The Spread Wars have Started!

Scarcely a day has passed that IG Index have announced commission bid-offer spread cuts across their main index markets (Dax, FTSE and Wall Street) that City Index and Finspreads immediately followed today announcing slashed index spreads to 1 point on their FTSE 100, Wall St, Dax and France 40 index markets during market hours.

What is evident is that IG seem to have triggered a ‘spread war’ here. IG Index might not look at WorldSpreads and Capital Spreads seriously (check WorldSpreads results 0.8 m pounds operating profit for 2009) but IG Index’s cuts of yesterday were perhaps more intended to attract CMC’s clients and City Index’s clients – what with Wheat 1 pt, Corn 1 pt daily, Oil 4 pts, now spreads cut effects major indices, I think next time the cut might very well effect shares… Meanwhile, it seems that FXCM will have to narrow their spreads to compete while Capital Spreads, Tradefair and the like might have to hit back as well.

Comments: What is surely evident is that increasing competition is really making itself felt amongst the providers and making the whole spread betting world a lot better. Also, as a blogger rightly commented – when one speaks to the support people these days they really make the effort, their attitude seems to be in-check even with my small accounts they give me the time. And the mysterious platform lockups and disconnections are getting less and less. Let’s hope the spread cuts are a full time spread cut – not an occasional reduced spread like with EUR/USD and a few other forex pairs.

Tags: City Index, cityindex, spread betting

This entry was posted on Tuesday, March 30th, 2010 at 7:01 pm and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.