Spread betting - some issues

Heres a few questions for you spread betting gurus out there. I have a demo account. I have a fair idea of the pros and cons. Just a few specific questions
i. Between deltaindex, tradefair and paddypowertrader who do you find gives the best value.
ii. Of the 3 which is the best for commodities. Tradefair seem to offer more on commodities.
ii. When you put a stop loss on, the rules say they may not be able to close your position at that price. Has anyone been caught by this. I mean supposing you put a E5 spread on US/Euro exchange rate they can move very quickly - every .0001 per dollar move, thats .01 of a cent, is 5 euro gain or loss. Can it happen that a lot of movement occurs before they can close out the position and why does this happen. I presume its where there is a sudden drop and you cant find a buyer on the other end (in the paralllel options market) to buy till you hit a very low price.
iv. Does the price movement for shares quote on spreadbetting indices following the share price faithfully or is it a market unto itself ie. you could have a movement in share price but no movement in the index. Also if a good dividend is declared does this move the index price up.

Hope someone can answer these. I might even find a genius out there who I can ask more stuff from!

Vortex, the answer to your first two questions can really only come from someone with experience of all three. I signed up to Delta coz it looks okay, but maybe one of the others is better still. There is also Worldspreads which keyboard (aka qwertyuiop) favours because of its introductory bonus.

On the third question, the risk is "gapping" i.e. when the market jumps below your stop loss and you lose more than you were prepared to. See the point is the spreadbetting firm is only matching you to the market, if the market dives below the stop loss price, hard cheese.

My training session suggested this only happened 3% of times.

There is a concept of guaranteed stop loss, Delta don't provide it, but I guess where it is available it comes at a price.

Sorry can't be of more help, I'm new to the game.

"On the third question, the risk is "gapping" i.e. when the market jumps below your stop loss and you lose more than you were prepared to. See the point is the spreadbetting firm is only matching you to the market, if the market dives below the stop loss price, hard cheese."

Ok. But I presume they will close out at the nearest price to the stop loss they can.

vortex said:

"On the third question, the risk is "gapping" i.e. when the market jumps below your stop loss and you lose more than you were prepared to. See the point is the spreadbetting firm is only matching you to the market, if the market dives below the stop loss price, hard cheese."

Ok. But I presume they will close out at the nearest price to the stop loss they can.

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yep

i. Between deltaindex, tradefair and paddypowertrader who do you find gives the best value.

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If the difference between the spreads for different companies is a few points, few cents, and you are expecting to hold your position for a gain of say 10% then the difference is unimportant. If you are trying to scrape a few points here and there then the difference is more important. Depends on your style.

ii. When you put a stop loss on, the rules say they may not be able to close your position at that price. Has anyone been caught by this. I mean supposing you put a E5 spread on US/Euro exchange rate they can move very quickly - every .0001 per dollar move, thats .01 of a cent, is 5 euro gain or loss. Can it happen that a lot of movement occurs before they can close out the position and why does this happen. I presume its where there is a sudden drop and you cant find a buyer on the other end (in the paralllel options market) to buy till you hit a very low price.
iv. Does the price movement for shares quote on spreadbetting indices following the share price faithfully or is it a market unto itself ie. you could have a movement in share price but no movement in the index. Also if a good dividend is declared does this move the index price up.

Click to expand...

I see it go below the stop 99% of the time using IG Index(usually a tiny amount) and 0% using DeltaIndex. As Harchibald said Delta dont have guaranteed stops but IG Index do - at a price. But with IG I have also seen the price go below the stop and back up again and NOT stop me out.

For certain commodities, there are tighter spreads with PPT eg platinum. IG have a tighter spread on natural gas...i.e. it's difficult to say which is better value because it varies from bet to bet.
One thing I don't like about IG is the spread is variable and so you may have to monitor it for a while to get the best price. Also as croker said, their stop-loss execution is not perfect, which can be alarming at times.
I have an account with them as they have markets that PPT don't, yet oddly don't have any of the grains traded on the chicago board of trade, but these are available these at PPT.

Overall, the good days have outweighed the bad but I wouldn't call it easy money by any stretch of the imagination. Still the outlook for commodities looks good and god knows equities are doing buggar all at the minute.