 longs so we are hedged, while maybe true, doesn't tell us anything at all. And that is true even if your spread is 3 pips. SB firms can only make money if clients lose, or they offset the bets placed with them in the real market. With a 1 pip spread, there is no way they can make money and, therefore, they HAVE TO rely on cleints losing much more than they are winning in aggregate. I have absolutely no problem with this business model at all, but it is important for traders to realise how this stuff works.

Why? Because, if you understand how the business can be profitable for the SB companies, you will take advantage of offers like 1 pip spreads by trading in a way that doesn't bring you to their attention immidiately. If you are going to be the trader who upsets their model, they WILL shut you down, and I would shut you down too if I run a SB firm. Consider how absurd it is for WS to claim they will make money from 1 pip GBPUSD spreads. That is just laughable. The spread has nothing to do with it. They can offer you choice (no spread) and make money because most of their clients lose. In other words, unless they are convinced that the majority of their clients lose, it makes zero sense for them to offer less than 3 pip spreads on any FX pairs. You can't get less than 2 pips spreads (including commsions) in the spot market on most pairs (especially GBPUSD)

Now, 1 pip spread on GBPUSD is way too easy if you want to scalp all day long. Do you think they will allow you to do that? No, of course they won't, because that is like giving out free money.

FX - A hedge does not always mean it gets you down to zero. It means if you are fully hedged you have a flat book, but within all that natural hedging you can make a turn on the market movments. Do not think of every client as a scalper that is in and out for a pip, we also have swing traders and other day traders that are looking to take out more than that.

Business model works the same for all other firms but they charge 2 or 3 pips! I do not see your point if you are trading with a 2 pip spread are you 100% less likely to loose. What is the ratio here? I can scalp the Nikkei on a 5 pip underlying spread DMA and that thing moves 200 in a day easy.

 

[Legion]

Lets bang heads together yes.?

Now the puzzle is, We cannot ban customers, whats the solution/s ?

there is an answer, just finding the way to it,is maybe the hard thing..

Now, open declaration that you scalp or intend to as a client? options? any ? prevention before sign up or an account tailored in some way for the openly declared scalper , is this doable ? what conditions are needed for it to become a possible for both bookie and client?

remember banning is not in the list of possible solutions.

 

[laptop1]

Lets bang heads together yes.?

Now the puzzle is, We cannot ban customers, whats the solution/s ?

there is an answer, just finding the way to it,is maybe the hard thing..

Now, open declaration that you scalp or intend to as a client? options? any ? prevention before sign up or an account tailored in some way for the openly declared scalper , is this doable ? what conditions are needed for it to become a possible for both bookie and client?

remember banning is not in the list of possible solutions.

I Concur

 

[FXSCALPER2]

You are not asking looking for an answer Marvin, are you? Come one mate, you know what I am saying.

1- WS will not make money unless its clients lose

2- With a 1 pip spread it is too easy to scalp GBPUSD all day long

3- Therefore, you either have to have a lot of losing client to offset the winning scalper or you will have to ban him/her.

There is no point saying the hedge takes care of it. You will lose whenever cleints win. With 1 pip spread you cannot offload bets placed with you even if I hold my position all week. You have to buy lower than you sell and sell higher than you buy, which is what spreads are about. Given you can't get less than 1 pip spreads including commssion to offset your position, you are relying on losing clients. This is fine by me, by the way.

Marvin, spreads matter a lot if you want to scalp. I don't even believe I am telling you that.

FX - A hedge does not always mean it gets you down to zero. It means if you are fully hedged you have a flat book, but within all that natural hedging you can make a turn on the market movments. Do not think of every client as a scalper that is in and out for a pip, we also have swing traders and other day traders that are looking to take out more than that.

Business model works the same for all other firms but they charge 2 or 3 pips! I do not see your point if you are trading with a 2 pip spread are you 100% less likely to loose. What is the ratio here? I can scalp the Nikkei on a 5 pip underlying spread DMA and that thing moves 200 in a day easy.

 

[trendie]

You are not asking looking for an answer Marvin, are you? Come one mate, you know what I am saying.

1- WS will not make money unless its clients lose

2- With a 1 pip spread it is too easy to scalp GBPUSD all day long

3- Therefore, you either have to have a lot of losing client to offset the winning scalper or you will have to ban him/her.

There is no point saying the hedge takes care of it. You will lose whenever cleints win. With 1 pip spread you cannot offload bets placed with you even if I hold my position all week. You have to buy lower than you sell and sell lower than you buy, which is what spreads are about. Given you can't get less than 1 pip spreads including commssion to offset your position, you are relying on losing clients. This is fine by me, by the way.

Marvin, spreads matter a lot if you want to scalp. I don't even believe I am telling you that.

this thread is confusing me!! I thought the spread gives the SB its profit.

If a quote was at 100-01.
And there was a buyer, he would buy at 101.
A seller would get in at 100.

If the underlying moved +20 to be quoted at 120-21.

The buyer exits at 120, giving a gain of +19. ( the 1 pip spread being his cost of not getting the full +20).
The seller exits by covering at 121, a loss of -21.

The market moved +20, the winner got +19, the loser got hit for -21.
The SB gets the 2 pip difference.
Marvins description of more players meaning a self-hedged market seems to make more sense than the conspiracy theory that abounds here.

The answer to Legions question is to use the appropriate instrument for the trading style.
If you want to scalp, you go direct access.
SB is, generally speaking, ideal for swing-trading, as the spread is small relative to the size of pip-moves you go gunning for.

(bet Marvin cant wait to move on )

 

[gle101]

You are not asking looking for an answer Marvin, are you? Come one mate, you know what I am saying.

1- WS will not make money unless its clients lose

2- With a 1 pip spread it is too easy to scalp GBPUSD all day long

3- Therefore, you either have to have a lot of losing client to offset the winning scalper or you will have to ban him/her.

There is no point saying the hedge takes care of it. You will lose whenever cleints win. With 1 pip spread you cannot offload bets placed with you even if I hold my position all week. You have to buy lower than you sell and sell higher than you buy, which is what spreads are about. Given you can't get less than 1 pip spreads including commssion to offset your position, you are relying on losing clients. This is fine by me, by the way.

Marvin, spreads matter a lot if you want to scalp. I don't even believe I am telling you that.

1- I agree, I have to add "most" of their clients lose. The same fact applies for DMA.

2- I haven't found it to be that easy, maybe I am a bad trader?

3- The latter part hasn't been the case for me as yet, after the upgrade that is. We'll see, it will eventually show.

 

[MarvinS]

Come on this is the spread betting industry are you really going to re-hash again and again what has been asked? What do you want me to say, either way i cannot agree to everyone's state of mind about spread betting. Do you really think that would be great PR to say, come on trade with us we want you to loose. Look either way i have stuck my neck out to a hiding to nothing. I may of come out a loser but atleast i'd tried and that is in the most part thanks to GLE. GLE's attempts were all in good spirit and i thank him. My Ham-fisted attempts as described by a certain trader may not of worked but hey you live and learn....

 

[MarvinS]

this thread is confusing me!! I thought the spread gives the SB its profit.

If a quote was at 100-01.
And there was a buyer, he would buy at 101.
A seller would get in at 100.

If the underlying moved +20 to be quoted at 120-21.

The buyer exits at 120, giving a gain of +19. ( the 1 pip spread being his cost of not getting the full +20).
The seller exits by covering at 121, a loss of -21.

The market moved +20, the winner got +19, the loser got hit for -21.
The SB gets the 2 pip difference.
Marvins description of more players meaning a self-hedged market seems to make more sense than the conspiracy theory that abounds here.

The answer to Legions question is to use the appropriate instrument for the trading style.
If you want to scalp, you go direct access.
SB is, generally speaking, ideal for swing-trading, as the spread is small relative to the size of pip-moves you go gunning for.

(bet Marvin cant wait to move on )

Actually i will be sad to leave - i've met some really decent traders and people in my time in SB.

Listen the more trading means the greater potential for in mathematical terms covariance this provides a measure of the strength of the correlation between two or more sets of random variates. The trading term for a trader that over trades is called churning and if you mix to 2 variance togehter noise and variance you meet something called the random walk theorem. There is no normal distribution to how the markets work, this is called random walk theorem! Perhaps studying the price action or becoming an experienced trader makes one more aware of the trading enviroments. However if i asked any good trader at any given point where the markets will be in 2 mins 7 times out of 10 you will be wrong. What i am trying to say is that most traders will get it wrong, but utilise all possible entry and exit points that benift you the trader and if that means a better spread why not use it?