FSB: Could you briefly walk us through BetsForTraders' offering? How does the dealing platform work? Which markets do you cover?
Joe: The dealing platform facilitates our primary agenda: total control for the client. When we set out to write the code we knew that it had to be something special to compete in the crowded marketplace; something completely new. This gave rise to the 'slidey bar' concept that the system is based on.
I will explain it by way of a simple example:
Take the Binary Bet. It pays out a fixed sum if the market goes your way and you lose the stake if you're wrong. The interface essentially asks the following questions:
The trader then answers these each question by sliding a little arrow along a scale; as they do so, they are shown the price of the bet in real time. Prices update in real time both as the market moves and as the little arrow is moved by the client. The pricing is completely transparent so you can see how much effect moving each parameter will have on the bet's cost.
For example, if I think that the market will rise by 5 points in the next 15 minutes, I will pay more for the bet than if I think it will move by 7 points. The BetsForTraders dealing interface lets you optimise your bet price using this system.
Once you've got the perfect bet set up on the screen, simply click 'Trade Now' and you are filled instantly. Then you can watch the real time value of your bet change as the market fluctuates.
The system rests on a vast database and clients are able to improve their skills by viewing every bet they have ever made in their History Report as well as monitoring their open bets in real time.
There is so much more to the platform but I think the best way to get a feel for it is just to have a look. People understand the power of it within a couple of minutes.
We offer bets on all the main forex crosses including GBP/USD, EUR/USD, USD/JPY and a few Scandinavian currency pairs. We also have a lot of stock indices including the UK 100 index, Dax, the US indices and even the Korean Kospi and Bombay indices. Recently, we launched a range of UK and US single stock bets - these are quite popular as well. This is just the beginning though, we have a lot more coming soon including Oil, Gold, interest rates and something completely new. We invite clients to suggest new markets as we are always keen to respond to demand.
FSB: Who is holding my money and how safe is it?
Joe: All client funds are held in a segregated account at Barclays Bank in accordance with the applicable laws and regulations to which the company is subject. Because Trinitas Capital are behind BetsForTraders, clients can rest assured that their money is in safe hands.
FSB: Do you accept international clients? In which base currencies can clients trade?
Joe: We are rolling out the product globally, a few countries at a time. This enables us to moderate our growth rate and ensure that clients get the best service available. Currently we offer bets to clients in the UK only but anyone from outside the UK who is reading this after late June 2007 should come to the site. The international roll-out will start then.
Clients can currently trade in Sterling, Euros and US Dollars. We will continue to add other new currencies if there is demand from our clients.
FSB: What is the procedure for opening an account? How much do I need? Is there a minimum/maximum deposit? What are the minimum/maximum trade sizes?
Joe: To open an account, you just click on the link on the home page and fill out a short online form. Give us the usual details and your account is open - it is not in your interest or ours to make the process arduous so we keep it simple.
We accept deposits from as small as £50. It's not cost-efficient to process smaller payments and our average client deposits far more than that anyway.
The minimum win amount is just £25. If you take odds of 10-1, for example, then you could bet for as little as £2.50.
We want to make the platform accessible to the broadest range of people possible. You don't need George Soros' bank balance to trade at BetsForTraders but we would be only too happy if you ended up with it!
FSB: Is it possible to set a stop-loss?
Joe: This is an interesting area which several people have asked us about. Since the question has come up many times over the past few weeks we are adding the feature soon. Our developers are working on it as we speak.
FSB: How do your odds compare? It is my understanding that flicking between, say, a three-day One-Touch and No-Touch on EUR-USD, for instance, will show us the spread and thereby the commission charged right?
Joe: Our odds are usually very tight - a fact that we are proud of. The last thing that a fast growing company like ours wants to do is put clients off with poor odds. We thrive on volume and good odds induce it.
Our bets are priced to factor in such things as large news events, for instance, interest rate announcements and the release of non-farm payroll. This means that the odds in some markets are squeezed a bit around large economic news announcements as everyone piles in.
Our hedging department gets the best liquidity on the longer term bets so you will find relatively better odds for multi-day bets relative to intra-day ones. As your readers will see when they visit the site, the odds at BetsforTraders are among the best out there. Don't take my word for it though - see what you think.
FSB: Can you sell the bets before expiry?
Joe: Yes, we have introduced a new facility allowing clients to sell back binaries, one-touches and no-touches ahead of the expiry dates. This enables people to take profits early or limit losses to less than the stake.
FSB: Do you offer intra-day bets? What is the minimum and maximum bet lifetime?
Joe: The Trend Multiplier bets can be made for as little as 10 minutes, the Binarys as little as 15 minutes and the Time-Switch bets can go out several months. Most of the bet types have a maximum expiry of 30 market days which is about 6 weeks once you knock off weekends.
FSB: How do the 'Time Switch' and 'Lookback' bets work? Can you give us examples?
Joe: These are really new and unique bet types. Clients love them and one or two of our competitors appear somewhat perturbed by their launch.
They are not as simple as the classic One Touch and Binary bets but they are by far the most exciting innovation to have come out of the industry for years. Obviously I like them but I think that your readers will feel the same when they understand them.
The idea was to offer bets with a reduced risk of losing the stake; here is how we went about engineering them:
In addressing the problem of clients losing their stake, we decided that the new bet types should lock in a proportion of the profits during the life of the bet. This way the client makes money even if they are only partially right but still can't lose more than their stake.
The Time Switch bet is a bit like a Binary Bet but it pays out a fixed amount for every time interval that the market is above (for a bet on the market rising) or below (for a bet on it falling) the strike price. The client sets the payout amount per interval and the length of each interval.
We have an example in the help section on the site.
FSB: And the Trend Multiplier?
Joe: This is a popular high risk/reward bet. It is pretty simple. On the dealing interface, you pick a market, for example the Bombay stock index, then you pick a direction that you think the market will go in. Next, you pick a time interval and a number of time intervals.
So, today, a client placed a bet paying $500 if the Bombay index was higher at the end of each of the next six 10 minute intervals than it was at the end of the preceeding interval.
As the market must continue trending in order that the bet is won, this is pretty high-risk stuff. Accordingly, it pays out 20 times the stake if you win - the client in question staked just $25. He did this several times. I think he lost the first three but then cleaned up when he won one.
Of all the bets we offer, this is about the highest risk end of things; most clients are a little more conservative. The very aggressive traders sometimes land some pretty big profits though.
FSB: You essentially provide instant execution on purely maths-based models. Please provide us with some insight of your pricing engine. Do you use the Black Scholes/ Monte Carlo models to price bets?
Joe: All of our bets are priced using risk-neutral probability models, which means that we have no opinion as to whether the market will rise or fall. This is good for traders as they will never stake more for a bet as a function of any opinion we may have about market direction.
If you price a Binary Bet on the market rising, for example, and set the strike price equal to the market price, you will note that the odds are almost precisely the same as if you wish to bet on a fall.
The boffins who run our algorithm team are essentially academics with expertise in this kind of thing - they work full time on keeping the odds as good as possible by optimising the maths in the system.
FSB: Do you hedge the underlying clients' position in the market? It is my understanding that binary providers match risk off on both sides but this needs the volume which might be lacking on the more complicated bets. Please comment on your hedging policy.
Joe: We are fortunate to run a large book and are therefore able to match a lot of bets in the system. For every person who thinks the market will fall, there is usually someone who thinks it will rise - we just stand in the middle and make a market.
The risk models employed by our hedging team are very complex and essentially aggregate the risk accross the book into exposure coefficients. These coefficients are then monitored to ensure that we do not take on undesirable risks. Where too many clients go one way and we can't match off enough risk, we hedge in the markets. The traders who run the hedging work with the algorithm department team to keep the odds tight for clients.
FSB: Please explain how you handle re-quotes and order confirmation times. If I place an order will the price be re-quoted/rejected? Do you apply slippage?
Joe: If you see a price on the screen you can be near-certain that you will get it. So far we have a bet acceptance rate of 99.87%. We are able to do this because of the speed of our servers and robust nature of our pricing models.
It is a fact of life that clients often place bets and then the value goes up a lot within a few seconds. We see slippage on both sides of the book and it is normally distributed so it doesn't worry us.
FSB: What is your policy on arbers? It is my understanding that if the same company lets you buy and sell at an arb they would clearly lose but if this is done with different bookies, they each get volume at the prices they quoted and are not being arbed because they're different companies. Please comment.
Joe: You're spot on, Guido. Obviously there is no 'free lunch' and our system cannot be arbed but if you can run an arb on our prices versus those of another bookie, good luck to you! It doesn't cost us anything. I keep an eye on the competition's prices and do spot them quite often. All we care about is that we get flow through the book - whatever your agenda, you are welcome to trade with us.
FSB: What is your stance on traders who win on a consistent basis? In particular, would you close an account if a trader became very successful?
Joe: Successful traders are our best clients because they stay with us. We certainly don't shut them out. Anyway, what would be the point? They would just come back using a friend or family member's name. We stand firm behind our prices and are proud of our profitable clients.
FSB: Please describe your typical client. How sophisticated do you need to be to get involved?
Joe: We really don't have a 'typical' client. I was chatting to one of our Client Service Executives this morning and he said that he had dealt with a very broad range of people, from bus drivers in Glasgow to Lords in Mayfair.
The fixed risk, high potential payout, trading in the bets we offer, really democratises the markets. No one cares who you are - it's all about the money.
FSB: Is it realistic to start with a meagre £75/£100 and aim or expect to make £50 per day?
Joe: I've seen that and far more made from accounts starting at that size but it is not the norm. No one needs to make 50% to 67% a day. If returns of that percentage were sustainable, that would compound to a several trillion per cent return a year (do the maths). Some clients really do very well from the start while others have a tough few months then suddenly seem to turn a corner. Then there are always those who just give up after making a small profit or loss.
FSB: Which are proving to be the most popular bets?
Joe: It really depends on the individual. As I said earlier, some people find a profitable niche in one or two bet types and stick to those; others float around trying all of them until they hit their niche.
FSB: Are traders who are fixed-odds betting now more sophisticated than they were a few years ago?
Joe: It's hard to say but I don't think so. Obviously some have got older and gained more experience but there is no such thing as an average client. They are all so different and it is such a simple concept that there really isn't much sophistication required.
FSB: What special services do you offer your clients? Are there any sources of information and/or tools which you make available to your clients?
Joe: Yes. We have a charting package that was developed in-house; I'm not meant to disclose much yet but there is a lot more to it than you see right now. An official statement will be made to the press on this in due course. It will be something a bit special.
We are always exploring what else we can give clients and are keen to hear suggestions. If they would like research on the markets, we will certainly provide the commentary that our economists produce as a service down the track.
In the markets it pays to give clients everything they want so we hope they will tell us what that is.
FSB: It seems that recently there has been a surge in gambling on foreign exchange. What is driving this growth and which currency pairs are most popular?
Joe: The FX markets are just so vast: it really is mind-boggling to think of $2 trillion a day washing through the markets. I heard the other day that the FX markets trade over 100 times the volume of the London Stock Exchange, which sounds feasible to me.
With this kind of liquidity, there is a lot of trending in the markets and plenty of volatility. Our clients tend to trade more FX than anything else. The most popular pair that we offer is GBP/USD, followed by EUR/USD. We plan to offer some more exotic pairs and hope that clients will email us with suggestions as to which they would like to bet on.
FSB: Why should clients choose BetsForTraders as their financial betting provider of choice?
Joe: At BetsForTraders they are guaranteed transparent pricing, liquidity, use of our 'design your own bet' platform and a dedicated account manager to take care of them.
We also help them get started with a 100 pound deposit bonus (see below for details) if they come from financial-spread-betting.com and use the special code below.
FSB: What are your current plans of expansion? Any hint as to what product you'll be launching next?
Joe: Well, my boss won't want me to give away too much but there is a lot down the track. Our developers are working on some very interesting new bets.
We may not have been the first company in the industry but we are confident that we are the most dynamic with all of our unique bet types - and there are more to come!
FSB: Do you operate any other sites besides betsfortraders?
Joe: No. We focus all of our attention on the one dealing platform. Our staff already work very hard ensuring that everything runs completely smoothly; it's a client-driven business and all our time is currently dedicated to ensuring their satisfaction. Since we went live, we've already expanded our office space as new recruits join the company. At this point in time, we wish to remain focused on maintaining the excellence whilst developing the potential of our dealing platform.
FSB: Do you have any special sign-up trade offers for our readers who decide to go ahead and open an account at www.BetsForTraders.com?
Joe: We certainly do. We currently offer £100 deposit bonus to anyone who deposits £200 or more, just to get them kick-started. Readers of this article can claim the bonus by entering code FREE100FSB when prompted on the account opening page. The offer is subject to terms and conditions which should be read at betsfortraders.com before accepting it.
We also make our weekly newsletter available for free to all clients - even virtual money account holders who are testing the platform with the free $10,000 virtual money that we offer. If you would like to start receiving it, just open an account (real or virtual).
FSB: Thank you for your time and insights, Mr Paterson.
Joe: And thank you, Guido, for offering us the opportunity to be interviewed for your site. You do a great service to the industry amalgamating all this information. It is a fantastic resource and we are deeply impressed by it.
