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igindex.co.uk

 

And I've checked the overnight spot silver charts and the price didn't drop below $18.05 until nearly 8am BST this morning when it hit $18.043.

 

I'd have a word with your current provider. They *may* compensate you. I saw issues once with the feed from Cantor Index which they fixed. The price of a currency pair went to something like 100x what it should be ... but they fixed it.

 

Let me clarify this once and for all.

 

Spread betting outfits are just modern age bucket shops.

 

There is no trade entered on any market anywhere when you place a bet with them.

 

They are out there to rip you off.

 

http://en.wikipedia.org/wiki/Bucket_shop_%28stock_market%29

 

ONLY SUCKERS SPREAD BET

 

 

 

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I decided to stop posting after that 1.62 Euro thread incident, but I feel for you on this one so I'll come out of retirement.

 

I can't speak for IG (although I know a lot of people there) but if that happened with us it would have been a price feed error. We would have corrected and reinstated the original trade automatically. This sort of thing can cut both ways, as sometimes the error is up and a Take Profit triggers. (In those instances clients are always irate that the trade is being reversed.)

 

You ought to confirm with IG what happened. As a matter of customer service they should sort you out. If it gets nasty have a look at their terms and conditions in the Manifest Errors section and any other place they talk about price feeds and see what you find.

 

Coincidently, I am revising the spread terms and conditions for my old company as we speak and I am really strengthening up these very provisions because these errors do happen and I am tired of dealing with clients who think they should get a windfall when the mistake is on the upside. But we are fair about it and make it so it cuts both ways obviously.

 

As an aside, in the industry "guaranteed" stops are a bolt on feature. You pay for a premium for those so that if there is a Sept 11 sort of market gap you aren't holding the bag where the market resumes---you get the (standard) stop loss you would have had in an incrementally downward market.

 

Most spread systems I think make you put in a stop loss so that your margin can be calculated. If you want to avoid stop losses try buying CFDs instead of spread bets as a lot of CFD clients hate stops and get around having to set them in place. If you are subject to UK tax and want the "bet" tax free treatment then you should ask for their "rolling cash" product...it's a CFD designed as a spread.

 

Search my posts on here for more info, I talked at length about how spreads work legally and such a few months ago.

 

 

 

 

 

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Spread betting outfits are just modern age bucket shops.

 

For any EU based company to get a license to trade they have to have a pretty large balance sheet since they are a securities ISSUER. This amount used to be fixed but post MiFID last year, it's more or less negotiated with the regulator like the FSA.

 

Compare: Pre-MiFID a traditional agency-broker needed about 1/3 the balance sheet of a CFD/spread house. So a lot more room to be bucket-shoppy. Just check out the bankruptcy of Pacific Continental Securities.

 

There is no trade entered on any market anywhere when you place a bet with them.

That depends largely on the size of your trade and who the company is. CMC - you are pretty much correct Cgnao; they hedge nothing on the market.

 

By contrast my old company used to market hedge all CFD trades and all but the smallest spread bets since it was uneconomical to do so.

 

I remember once helping the SEC in a joint investigation with the FSA as these things are almost non existent in the USA. The SEC was quite shocked to find that there could be a big stake put on a USA issuer that the SEC would never know about.

 

ONLY SUCKERS SPREAD BET

I've never done it myself and if you let someone make your odds then you are all the more correct. This odds-making race track approach is supposed to have been done away with post MiFID as everyone is required to give "Best Execution". But no one actually agrees as to what BE means! That said, if you shop around you can get quite competitive rates. On CFDs we used to give as low as 5 bps (one fifth of one percent) above/below the trading floor price.

 

If you are a really good customer you can also get Direct Market Access where you effectively place the company's hedge on the underlying exchange, they then cut a CFD for you at a pre agreed +/- bps on the exchange trading floor price you got.

 

 

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Let me clarify this once and for all.

 

Spread betting outfits are just modern age bucket shops.

 

There is no trade entered on any market anywhere when you place a bet with them.

 

They are out there to rip you off.

 

http://en.wikipedia.org/wiki/Bucket_shop_%28stock_market%29

 

ONLY SUCKERS SPREAD BET

 

OK, let me play devil's advocate for a minute. If I understand correctly, you're effectively saying that SB firms are just bookies by another name and punters are betting directly against the house.

 

What does that matter, if one handles one bets with due caution? I've read Frizzer's 2006 account of his travails with IG Index with interest (http://www.greenenergyinvestors.com/index....post&p=1416) , and it seems to me a major contributor to his losses, apart from the undoubted serious problems he experienced placing his trade both online and over the phone was the lack of a stop loss on his position. IG and others do offer guaranteed stop losses which are effective regardless of a gap down in the market.

 

I wouldn't be an advocate of spread betting on a short term basis to scalp points in a fast moving market, but I see no reason why they can't be used to take medium to long term positions (weeks and months). This is what people like Mark Shipman and David Fuller do. Are they suckers?

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This is what people like Mark Shipman and David Fuller do. Are they suckers?

 

this is the question of mind. people blame tools instead of their thinking. Imagine you have a chain saw in your hands. you can kill a person with it, and you can cut a tree. Who is reponsible? If the system is corrupt, you have to switch the system (i.e change the chain saw), but doing spread betting is the same as trading on other systems. you buy gold contract at 1040 and then it goes to 910, you lost, no spread .... its the question of how you think

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http://en.wikipedia.org/wiki/Bucket_shop_%28stock_market%29

 

The highly leveraged use of margins theoretically gave the speculators equally large upside potential. However, if a bucket shop held a large position on a stock, it might sell the stock on the real stock exchange, causing the price on the ticker tape to momentarily move down enough to wipe out its clients margins, and the bucket shop could take 100% of their investments.

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http://en.wikipedia.org/wiki/Bucket_shop_%28stock_market%29

 

The highly leveraged use of margins theoretically gave the speculators equally large upside potential. However, if a bucket shop held a large position on a stock, it might sell the stock on the real stock exchange, causing the price on the ticker tape to momentarily move down enough to wipe out its clients margins, and the bucket shop could take 100% of their investments.

 

Are you suggesting that modern SB firms control enough of the market to produce such movements in major indices like the S&P or FTSE, or commodities like oil or gold?

 

PS, coming back to the topic, silver's doing quite nicely, isn't it?

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Are you suggesting that modern SB firms control enough of the market to produce such movements in major indices like the S&P or FTSE, or commodities like oil or gold?

 

They don't need to.

 

what the heck hapened here, can somebody tell me? they took my silver at 17.79, had a stop at that price

 

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http://en.wikipedia.org/wiki/Bucket_shop_%28stock_market%29

 

The highly leveraged use of margins theoretically gave the speculators equally large upside potential. However, if a bucket shop held a large position on a stock, it might sell the stock on the real stock exchange, causing the price on the ticker tape to momentarily move down enough to wipe out its clients margins, and the bucket shop could take 100% of their investments.

 

 

definitely GCItrading.com is spread betting. Their margins requierements of 100:1 are not possible in a real system. Im gonna switch to this one, they have more realistic margins and rules: http://activtrades.com/index.aspx?page=cfds_margins

"

#

 

If during an open trade, the net worth of the account reaches the "trade-out level" of 50% of the required margins, positions in excess would be automatically closed.

#

 

ActivTrades reserves the right to close after dealing hours any position which would incur an overnight margin call.

#

 

Since all the above products can be traded in mini- or micro-lots, margins would be calculated proportionally. If for example you trade 0.1 lot of the Ger30, only one tenth of the margin would be required."

 

more brokers:

http://www.forexpeacearmy.com/public/forex_broker_reviews/

 

 

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How do you short a stock without spreadbetting? Is there another way?

 

I’ve been using Capital Spreads to short UK housebuilders.

 

Is CFD the other way? I’m not keen on CFD because of the tax.

Knavel, I have read your suggestion on rolling cash, I will do some reading.

 

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but doing spread betting is the same as trading on other systems..

I mean "trading on a spread" when I wrote this.

to clarify the concepts:

1) spread betting: betting on price change without entering market

http://en.wikipedia.org/wiki/Spread_betting

 

2) trading on a spread: entering market on a spread without having funds to cover full cost of the financial instrument (CFD trading)

http://en.wikipedia.org/wiki/Contract_for_difference

 

 

 

 

 

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check this out, I wrote this email and they restored my position back:

 

---------- Forwarded message ----------

Date: 2008/7/2

Subject: Manipulation Report

To: info2@gcitrading.com

 

 

Hello,

yesterday at US market close, I had lost my silver position because of

manipulation on part of your company. Suddenly a drop in silver price

ocurred of 0.40 cents on one tick and my position were closed due to a

stop. This is a clear case of manipulation and robery. I had seen the

same have happened in Crude Oil instrument about 10 days ago dropping

from 138 to 132 in once tick, which means you are doing this on a

regular basis. I attach the image of this silver drop. Other trading

platforms do not register this drop. This situation can not be

tolerated. I am going to withdraw my funds from your company and

report to the authorities and also to all oil & gold trading forums if

this continues to happen. Right now I request my position to be

restored. The position ticket was 3276835.

Waiting for your reply.

Thank you very much

----------------------------------------

 

 

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check this out, I wrote this email and they restored my position back:

 

and this is their reply, a "bad tick":

 

 

---------- Forwarded message ----------

From: Dealing Desk <fxdealing@gcitrading.com>

Date: 2008/7/2

Subject: Re: Manipulation Report

 

 

 

Dear Sir

 

Many thanks for your message.

 

Thank you for reporting this bad tick to us. We will be removing it from the system shortly. In the meantime, we have rectified your account to reflect your position. Your original position has been reinstated with the stop set.

 

Please note that this price is in fact a "bad tick" and as such not tradeable. At times, the source would issue such a price. In the rare event that it does happen, any affected trade is quickly rectified. Please let us know if you have any other outstanding issues and do not hesitate to contact us if it were to happen again.

 

Once again, thank you and our apologies.

 

Regards,

Dealing Desk

---------------------------------------------

 

 

 

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i did warn people about spreadbet companies who can perphaps "inadvertantly", choose my words carefully, move prices to trigger your stop in the spreadbetting thread. They can see everyones stop for a start! A clear example there!!!

 

You really have to be on the ball with these things - or have a wider stop - but you could lose more.

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and this is their reply, a "bad tick":

 

Good result... IMO your initial complaint was a bit harsh... but clearly it did the job. :)

 

I think these days it's such big business that none of these guys could afford for anyone to go public with such obvious evidence of manipulation (or a technical error that they refused to resolve). Certainly IG Index in the UK is now a household name .... To be fair, they make no claims to actually enter your trades in the underlying market.

 

I personally like to think I've stung them (IG Index and Cantor Index) for a hell of a lot of cash. I started out trading very well (when they tend not to take out underlying positions) and made some huge paper profits. At this point I believe they would've start taking out positions based on my trades - but my trading took a turn for the worse and I promptly lost the lot!

If they *were* hedging my positions in the underlying markets after my initial success, I stiffed them royally. :)

 

 

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I find it bizarre, that a winning streak HAS TO END at some point. Its like some sort of godly force out there.

 

Trading on margin - for the pros only or for people who have supernatural powers.

I think it's simple human nature. You start doing well, so load up a bit more... then a bit more. Then things go against you so you add more in the opposite direction... and then you realise you've blown it.

 

As an example, I took GBP/JPY down from 230ish to 198 (and various other instruments) and lost all I'd made in the move back to 211. I believe it's known as an "inverted triangle/pyramid" in trading terms - you should never add to a position more than you started with.

 

I now view what I went through as an excellent learning process. I'm far more cautious and controlled and am not being greedy. Yes, on occasion I've taken profits and in hindsight it was the wrong thing to do, but being out of the market means you're NOT going to lose and have locked in whatever gains you've made.* ... The trick is then not to think "oh, I shouldn't have done that" and pile back in at a worse position risking more.

 

(* the obvious case where this isn't true is in a hyperinflationary holocaust where you just closed your long gold positions... but I doubt a spreadbetting company would survive such events so this is kinda a moot point)

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I have a position in Hecla (HL). I'm confident long term, with the disposal of its Venezuelan asset removing the political risk and the acquisition of one of Rio Tinto's silver mines earlier in the year increasing future production.

 

The debt required to buy the new mine leaves it more leveraged to ups and downs of the silver price. However, recently it's been extremely volatile, hitting 52 week lows and rocketing 25-30% in the space of a few days later. This can probably be partly explained by the short interest in the stock. But today it was down 10% when silver was up. Why the increased volatility? It swings much more than other stocks such as PAAS.

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I think it's simple human nature. You start doing well, so load up a bit more... then a bit more. Then things go against you so you add more in the opposite direction... and then you realise you've blown it.

 

As an example, I took GBP/JPY down from 230ish to 198 (and various other instruments) and lost all I'd made in the move back to 211. I believe it's known as an "inverted triangle/pyramid" in trading terms - you should never add to a position more than you started with.

 

I now view what I went through as an excellent learning process. I'm far more cautious and controlled and am not being greedy. Yes, on occasion I've taken profits and in hindsight it was the wrong thing to do, but being out of the market means you're NOT going to lose and have locked in whatever gains you've made.* ... The trick is then not to think "oh, I shouldn't have done that" and pile back in at a worse position risking more.

 

(* the obvious case where this isn't true is in a hyperinflationary holocaust where you just closed your long gold positions... but I doubt a spreadbetting company would survive such events so this is kinda a moot point)

 

Your story is very similar to mine (including Post #52). I was left with enough money for 2 trades after being too greedy. I’ve slowly managed to make my money back.

 

Thankfully, I’m spreadbetting with what I can afford to loose and I have learned a very important lesson.

 

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I really would advise against spread betting for long-term positions.

 

Please remember that in the UK gambling debts are not legally enforceable so there is a good chance in an extreme event any gains you make you could lose if the the firm or its systems fail in any way.

 

Precious Metals will be extremely volatile and I make sure that all my core positions are 100% unleveraged and 100% owned. If you want to take a long term view buy the shares / metal / whatever it is directly and then you know you own what you own.

 

For lower-risk leveraged short term trade options or double-long/short ETFs would be preferable in my view.

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Please remember that in the UK gambling debts are not legally enforceable so there is a good chance in an extreme event any gains you make you could lose if the the firm or its systems fail in any way.

 

False. Spread betting is a financial service regulated by the Financial Services Authority--it has been specifically removed from gambling laws per the Financial Services and Markets Act 2000. Spread bettings is as enforceable as any contract.

 

If the firm fails, you will have standing as a creditor in bankruptcy should you have funds with the firm. See my other historical posts on the advantages of ensuring you are a segregated funds client in anticipation of exactly this circumstance.

 

If the systems fail, we've already seen that Ker got his trade reinstated, and even when s/he took a wholly agressive, inappropriate approach to lodging his complaint.

 

 

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False. Spread betting is a financial service regulated by the Financial Services Authority--it has been specifically removed from gambling laws per the Financial Services and Markets Act 2000. Spread bettings is as enforceable as any contract.

 

If the firm fails, you will have standing as a creditor in bankruptcy should you have funds with the firm. See my other historical posts on the advantages of ensuring you are a segregated funds client in anticipation of exactly this circumstance.

 

If the systems fail, we've already seen that Ker got his trade reinstated, and even when s/he took a wholly agressive, inappropriate approach to lodging his complaint.

 

He took completely the right approach, if he had sat and done nothing he would have been rewarded with exactly ....nothing.

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I think it's simple human nature. You start doing well, so load up a bit more... then a bit more. Then things go against you so you add more in the opposite direction... and then you realise you've blown it.

 

As an example, I took GBP/JPY down from 230ish to 198 (and various other instruments) and lost all I'd made in the move back to 211. I believe it's known as an "inverted triangle/pyramid" in trading terms - you should never add to a position more than you started with.

 

I now view what I went through as an excellent learning process. I'm far more cautious and controlled and am not being greedy. Yes, on occasion I've taken profits and in hindsight it was the wrong thing to do, but being out of the market means you're NOT going to lose and have locked in whatever gains you've made.* ... The trick is then not to think "oh, I shouldn't have done that" and pile back in at a worse position risking more.

 

(* the obvious case where this isn't true is in a hyperinflationary holocaust where you just closed your long gold positions... but I doubt a spreadbetting company would survive such events so this is kinda a moot point)

Here, here. Bobsta knows my story; not disimilar to his own. Suffice to say I've "learned a lot" as well. Onwards and upwards !

 

I really would advise against spread betting for long-term positions.

I think long term is difficult with SB. Certainly gold and silver are fairly limited to about 3 months out, currencies 6 months and indices/stocks max one year. I'd regard these all as short to medium term. I ade a point of checking out IG's balance sheet as well before using them and they look pretty safe to me (low debt / good cash flow), and given 85% of the clients lose (IMO through lack of knowledge/research/naivety) I think there safe over those timeframes.

 

 

 

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