(Deal4free.com is the spread trading name of CMC Group)
CMC Group (CMC stands for Currency Management Corporation aka Deal4Free) transacts over $1bn per day and up to 500,000 spread trades a month across its financial spread betting, CFD and FX desks. CMC Group's CFD and spread betting desks spread traded the equivalent of over 26% of the total number of shares transacted by private clients through London Stock Exchange member companies online in 2001 and the equivalent of 78% of the volume transacted.
Geoff Langham, head of trading at spread-betting house CMC/ deal4free, says: "Commodities are a growing part of our business. Our volumes on oil are up 50% in the last six months compared with a year earlier and gold and silver are up 20%-25%.
"Trading in other commodities was pretty light a year ago, but it has increased this year as people have looked for new opportunities outside oil and precious metals."  |
Geoff Langham, head of trading at spread-betting house CMC/ Deal4free
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Deal4free has been the most aggressive spread betting company over the past 10 years among the UK's leading financial spread betting providers. It has led the price war in terms of spreads, something that has worked in your favour and in part made the product the fast-growing phenomenon that it is. There is no difference in the spreads quoted by Deal4Free for CFDs and spread-bets. Spread-bets are the more cost-effective, as they are tax-free. But there is more flexibility offered with CFD trading, such as leaving entry-point orders. This means that you can leave orders to buy and sell at points below and above the market.
The spread betting company's parent company hit the radar over 10 years ago when it offered five-point spreads in foreign exchange transactions, which undercut all the rivals. But things have changed a lot since then with new spread betting firms entering the market and existing providers revamping their software
Our software is proprietary rather than web based, which means that it includes more features and, more importantly, is more reliable than many platforms," continues Mr Langham. "The software has also been created in-house and we have a team of 50 software developers constantly working on improving features.
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Geoff Langham, head of trading at spread-betting house CMC/ Deal4free
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A minimum initial opening deposit of £1,000 may put off some punters, but the Deal4Free.com website offers spread bettors a wide array of markets on which to bet. Accounts (including a joint account option) can be opened on-line and funded with the usual cards. They offer 24hr trading during the week with a choice of either a PC software based or browser based platform.
Fact is they do have the tightest spreads and they offer out of hours quotes for currencies, commodities and indices. As far as I know they also accept international clients (they certainly used to) and offer a virtual trading platform facility to teach you the basics. Deal4Free will also allow you to bet £1 a point on currencies, indices and shares. That is quite good as it provides the opportunity to get comfortable and feel your way without incurring major losses in the process (very important). Paper trading and the real thing are very different as you will soon find out.
Spread bets can be placed on the major UK, US and global stock market indices. In addition there is a wide array of single company shares on which to take a position.
Unusually, punters can also take a view on the performance of major UK stock market sectors. These are made up of a selection of similar stocks from the same industry category (say telecoms or pharmaceuticals) and punters can then use them as a speculative or hedging tool, depending on how other aspects of their investment portfolio are constructed. Other spread betting opportunities come via the Forex and bullion markets, via treasury stocks and on commodities as well.
Software and response time is good. Deal4Free quotes a 3 tick spread for EUR/CHF/JPY/AUD Dollar pairs, 3-5 pips for most others. Spreads do not vary during 24 hours, like I have seen Oanda's. Only main currencies and commodities have reasonable spreads. I'm sure all spread companies could shorten their spreads even further if they wanted to. If you compare the quotes of deal4free spreadbet and deal4free Forex they are the same except for a higher spread of 1 pip on the spreadbet service. FTSE-350 shares can be traded at SETS/market prices and the interface is very good.
Customer service is poor (but slowly improving), you are always wrong and their system cannot fault...etc. If you have a problem you have to argue with the actual traders which can be quite daunting at times. Note that they tape all telephone conversations like most other spread betting companies.
The worst thing I find with deal4free is the re-quoting when the level2 shows more than adequate volume. I have looked around and have also GNI CFD account and Finspreads spreadbet account, but it has to be said that d4free still has the best spreads and 5% margin has yet to be beaten by any others. Initially CMC said they were happy with all timeframe traders but they have, over the last year or so, informed the very short term traders to seek a service 'closer to the market'. This is again a problem for them, how do they encourage the scalpers not to trade with them, all they can do is hinder them in certain ways. Obviously the best way is to remove 'instant execution' and hence send them to're-quote hell'.
If trading in small sizes though there are no re-quoting issues and you can trade at the underlying price. For larger orders e.g. £5000 underlying you will encounter re-quoting issues (especially if winning consistently...).
Also spikes can be an issue. Simply put they can stop you out but won't fill at market price. For example once the FTSE spiked on futures 4510 and all sell limits/stops were hit and filled but not a single order to sell the cash market was filled..! It traded there and their selective policy filled the stops and took the market off the table and refused to fill traders wanting to trade at the same price........week in week out this was happening.
With Deal4Free you can place market orders, stops, limits, OCOs (One Cancels Other) and CRB (Controlled Risk Bets). They don't however allow stop losses to be placed at the same time as entries and stop orders need to be placed an arbitrary distance from the market price. I don't understand the reason for this other than to disadvantage the customer (i.e. me!) .
Their charting is quite good, but not brilliant. At the moment you can only bring up one timeframe per instrument (though they are fixing this in their new beta software). They have a few indicators on their charts but not loads. That doesn't worry me so much really as There are a ton of decent free and subscriber charts out there.
CMC SpreadBet (aka Deal4Free or Steal4Free as some disappointed users affectionately have nicknamed it 
) also accepts "rolling cash" bets without expiry dates, allowing you to refresh a position (without incurring a new spread) for a small daily charge.
On the whole I rate the service as just satisfactory, nothing special or fancy but they do have a decent trading platform. Beware though their system is not for scalpers or very short-term traders.
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