Worldspreads upgraded!

[MarvinS]

Can one possibly ask how many accounts Worldspreads have? Oops, maybe that is a well kept secret?

About 1000 active and we are getting on average of 10 new accounts per day...

 

[gle101]

About 1000 active and we are getting on average of 10 new accounts per day...

Thanks Marvin.
I was kind of surprised to get an honest answer on this. It proves at least for me that Worldspreads is a very open company.

 

[Jack o'Clubs]

Remember that spreadbetting isn't 'tax-free' from the Treasury's perspective. For us punters winnings may be, but the Treasury is taking a nice cut from the bookies/spread-bet companies on bets taken as part of the gambling revenue tax which replaced the tax which used to be levied on punters. So I'd imagine HMRC will be pretty relaxed about the likes of Barclays entering the fray.

 

[MarvinS]

Remember that spreadbetting isn't 'tax-free' from the Treasury's perspective. For us punters winnings may be, but the Treasury is taking a nice cut from the bookies/spread-bet companies on bets taken as part of the gambling revenue tax which replaced the tax which used to be levied on punters. So I'd imagine HMRC will be pretty relaxed about the likes of Barclays entering the fray.

Jack O'C - Yes good point i never really thought about that. I have been told spread betting companies actually have to pay a betting duty of 3% on net client losses and 6% on sports. So in effect SB's really want winners!

 

[gle101]

Jack O'C - Yes good point i never really thought about that. I have been told spread betting companies actually have to pay a betting duty of 3% on net client losses and 6% on sports. So in effect SB's really want winners!

Yes please Marvin, serve us well!
If they make SB tax able, I guess they will take away the gambling status from SB. The tax authorities sure are a clever bunch of people, at least here in Sweden, ha ha!

 

[gle101]

Jack O'C - Yes good point i never really thought about that. I have been told spread betting companies actually have to pay a betting duty of 3% on net client losses and 6% on sports. So in effect SB's really want winners!

There is also another interesting angle to consider. If SB in the future becomes taxable, and thus the 'gamble' status on SB's financial instrument is removed, could that perhaps be an opening for a gigantic market in the USA? In any case, it could be a hard issue to solve, as the USA is very protective of its market. As we know, this year's legislation against foreign gambling outfits has been very aggressive. Today SB is not legal in the USA, the same applies for CFDs, maybe you Marvin or anybody else on this forum could comment on why CFDs is not legal in the USA, as CFDs in contrast to SB are taxable in Europe. The answer is probably, that most CFDs instruments on the market are run by Market Makers, and such ventures in the USA are labeled as gambling. At the same time one wonders, why is the Forex industry, with all the retail Forex brokers, allowed in the USA?

 

[Directional]

it dates back to the old bucket shops which originated in the US. a broker cannot handle a client transaction without placing the trade into the underlying market.

If you've ready anything about Jesse Livermore, he used to trade from bucket shops all the time.

By the US definition of the word, SB firms are bucket shops

 

[gle101]

it dates back to the old bucket shops which originated in the US. a broker cannot handle a client transaction without placing the trade into the underlying market.

If you've ready anything about Jesse Livermore, he used to trade from bucket shops all the time.
By the US definition of the word, SB firms are bucket shops

Is a definition of a word from a legal standpoint, really enough to ban a whole financial sector? It seems so, as the USA has banned SB's from operating in the USA. What is the legal difference between a SB and a retail Forex broker, they are both considered by some to be "bucket shops"? And they both operate with spreads instead of commission. But the SB's are not allowed to operate in the USA, while the latter is. A noticeable difference is you don't pay tax for SB but for retail Forex brokers you pay tax on profit.

 

[Directional]

presumably the latter must have some underlying reserves of the currency they are dealing in, or else hedge everything off in the interbank markets.

I dont really know to be honest, not my field of interest at all

 

[gle101]

presumably the latter must have some underlying reserves of the currency they are dealing in, or else hedge everything off in the interbank markets.

I dont really know to be honest, not my field of interest at all

Thanks for your input.
Yes I agree, it is kind of a tricky issue, maybe somebody else on the forum has an angle to this?

 

[ns1000]

Is a definition of a word from a legal standpoint, really enough to ban a whole financial sector? It seems so, as the USA has banned SB's from operating in the USA. What is the legal difference between a SB and a retail Forex broker, they are both considered by some to be "bucket shops"? And they both operate with spreads instead of commission. But the SB's are not allowed to operate in the USA, while the latter is. A noticeable difference is you don't pay tax for SB but for retail Forex brokers you pay tax on profit.

It's nothing to do with the fact it's called betting, although clearly this would also be illegal. The ban is on allowing retail investors to trade stocks on a geared basis (specifcially offering more than 50% margin if I remember correctly). This is the same whether SB or CFDs. The law was changed to permit stock futures a few years back. Even in the unlikely event of the UK tax authorities changing the tax status of SB, the SEC is not likely to embrace the concept.

 

[gle101]

It's nothing to do with the fact it's called betting, although clearly this would also be illegal. The ban is on allowing retail investors to trade stocks on a geared basis (specifcially offering more than 50% margin if I remember correctly). This is the same whether SB or CFDs. The law was changed to permit stock futures a few years back. Even in the unlikely event of the UK tax authorities changing the tax status of SB, the SEC is not likely to embrace the concept.

Thanks ns1000.
Yes I agree, that is probably the case, still you have more than 50% leverage on most of the retail Forex brokers. I guess, they did not anticipate such a strong growth in this sector.

 

[ns1000]

Thanks ns1000.
Yes I agree, that is probably the case, still you have more than 50% leverage on most of the retail Forex brokers. I guess, they did not anticipate such a strong growth in this sector.

50% leverage is for stocks. There's no such restriction for FX, which is freely available in the US (FXCM, Oanda etc all offer around 1% margin). It would be perfectly legal for a SB offering only forex to open an account for a US citizen - it just wouldn't be classed as betting.

 

[stevespray]

Spreadbetting is not allowed in the US. I think this is purely down to reasonably tight SEC regulations with regard to stocks and derivatives. One imagines that there may be a market for some kind of CFD's offering but the 'red tape' is most likely putting most companies off. There are so many rules and regulations that would have to be adhered to. Rules and regulations by the way that protect the customer. For a start anyone who had an account balance of less than $25,000 would be subject to 'pattern day trade' rules which would be very restrictive. Secondly there are strict rules on 'timely execution' which lets say doesnt really fit into the agenda of many of the current Spreadbetting and CFD vendors which exist in the the UK. For example they wouldnt be able to just delay execution on the quotes they offered - those quotes would be binding - that would present a real problem to companies based in the UK at the moment because they'd be practically powerless to interfere with client executions. That alone could turn into a fairly costly business. The bottom line is that its the rules and regulations which are keeping the companies away combined with the amazingly low costs of commissions and spreads which exist the 'real market' already.

Steve.

 

[gle101]

Spreadbetting is not allowed in the US. I think this is purely down to reasonably tight SEC regulations with regard to stocks and derivatives. One imagines that there may be a market for some kind of CFD's offering but the 'red tape' is most likely putting most companies off. There are so many rules and regulations that would have to be adhered to. Rules and regulations by the way that protect the customer. For a start anyone who had an account balance of less than $25,000 would be subject to 'pattern day trade' rules which would be very restrictive. Secondly there are strict rules on 'timely execution' which lets say doesnt really fit into the agenda of many of the current Spreadbetting and CFD vendors which exist in the the UK. For example they wouldnt be able to just delay execution on the quotes they offered - those quotes would be binding - that would present a real problem to companies based in the UK at the moment because they'd be practically powerless to interfere with client executions. That alone could turn into a fairly costly business. The bottom line is that its the rules and regulations which are keeping the companies away combined with the amazingly low costs of commissions and spreads which exist the 'real market' already.

Steve.

Good points Steve, thanks.
FX doesn't have a strict regulation on the lines that applies to other financial instruments. Probably because it doesn't fall under the SEC umbrella of responsibilities. Yes I agree, rules and regulations are to protect the customer. The Bankruptcy of Refco proved the need for that, a couple of years ago. However, banning the whole online gambling industry in Europe is not in order to protect their own gambling population.

 

[MarvinS]

I wondered why SB firms never took US clients, thank you for confirming this chaps!
Does anyone want to trade credit derivatives with a bank in HK???

 

[qmpma1]

I'm trading with Worldspreads

Wanted! Traders that are trading live with Worldspreads. There are not that many on this thread that actually are trading live with WS. Please join this board and share your impressions. In recent days I think this thread has lifted to much higher standards, with very interesting posts and great content by many contributors, with good insight in how this industry works. Keep posting!

Hi, I have been trading with Worldspreads for a few weeks now. No complaints. Scalping the GBP/USD between 8am-4pm when the 1 point spread is active. Takes a little while getting used to the price movements which seems dampened - (i.e. it is not as jerky/reactive as some other spread betting sites - which has it's advantages/ disadvantages). Another factor I have noticed is that graphs I use tend to be about a second or so behind Worldspreads prices movements, which is another point to get used to - keeping an eye on the actual price movements as reported by Worldspreads, not just the graphs. I currently have a relatively small account and trade the largest £/point I can with the account (since you need £150 margin for every £1/point). On average I would say I am only in a trade for a minute or so to win 2/3 points on average. (I wouldn't mind if Worldspreads could provide a simple graph function, similar to Capital (which is basically the same software platform) or IG (both of which use the same Graph control).

 

[Phil Mibbutz]

According to vicious rumours on this board, if you're scalping two or three points and making a profit it won't be long before WS make life more difficult for you. Let us know what happens!

 

[MarvinS]

Hi, I have been trading with Worldspreads for a few weeks now. No complaints. Scalping the GBP/USD between 8am-4pm when the 1 point spread is active. Takes a little while getting used to the price movements which seems dampened - (i.e. it is not as jerky/reactive as some other spread betting sites - which has it's advantages/ disadvantages). Another factor I have noticed is that graphs I use tend to be about a second or so behind Worldspreads prices movements, which is another point to get used to - keeping an eye on the actual price movements as reported by Worldspreads, not just the graphs. I currently have a relatively small account and trade the largest £/point I can with the account (since you need £150 margin for every £1/point). On average I would say I am only in a trade for a minute or so to win 2/3 points on average. (I wouldn't mind if Worldspreads could provide a simple graph function, similar to Capital (which is basically the same software platform) or IG (both of which use the same Graph control).

We are in the process of allowing clients to gear up more than the typical 150* stake! I agree 100% that with a trade and stop one should be able to say place a £10 trade with a stop 20 pips away that only requires £200 margin. A Very good point! I must also add that our system allows stops and limits at a minimum 5 pips away at the moment, which has also been a major selling point. Charts are being looked into! You need to let me know what you want...

 

[gle101]

Hi, I have been trading with Worldspreads for a few weeks now. No complaints. Scalping the GBP/USD between 8am-4pm when the 1 point spread is active. Takes a little while getting used to the price movements which seems dampened - (i.e. it is not as jerky/reactive as some other spread betting sites - which has it's advantages/ disadvantages). Another factor I have noticed is that graphs I use tend to be about a second or so behind Worldspreads prices movements, which is another point to get used to - keeping an eye on the actual price movements as reported by Worldspreads, not just the graphs. I currently have a relatively small account and trade the largest £/point I can with the account (since you need £150 margin for every £1/point). On average I would say I am only in a trade for a minute or so to win 2/3 points on average. (I wouldn't mind if Worldspreads could provide a simple graph function, similar to Capital (which is basically the same software platform) or IG (both of which use the same Graph control).

Thanks qmpma1 for your input.
I wonder what chart package do you you use? You are saying it laggs behind the WS feed. I think one have to use the live cash feed of the GBP/USD, WS has this as underlying asset, if I am not altogether mistaken. You seem to be doing fine without it anyway. On such short time frame, I guess you are using mental stops?