Jack Hughes
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Can and do, although most punters lose without any 'help' from the spreadbet company.
Worldspreads
- Thread starter Phil Mibbutz
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Can and do, although most punters lose without any 'help' from the spreadbet company.
I thought that you were saying that traders were doing something illegal but now I see you were asking the question about Worldspread. All these spreadbet companies start playing games when you win. They use mostly delayed execution and bad fills to get you to move on if you are successful. The losers always end up getting fantastic service.
neil
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I note their latest advertisement for Worldspreads (Banner Ad. on T2W) offers zero spread for a £5000 account ?
and FREE guaranteed stop limited accounts??
Are they seriously trying to challenge the likes of IG?
Never a truer word spoken.
I believe whatever the sb company does most punters will lose due to bad money magement overtrading ect.
Hence the new "0 spreads" offer
New it would come some day.
neil
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Only for £5000 accounts +
SausageKingofMexico
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From what I've read and learned from all of you Spread betting is just too much like gambling and not at all like actual trading. Spread betting Companies seem to in turn behave more like a Casino and less like an investment house. I'll stick Currency Trading, FXCM has done fine by me so far. And I thank you all for your comments and opinions.
Worldspreads is a disgrace to the industry. Every trade is referred and if it happens to be losing and falling fast they will never let you close it. Each time you try again to click close on the Trade Referral screen they hold it say 2-3 minutes then another screen appears stating "the price has moved, please try again later". This is an impossible way to trade and most unprofessional on their part. Likewise, when you attempt to close a winning trade and especially if you try to catch the spread, they will do the same thing with Trade Referral hoping price will fall against you. Will it damage their business? Only time will tell. It is disappointing given the lengths they went to to send survey questionnaires to all their customers. I can only think this firm is desperate and prepared to adopt any tactics whatsoever to stop traders from making money. They have certainly taken a lot of money from me by the various methods. They close down their website and go on telephone only dealing whenever volatility increases or is expected to increase. This will continue for the whole session. Do I bother to complain to them? No, I suspect it would fall on deaf ears as this outfit is ruthless. Unfortunately, they are fools because eventually they will have no clients left and go out of business. The crazy fact is they do not need to adopt such desperate tactics as most traders will lose money anyway. My strong advice to anybody thinking of opening an account with WS is do not even think about it. They don't deserve to have any clients the way they now operate. I am 100% honest and fair. What on earth is this so called broker playing at? Do they really think they can succeed with such dishonourable tactics. We will see. You have been warned. The people operating this firm should be ashamed of themselves. ps. I was shocked to see T2W advert for this dreadful "broker" and that prompted me to post, probably my first post in 5 years. I was one of the first member group in the prior websites and been in this game a long time.
If things change for the better I will be the first to come back here and post an update as I would not wish to criticise a business without justification.
Kind regards
TX
If things change for the better I will be the first to come back here and post an update as I would not wish to criticise a business without justification.
Kind regards
TX
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Many Thanks, Traderx.... Their splendid advert for "zero spread" made me feel there MUST be some serious snags. Now you have confirmed my feelings, and I need not bother trying them. I am with IGindex, and suffering from wide spreads, but at least they seem honest and I will stay put.
Is that the one with the hand making what is in many parts of the world an obscene gesture?
Conor Foley
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Dear TraderX,
May I invite you to visit our office in the City and spend some time with our Traders, monitoring how trades are handled and how the platform operates, naturally on a 'no-names' basis (to protect client confidentiality)?
I considered compiling a lengthy e-mail setting out why your e-mail is not an accurate or fair reflection of how WorldSpreads operates when dealing with its clients, but it would only result in a 'tit-for-tat' exchange of subjective perspectives. The only accurate perspective would be for you (or a nominated representative) to see it for yourself.
I would be very agreeable to you reporting your findings on this Forum; positive, negative or indifferent.
Feel free to contact me (0207 398 5100) here at WorldSpreads any time you wish if you would like to conduct this exercise.
Yours sincerely,
Conor Foley
CEO
WorldSpreads
Conor Foley
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Dear SausageKingofMexico,
I read your e-mail with interest and I would be very keen to understand what you believe to be the difference between trading FX by "Currency Trading" or by "Spread Betting". What advantages/disadvantages does one have over the other, in your view?
Yours sincerely,
Conor Foley
CEO
WorldSpreads
Compared to the other spread betting outfits out there, I see no advantage in using WorldSpreads.
It's true that you never get filled in fast markets and it is just as hard to close a trade during volatility as it will take several tries. One can only conclude that all trades are going to the dealer whenever there is volatility.
On top of that how to put up with that stupid trade window that closes in 3 minutes. Personally, I can't be bothered opening the trade window every 3 minutes. I suspect WS dont want people watching the price of an instrument non-stop hence they introduced the trade ticket that expires after 3 minutes. There is much better than them in the SB industry so I closed my account.
It's true that you never get filled in fast markets and it is just as hard to close a trade during volatility as it will take several tries. One can only conclude that all trades are going to the dealer whenever there is volatility.
On top of that how to put up with that stupid trade window that closes in 3 minutes. Personally, I can't be bothered opening the trade window every 3 minutes. I suspect WS dont want people watching the price of an instrument non-stop hence they introduced the trade ticket that expires after 3 minutes. There is much better than them in the SB industry so I closed my account.
B
Black Swan
Gotta say Conor you handle yourself well on here.
TBH next time I'm down in the smoke I wouldn't mind taking you up on that offer and reporting to the forum on my findings. PM me when you get the chance..Surely you know exactly what happens at WS and would therefore be able to give an objective perspective? One thing that could be clarified is your policy on when/how/why clients are put on dealer referral. Although the £5000 qualifying deposit seems a bit ridiculous, I'd be interested in trying 'zero spreads', but there's no point (pun not intended) if everyone who trades more than a few times a day is blacklisted.
I'd like to share my view if I may.
I am fairly new to spreadbetting (well i did start off my trading 'career' by spreadbetting 5 years ago - I think a lot of people do due to the simplicitiy that spreadbetting offers). I quickly moved onto to trading Forex and moved away from spreadbetting to more traditional forms of forex trading mainly via the MT4 platform and when my account was big enough onto a true ECN broker. I've now returned to explore spreadbetting becuase of the obvious tax advantages.
I don't think there is a huge difference between 'currency trading' and 'spreadbetting forex' (apart from a few which I'll come onto in a bit), apart form the obvious (i.e. one you are buying and selling an underlying instrument and one you are betting against the movement of an instrument) but the main difference comes from structure of the brokers to whether it is a 'dealing desk' broker or a 'no dealing desk' (NDD) broker (i.e. STP, DMA or ECN).
Spreadbetting firms by their nature are dealing desk brokers and thus market makers (there are 2 NDD + STP spreadbetting firms that I know off) and likewise there is a lot of market maker brokers (DD) in the forex trading world too, but the difference is there is also a lot of NDD brokes too.
NDD Forex brokers provide access to the interbank market without passing orders trough the dealing desk. With true No Dealing Desk brokers there are no re-quotes on orders and no additional pausing during order confirmation. NDD brokers only make money through marked up spreads (STP/DMA) or via commission (ECN). Because they are offering access to the true underlying market and not trading against their clients they only make money from the spread or commission, thus they want and need successfull clients that trade high volumes and large trades etc. in order to generate income.
DD Forex brokers / spreadbetting firms are market makers and thus all trades/bets are routed through their dealing desk and they are creating the market. When a client wants to buy they sell to them and vice versa i.e. they always take the oppsite side of the trade and create the market. Brokers with a dealing desk earn money on the spread as well as when a client loses a trade, since market makers are trading against their clients by hedging - entering in an opposite trade. essentially a market maker in the SB world is like a bookie they are creating a market and if you lose the bookie takes the money from you and vice versa if you win. It's not as simple as that as an SB firms / market maker will not always want the net exposure from their client's positions (e.g. the net EU positions) - there will be a natural hedge between all clients but there will likely be some overriding net exposure - the market maker can choose whether to hedge this exposure in the underlying market or take on the risk themselves. Each firm will have different policies and different internal risk tolerances (hedging does cost the firm money remember). If you read some market makers annual reporting accounts that will give you an insight under what conditions they make the most money. But make no mistsake makret makers do make money if their clients lose over the long term (unless they hedge 100% off their exposure!).
Thus in my opnion if I had the choice between an NDD broker or a DD broker I would always choose an NDD broker - why, because of the following:
1. Transparency - you are betting/trading on the true underlying market rather than an artificial market
2. Speed of exeuction -you are ALWAYS going to get on average faster and more relaible execution dealing with the underlying market in liquid instruments that you will through a market maker when you have to go through a dealing desk - this is especially true in very fast movng markets. Remember a market maker is creating the market - of course it will reflect the underlying market (they will be overly exposed to arbitrage otherwise) but it is up to them to decide whether they want to accept a series of bets at a certain price or not (within the relevant regulatory rules of course).
3. Lower trading costs - market makers will have on average higher average spreads (the single biggest cost of trading/betting) across a range of instruments compared to a NDD broker - this is especially true with spreadbetting firms (I'm talking about Forex) who have relatively high spreads compared to a like-for-like market maker in the forex trading world (I guess this is because of the tax free nature of SB)
As I see it spreadbetting has the following main advantages:
1. Ease of use and simplicitiy - spreadbetting for a beginner is the obvious way to learn more about 'trading'. Betting £x per point is much more simple than trading in lots, the platforms are very easy to use and run.
2. size of bets - for the beginner you can get 10p per pip bets for example.
3.tax - gambling is tax free under most circumstances in the UK whereas in forex trading you would be liable for CGT or income tax depending on your circumstances.
4. fixed spreads (usually)
5. wide range of instruments
However, from my own research I think the tax advantage is overhyped. As I've mentioned the single biggest cost for me of my business is the spread cost. I compared 5 spreadbetting firms spreads across a range of 10 FX pairs (liquid ones) compared to an ECN broker and an STP broker and I found that unless you are betting over a longer time frame (i.e. days) then the increased cost of spreads outweighs the tax free advantage at the higher tax band level.I don't scalp, I trade over the 1hr and 4hr timeframes so my average winners range form 20pips to 150 pips and for this level there is negligible advantage using a spreadbetting firm which is a market maker from my stats.
I do believe an SB firm is the way to go for beginners an certainly has it's place and uses but for serious intra-day traders I have my doubts as to whether SB is the way to go (unless you use a NDD broker offering spreadbetting - this is maybe the future for spreadbetting to attrach the serious FX trader?) , but then I think SB by it's nature is designed for beginners / newbies anyway
With regards Worldspreads zero spread offer...the way I see it a method of obtaining a good influx of new clients (spreadbetting seems a very competitive industry from what I've seen with so many providers). The business plan behind it presumably is that these clients will also bet on other instruments that do have spreads as well as the zero spread instruments so they wil still make anet profit from these new clients. What could concern me would be what if a client only bet on the pairs with zero spreads? Would you want client's like that, presumably not? For example you would expect an experienced forex trader, would have accounts with a few SB firms and use the SB firm that has the best spreads for the pairs they wish to trade at that moment in time (why would they not...it's a direct fixed cost of the trade). What if their other brokers always had better spreads on the non-zero spread pairs and thus they only wanted to use WS for the zero spread pairs...I would have thought you would eventually turn clients like this away?
Just my views from my limited knowledge and understanding.
I guess they want to control how many clients utulise their zero spreads offers and the size of bets that are placed hence the reason for the minimum balance. There is obviuosly an underlying business reason as to why they have set it at that level.
I know someone who is spreadbetting with them and their zero spreads and they have had no problems so far.
It certainly would be a poor business and reputational decision if they 'blacklisted' all clients who were trading succesfully / utilising the freee spreads a few times per day ...
Sorry to say I too have had a bad experience with Worldspreads zero point spreads. I was switched onto dealer referral for every trade and then to a 1 point spread. I have now left them. My presumption, and that is all it is, is that unless you are trading other instruments, with a wider spread, they are not really that interested in having you as a client. This is perhaps understandable but still disappointing from all the advertising and promotion they are doing.
Drawing clients in using something that isn't actually available seems like misrepresentation to me.
