Spread betting company feedback

Isoaxe

Hi guys, just wondering if anyone has had any experience with the following spread betting companies?

- Delta Index
- City Index
- CMC Markets

I'm looking for feedback on large spread betting companies that cater for Irish clients, with a preference for accounts denominated in euros. The companies have to be well capitalised to minimise counterparty risk and cater to a large range of equities, commodities and currencies. If you've had experience with a company not listed above that meets these criteria that you found to be good, please tell me about it.

Thanks in advance,

Isoaxe

neil.p.b

I'm with IG Index and find them good. You also get a free use of the pro real time charting system if you trade more than twice per month.

Isoaxe

neil.p.b wrote: »

I'm with IG Index and find them good. You also get a free use of the pro real time charting system if you trade more than twice per month.

Great, thanks for the reply. I'll check them out.

gizmo555

Like Neil, I find IG good. I've no experience with City Index or Delta Index, but had an account with CMC Markets which I gave up on relatively quickly. The reasons were:

(1) The dealing platform was awful, to the point of being actively "user hostile".

(2) I always use guaranteed stops. With an ordinary stop, you may end up having your position closed at a level well below your stop, if the market gaps. For a small extra premium on the spread, some firms will guarantee your stop level - a very worthwhile feature in present market conditions!

While CMC offered guaranteed stops, they had serious disadvantages compared to IG's. You couldn't amend the stop level on an open position - the only way to change it was to close the position and re-open it with a new stop level, incurring the spread again and risking the market moving against you between closing and re-opening. With IG you can, at their discretion, alter the level of a guaranteed stop. In practice, I've never been prevented by IG from raising a stop whenever I wanted.

You also couldn't automatically roll over from one contract period to the next with CMC's guaranteed stops - you had to do it manually, and incur the full spread, again risking the market moving against you in the process. With IG you can have a position roll automatically and the spread is reduced, normally about 60% of the full spread on a new position.

(3) I experienced many re-quotes with CMC when opening or closing positions and the revised quote never seemed to favour me.

It's over a year since I last used CMC, so they may have addressed some or all of these problems.

Isoaxe

Thanks for the info, I'll keep that in mind. I have been testing CMC Markets, Delta Index and City Index demos today. The last two seem really rudimentary and to be honest, crap. I was actually quite impressed by the CMC Markets platform, but from what I have read on other forums/review sites there has been a lot of problems with them. For one thing there seems to be significant differences between the demo and the real thing, for example re-quotes and delayed charts.

I'll give the IG Index demo a go for sure, first thing Monday!

Isoaxe

One other thing, what is the cost of a guaranteed stop with CMC Markets and IG Index?

gizmo555

Isoaxe wrote: »

One other thing, what is the cost of a guaranteed stop with CMC Markets and IG Index?

Varies depending on the market, but with IG on the FTSE100, for example, it's an extra two points on the spread. I tend to run my positions for weeks or months at a time, so in the scheme of things it adds relatively little cost. If you were trading more frequently it could add up though.

Isoaxe

Unfortunately there's no demo for IG Index, which is a pity. I looked at all of their videos though, and the platform looks good.

The main problem with them is that there is a lot of restrictions on shorting, which is a crucial feature for me.

My strategy entails holding positions for longer periods of time too, so the premium for a guaranteed stop is one well worth paying, especially for equities where a huge gap can occur in the event of groundbreaking news.

Did anybody have any problems with CMC Markets not honoring a guaranteed stop? I doubt it since this would be a major issue, but I think it's worth asking just to be safe.

gizmo555 wrote: »

You also couldn't automatically roll over from one contract period to the next with CMC's guaranteed stops - you had to do it manually, and incur the full spread, again risking the market moving against you in the process. With IG you can have a position roll automatically and the spread is reduced, normally about 60% of the full spread on a new position.

Gizmo, one penultimate thing to clarify about what you said in the above quoted text. When you say that you can't automatically roll over with CMC's guaranteed stops, do you mean that the stop and the position are both closed, or the stop alone? I assume you mean the latter - this could be very dangerous if the position moves against you with no stop in place and you're not near a computer.

Finally, what are the overnight financing charges with CMC? IG Index charge LIBOR +/- 2.5% as far as I can see in their example, but I'll phone them to clarify that it's the same for all instruments on Monday.

gizmo555

Isoaxe wrote: »

Gizmo, one penultimate thing to clarify about what you said in the above quoted text. When you say that you can't automatically roll over with CMC's guaranteed stops, do you mean that the stop and the position are both closed, or the stop alone? I assume you mean the latter - this could be very dangerous if the position moves against you with no stop in place and you're not near a computer.

No, I meant that with CMC, if you had an expiring position with a guaranteed stop it would automatically close the position on expiry. With an ordinary stop you could choose to have open positions roll over automatically to the next contract period - this option was unavailable for guaranteed stops.

Isoaxe

Something I happened across on a popular spread betting information website stated that you are exposed to currency risk when trading non-euro denominated instruments with a euro denominated account using IG Index.

It says 'On the other hand with a company like IG Index you can still have your account in Euros and trade stocks in countries which have the Euro (Ireland, Germany...etc) in Euros but you can't do that for others like UK and American stocks. What happens is they take the deposit you need for the trade and convert it into pounds or dollars and therefore this exposes you to currency fluctuations.'

I would assume this is dated or just false information. Does anyone with an account with them know?

gizmo555

Isoaxe wrote: »

Something I happened across on a popular spread betting information website stated that you are exposed to currency risk when trading non-euro denominated instruments with a euro denominated account using IG Index.

It says 'On the other hand with a company like IG Index you can still have your account in Euros and trade stocks in countries which have the Euro (Ireland, Germany...etc) in Euros but you can't do that for others like UK and American stocks. What happens is they take the deposit you need for the trade and convert it into pounds or dollars and therefore this exposes you to currency fluctuations.'

I would assume this is dated or just false information. Does anyone with an account with them know?

No, the information is accurate enough. Even if you have a euro-denominated account, the majority of markets IG quote on are unavailable in Euros.

Obviously, any quotes where the underlying market is denominated in Euros, say Eurozone shares or stock indices, can be bet on in Euros.

Also, a limited number of major markets, such as the main UK & US indices and some of the precious metals can be bet on in Euros. For the rest, in the main, you can choose to bet in GBP or USD.

This isn't as big a currency risk as it might seem though. Say, for example, you have a bet on the Indian Nifty 50, now at about 5,200. Let's say you bet £1/point, with a stop 10% below the current market level, so you're risking £520. In effect, you have a £5,200 position, but you're only subject to currency risk on the £520 deposit.

Isoaxe

From what I understand, most spread betting companies operate differently to this. Say as in your example the nifty fifty is at 5,200 and you have a euro-denominated account. You put a bet on for €1/point. The index advances to 5,500 and you close the position. Your gain will then be €300 irrespective of whether the rupee appreciates or depreciates versus the euro between the time you buy and the time you sell. It strikes me as odd that IG Index would operate differently.

gizmo555

Yes, most do operate this way. IG itself does too - only in GBP not EUR. I don't know why IG doesn't offer Euro-denominated bets on more markets.

At a guess, I imagine IG as the longest established UK spread betting firm, is dominant in that country and as such doesn't feel the need to tailor its products to get extra business in Ireland or other Eurozone countries.

Isoaxe

Ah right, that makes sense! I had misunderstood you initially, thinking that you meant the currency risk between the 'underlying' and the euro- such as the rupee in the rupee-euro example when you actually said USD/EUR and GBP/EUR risk.

Despite what you said, I have to say I'm leaning towards CMC at the moment. The restrictions on shorting with IG are the dealbreaker, as I said before that's central to my strategy. Although CMC seem to have some unsavoury business practices, all spread betting companies seem to be flamed in reviews I've been reading. There's even some disaffected guy who started a dedicated website for IG Index. Since my positions are generally held for longer time periods, most of the valid complaints people made, although serious, don't really affect me.

fando

What are the shorting restrictions on IG if I may ask?

Isoaxe

There doesn't seem to be any rhyme or reason to which ones are chosen, and I didn't phone them up to ask. There's an exhaustive list here.

JoeCat

Hi, Isoaxe,

I was wondering if you finally tried one of them? If so which one and what is your opinion?

I am currently testing Delta Index and I find it quite good.

If you opened an account with a UK based spread betting company, do you know what do you exactly need being resident in Ireland?

keithm1

I'd love to know what yous are on about

Isoaxe

JoeCat wrote: »

Hi, Isoaxe,

I was wondering if you finally tried one of them? If so which one and what is your opinion?

I am currently testing Delta Index and I find it quite good.

If you opened an account with a UK based spread betting company, do you know what do you exactly need being resident in Ireland?

Yeah, have opened an account with CMC Markets and am finding them quite good at the moment. I had opened a demo with all of them before I chose though. Customer service is good, and pricing is fairly transparent.

However, there was a suspiciously large gap in a long position I had held with gold. A stop loss had been set up at a certain point, and as the price fell I was stopped out at a point $7.16 below the specified level. Gapping does occur, but during trading in a hyper-liquid market that kind of jump seems excessive. It was the only time something like this occurred, all other times stop loss orders were executed within 1¢ of the target.

I had an account with FXCM which I recently closed, due to very restricted range of tradable instruments and dedicated windows-based software to run it (I have a mac). They have a very rudimentary platform and I find the CMC web-based approach much better- you can run it off any capable computer without any prior installation.

FXCM is a US-based company, but have a UK subsidiary through which they take Irish clients. So to answer your question, I think you just need the standard stuff to open an account- passport/drivers licence, bank statement, utility bill.

podman24

Hi,

I have been spread trading at a very low level for a few years now on and off.
I wonder is there any spread traders out there interested in forming an online group? I feel this may be more beneficial than these "trading courses".
The purpose would be to a) discuss strategies, b) share data mining information, c) analyse bad streaks and help correct, d) maintain discipline and any other beneficial topics.

Anyone interested please post.

s.costello16

Hi I am currently studying a Masters of Accounting and for my thesis topic I am doing Spread Betting. I was hoping you could fill out this short questionaire in relation to this topic. It will only take 2-3 minutes. ThanK you in advance. Link is below!

https://www.surveymonkey.com/s/WZGTQCT