City Index (established in 1983), owned by Intercapital Private Group, offers spread-betting products across the global financial markets, including major indices, currencies, commodities and individual equities and their associated options. Until 2001, when City Index launched a Web site developed by Arcontech, it handled most of its trades by phone. Now it uses Arcontech's CityVision on-line trading system, market data distribution system and contribution engine.
City Index provides both contracts-for-difference (CFDs) and spread-bets, in numerous different markets and asset classes. With regards to CFDs, City Index claims that it will always quote at least the same price as in the cash market, although it's often able to beat this because of its own order flow.
Accessing prices is just a matter of clicking the instrument required. The price shown then streams (changes) with the market, until the user clicks on it. City Index then guarantees that this is the price the customer will receive. Cityindex also offer a simulated trading account which can come in handy but is useless as a platform for trying out a trading strategy.
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Trade response is normally less than five seconds, and position update is virtually instantaneous. It's possible to place both stop-profit and loss orders through the platform. I really like City Index's new ordering system but their spreads are wider than most. Trading closes at 4 pm at City Index. If you want to trade later you can use the futures but the spread is 16 points...Cityindex's spread betting deposit margin is 20%. The customer service is however very good.
There is no news service, but research comes from Digital Look and City Index. Be sure to check their heatmaps tool (http://cityindex.digitallook.com/cgi-bin/digital/heatmap.cgi) A basic charting package (provided by Money AM) allows customers to receive technical analysis commentary by e-mail. However, City Index doesn't have news. CityIndex says that most of its customers have access to news and other services elsewhere, so most of its attention is fixed on the platform. In any case we always recommend you to use an external research source.. .
CFD clients who trade at least eight times a month can access free UK Level II data via ADFN. CFD commission costs are 20 bps a trade, although this is negotiable. Funding costs are similar to other CFD providers, with buyers receiving Libor -200 bps, while buyers pay Libor1 +125 bps.
Last time I checked, City Index were not offering bets on the FTSE 250. City Index seem to have also scrapped their property-linked derivative products. (which were based on the on the HM Land Registry Quarterly Residential Price Report) One would expect the people behind the smarmy facade of such cyber-bookmakers to be as sharp and as fleet of financial foot as your average turf accountant, and they undoubtedly are but they they must have lost a fortune with their property bets. No big loss, in any case the property products offered by City Index were too short-dated for many uses.
City Index like its main rival IG Index doesn't hedge all bets. Like all bookies, it will take clients on where it believes they are simply wrong or, to put it bluntly, not good enough to make a crust over the long term. And that's a point worth remembering.
Recently, City Index has launched Binexx.com - a betting exchange for financial flutters which allows punters to offer each other odds using the 0-100 binary system on short-term movements in the FTSE 100, SP, Dax and Dow Jones indices, foreign exchange and big stocks such as Vodafone, BP, Shell and Glaxo. The technology behind binexx comes from TradingSports, which supplies several sports betting exchanges.
Payments can be made by cheque (allowing time to clear), telegraphic transfer/bank transfer, or Switch, Delta, Visa or Mastercard. Visa and MasterCard transactions are subject to a 1.5% processing fee, a rate subject to revision at any time in accordance with bank charges.
Credit Accounts are available to UK residents only and one needs to show current/recent evidence of liquid risk capital of at least five times the credit allocation. City Index's terms and conditions for opening an account are available for download here
The minimum stake (per point) is £3 by either phone or online and you can trade trade online or on the phone up until they close, which is 21.15, Monday - Friday. You can place any kind of stop, online or by phone but guaranteed stops have to be done via the phone.
For security, City Index's clients are logged off its website after 10 minutes of inactivity, which could prove annoying to some, but which at last means that the office cleaner will not initiate some horrible positions.
Two of the UK's largest online stockbrokers, Charles Schwab and TD Waterhouse (TDW), have launched contracts for difference (CFD) services. Schwab and TDW are effectively white-labelling specialist CFD provider City Index's service. City Index charges 0.25 per cent, with a minimum of GBP10. So for small trades, you may be better off going directly to City Index. Barclays are also pushing City Index as their sub-contractor for CFD's... the problem is that City Index appear a little disinterested..they never EVER call back which they said they would, and sound a lot of the time like they are bluffing/CYA'ing when they say 'yup, that's no problem'...etc Latest updated review of City Index is found here.
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As far as financial strength City Index are part of the Intercapital Private Group of Companies which has a significant shareholding in ICAP plc - the world's leading derivatives broker (or so they say), listed on the London Stock Exchange and a member of the prestigious FTSE 250 index. Like all spread betting firms City Index is also regulated by the FSA
City Index were also involved in the Spaniard and Plumber case some time ago; a controversial wager that sparked a major investigation a few years ago.
| The story of the Spaniard and the Plumber in brief - The Financial Services Authority (FSA) is to be sued by Paul Davidson, the entrepreneur investor known as "The Plumber", over a record fine handed to him last year. He received the £750,000 fine for market abuse - the largest-ever by the FSA for an individual - in October, after the FSA had investigated a spread-bet he had taken out on Cyprotex, a biotech firm he founded, at the spread- betting company City Index. City Index hedged the bet by taking out a contract for differences with Dresdner Kleinwort Wasserstein, which in turn bought 5.1m Cyprotex shares. The FSA concluded that Davidson had cooked up the scheme to ensure the success of the Cyprotex float. |
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