Capital Spreads: Direct from the Horse's Mouth

Angus Answers Your Spread Betting Questions:  You are on Angus' Question Index : Page 1 : Page 2

Simon Answers Responds to Your Questions:
  Index : Page 3 : Page 4 : Page 5 : Page 6 : Page 7

There are two ways to browse through the questions - either use the Index lists above or browse through the FAQ sections below. Feel free to send us your Capital Spreads questions.

Simon Denham, Managing Director of Capital Spreads and Angus Campbell, Head of Sales at Capital Spreads respond to your Questions

No contest, reading Simon's and Angus' (Capital Spreads) responses and observing how they engage with their paying and prospective client base shows professional and proactive consideration towards such, which is further evidenced by educated and specific detailed answers to the queries we ask them. Honesty has also been shown regarding scalping technical difficulties clients may encounter via spread betting.

Furthermore if Simon and Angus' attitude is echoed throughout the Capital Spreads team and if an individual was looking to use spread betting to back their view in the markets then Capital Spreads may well prove to be the wiser bet in choosing a spread betting service provider.

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Date Published: Fri, 17 Apr 2015 15:23:22

Angus fields Reader Questions -:

Q.
Capital Spreads is now over 6 years old. What have been the highlights so far?
Q.
What are your comments on the general boom in spread betting going on at the moment?
Q.
OK, getting straight to the point - now that the tax rate is capped at 18% does this make spread betting less attractive?
Q.
Are there any other spread betting advantages (apart from the tax-free, the ability to go long or short and the gearing)?
Q.
What sort of people do you think should consider spread trading, and what sort of people shouldn't?
Q.
Why are spread betting and contracts for difference illegal in the USA?
Q.
We often hear clients criticising quote-driven platforms mostly directed to the synthetic nature of the products concerned. Please comment.
Q.
We know that most if not all spread betting providers provide a market maker platform (i.e. quote driven platform). What are the advantages of this platform as opposed to dealing directly on the market (i.e. direct market access)?
Q.
You use a market maker platform - some critics have commented that market makers make spreads artificial and that you are generally betting against the house....
Q.
The growth of the spread betting and CFD markets are sometimes blamed for making traditional stock markets increasingly volatile. Do derivatives really amplify the share moves?
Q.
If the underlying has a spread and a spread bet (shadow) has a spread is it right to assume that a player pays twice the spread: the underlying has to move up both in its own spread and a spread of a spread bet for that player to earn any money? Please comment on the spreads.
Q.
Is short selling really bad?
Q.
Do you see any differences in trading when the stakes are raised? How do experienced traders behave in such situations vis-a-vis speculative traders?
Q.
A number of financial authorities around the globe have recently enforced a ban on short selling of financial stocks meaning that short selling via spread bets on financial instruments has been suspended for the time being...
Q.
Do you envisage that there will be major regulatory changes with regards to spread betting in the future?
Q.
Recently we have seen spread betting providers upping margin requirements with little or no advance notice. What is Capital Spreads policy on margins? Is it fair to providers to move the goal posts with little or no advance notice?
Q.
Are you making it clear enough to those getting into spread betting what the risks are? Do people understand those risks?
Q.
What happens if a client is margin called? How much time are clients allowed to meet the margin call before positions are liquidated?
Q.
How safe are client funds? What is the situation regarding our funds deposited at Capital Spreads? Some spread betting providers have recently been circulating letters regarding the reduced segregation of clients funds...
Q.
What is Capital Spreads policy regarding segregation of client funds? Are funds really ring-fenced?
Q.
Most brokers are required to maintain proper segregation of client funds but trading deposits are often held in just one segregated bank account. Please comment.
Q.
What sort of stakes are your clients trading for? Where is the bulk of the action?
Q.
We have recently seen volatility reaching record highs and the Wall Street index plummeting some 700 points in a day. Usually spread betting providers thrive on volatility but how is this massive volatility affecting trading activity?
Q.
Suppose I wanted to make a longer-term spread bet (3 to 6 months from today) on the shiny metal betting that gold will move from 600 to 800 dollars an ounce.
Q.
Are there any advantages to using spread betting to speculate on the price of gold as opposed to futures contracts or Exchange Traded Funds?
Q.
Suppose I wanted to make a longer-term spread bet (6 months from today) on the price of oil betting that brent oil will move from $63 to over $100 a barrel.
Q.
Suppose I wanted to place a pairs spread bet on a company out-performing say the UK FTSE All Share index or FTSE 250 index.
Q.
Please describe some other interesting strategies which clients can use to minimise the risk and yet still be able to take a position in the market...
Q.
We're obviously going through an interesting time in trading, what sort of strategies work now?
Q.
Do you have any tips for clients on how to deal with the current hyper-volatile market conditions?
Q.
A city analyst has recently stated that less than 3% of clients open short positions. Does this mean that your clients have been mostly losing in this bear market?
Q.
Most of the time I prefer spread betting the futures as opposed to rolling daily bets. With futures one does not have to pay financing everyday...
Q.
Suppose I receive a really bad fill by my spread betting company. Is there any way I can check if my fill was legitimate?
Q.
Does your platform work on a MAC?
Q.
Do you offer the FTSE 250 as an index to open a position on?
Q.
You offer a very competitive 1 tick spread on FTSE and Dax rolling contracts. Are there any other markets which you offer where your spreads are distinctively competitive?
Q.
You have recently extended your 24-hour trading to cover index markets like the Wall St Rolling Daily, Wall St Future Daily, S&P Rolling Daily, S&P Daily Future...
Q.
If betting downwards on indices is OK, but betting downwards on individual stocks within certain sectors is barred...
Q.
Capital Spreads does not give credit - does this mean that you are less exposed to bad debts?
Q.
What prices are orders executed at?
Q.
What prices will my stop loss orders be filled at?
Q.
Why is there an order placing distance?
Q.
Some traders worry that if stops are activated at the provider's prices this raises the potential for manipulation of prices. Please comment.
Q.
Are stops activated at your price or the market price? If the former why? Are prices closed on the bid or the mid-price?
Q.
How do you handle stray ticks? I've read a case where a BP spread better got stopped out as a result of a nanosecond blip/dip...
Q.
Can stop losses be moved or cancelled when the underlying markets are closed?
Q.
It is my understanding that Capital Spreads does not provide guaranteed stop losses on all instruments. This can expose clients to higher risks if they go short...
Q.
Sam Dibb, a consultant at the UK hedge betting consultancy Certain Risk Management has stated that if I place a spread bet on a single stock, the spread betting firm will almost certainly hedge it using a CFD...
Q.
'You trade our price and not the exchange although prices are derived from the exchange'. But how close do your prices mirror the underlying markets?
Q.
What sort of volumes are being traded in the credit crisis, compared to previous activity?
Q.
Is recent volatility in the market the best market environment for spread betting?
Q.
How can spread betters make the best use of volatile markets?
Q.
Is there a bearish or bullish sentiment among your users - i.e. do you have more 'punters' or 'hedgers'?
Q.
Are spread betters contrarian by nature?
Q.
How can spread betting be used in risk management?
Q.
Are there any sort of strategies which clients can apply to boost profits on a losing position?
Q.
Suppose I wanted to protect my GBP50,000 sterling share denominated portfolio against the possibility that the British Pound were to fall further against the EURO
Q.
Can you give me some idea of how much money should one risk on each trade?
Q.
I was also interested to hear Gordon Brown state "Debt has been considerably lower than a decade ago, and lower than all G7 countries except Canada" If *all* the G7 countries are in significant debt .. to whom are they in debt to?
Q.
We are just three weeks removed from the worst level for the Dow Jones Industrial Average since 1987 and the future may be even grimmer.
Q.
What does the future have in store for the financial spread betting sector?
Q.
Where are your clients coming from - are they mostly based in the UK? How many of your clients are based outside the UK? Can spread betting find success in other overseas markets?
Q.
What are some of the behaviors of successful traders?
Q.
Different sort of question, what sorts of capabilities do successful traders have, where have they picked up these skills?
Q.
Are there any markets/indices (if any) which may be better suited for beginners (in your view) in terms of research and analysis? What advice would you give someone starting out?
Q.
Some experienced traders recommend starting traders to trade the S&P not the Dow. Why is that?
Q.
Any remarkable incident/trade which occurred and you could share with us?
Q.
And what's next on the cards for Capital Spreads?

...Continues here - Simon addresses Capital Spreads Questions


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