Interview with Mr Simon Brown, one of the founders of Easy2spreadbet - white-label of Finspreads, conducted by Andy, co-editor - Financial-Spread-Betting.com. E-mail us for questions or to suggest an interview at traderATfinancial-spread-betting.com
Financial-Spread-Betting: Ok, to start when did you launch Easy2spreadbet?
Simon: We Launched Easy2spreadbet in the first quarter of 2004.
Financial-Spread-Betting: What is your company's main activity? Please introduce yourself and your company to our readers and tell us a little about the founders' background.
Simon: My name is Simon Brown and I am one of three founders of Easy2spreadbet. The three of us, myself, Nicholas Wesolowski and William Akerman are all traders by profession. Our trading experience spans a combined 50 years; mainly trading derivatives on the open outcry markets in London. For some of that time we have traded for banks, but most of it has been trading with our own money. Easy2spreadbet was the first white label financial spread betting company.
Financial-Spread-Betting: Tell us about Quantigma (Quantigma Ltd) and its relation to Easy2spreadbet.
Simon: Quantigma is a company providing retail investors with tools to help them them trade. Quantigma was founded in 2000, when all the trading industry focus was on providing access to the markets, but little was being done to help individuals with their trading decisions; hence Quantigma was born, where the experience and trading techniques of its founders were pooled to create a suite of decision support tools. Some of the Quantigma trading tools are supplied free of charge to Easy2spreadbet customers. These free tools include a charting package, Tradequant - which is a buy and sell signal software for UK stocks, and a comprehensive Technical analysis e-learning center.
Financial-Spread-Betting: Tell us why you decided to plunge into the spread betting.
Simon: It was evident that the migration of investors from traditional cash trading to spread betting was going to continue and given the advantages of spread betting, it was likely to become mainstream within a few years.
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Financial-Spread-Betting: What dealing platform do you use? What would you say really stands out about it? Do you offer a platform for charting and dealing.
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Simon: As easy2spreadbet white labels the dealing service offered by Finspreads, it is able to offer its clients the dynamic trading functionality of Finspreads new online dealing platform. In addition to the charting offered as part of the dealing platform, easy2spreadbet clients gain free access to Traders Club, which has a suite of charting tools. The Mix of latest technology combined with decision support tools is both unique and extremely popular.
Financial-Spread-Betting: Could you walk us through Easy2spreadbet's products? In particular what types of underlying investments, markets and events can I trade on?
Simon: Easy2spreadbet offers spread bets on individual shares, indices, commodities, currencies, options, bonds and interest rates. The most popular are individual equities of which we offer prices in any company in the FTSE 350, plus stocks in the Dow Jones EURO STOXX 50 and over 200 top US companies.
Financial-Spread-Betting: Do the spread bets offered by Easy2spreadbet have a definite expiry date or can they be rolled over? -> and if bets are allowed to be carried over will I still have to settle the amount lost from the previous trading session?
Simon: We offer spread bets based on futures and based on the daily settlement, the latter of which can be rolled over on a daily basis. Any daily variation in the value of a position, will have to be accounted for as variation margin.
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Financial-Spread-Betting: 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?
Simon: Accounts can be opened up online, over the telephone or by post. The minimum deposit is just £100 with no maximum. For the first 8 weeks the account holder can trade from as little as 1p bets, after which the minimum is 50p.
Financial-Spread-Betting: Is easy2spreadbet.com operated independently or do you act as an introducing broker? And if so are there any intermediary charges or do our readers enjoy the same commission structure as if they're dealing directly with the primary party? And to whom should our readers refer if anything goes wrong?
Simon: Our customers pay NO commission and our spreads are among the tightest offered anywhere. Our account process is handled by IFX markets, the same parent company that takes care of Finspreads, which handles all the account administration and trading processes for easy2spreadbet clients, who therefore receive the same tight prices and quality service offered to any Finspreads client.
Financial-Spread-Betting: What level of leverage do you offer as standard? Do you offer credit facilities?
Simon: Leverage or margin rates vary from product to product and margin rates offered around the industry are generally similar. It is possible to apply for a credit account. There may be occasions where intraday volatility has resulted in variation margin exceeding margin deposited by the client. In this instance the client will be asked to make up any difference.
Financial-Spread-Betting: Easy2spreadbet has the option of allowing orders to be placed based on 'market prices' as opposed to your quoted price. What are your views as to the advantages/disadvantages of placing orders based on the market prices?
Simon: The most significant difference is that 'market orders' can only be executed during normal market hours even though spread bets may continue to trade.
Financial-Spread-Betting: Please explain how you handle re-quotes and order confirmation times. If I place an order will the price be re-quoted? And fast markets?
Simon: We do not re-quote any orders, they are simply placed by the client to enter the market at a specific price. Trades are made when the client wishes to enter the market there and then. We will only ever not honour a price if once the client clicks on buy or sell and the price has changed by a certain amount before hitting their account. This rarely happens, but can do in very fast markets and benefits the client as they will not be out into the market if it goes significantly against them.
Financial-Spread-Betting: Do you hedge clients' positions (or 'net positions')? Or do you simply take a view of the market each day and adjust your quotes accordingly to balance your spread?
Simon: It is common practice to hedge positions; however as the spread betting markets become more illiquid, two-way flows may occur in some of the major contracts, thus negating the need for hedging. As liquidity increases it is less likely that arbitrage opportunities will arise. I am sure a few years ago, there may have been plenty of these opportunities.
Financial-Spread-Betting: Do your products involve telephone or online trading, or both? Is there a cost difference if both are offered?
Simon: Both online and telephone trading is available to easy2spreadbet clients. Orders can be placed free of charge, however a small charge is applied for 'guaranteed' orders.
Financial-Spread-Betting: Do you offer stop entry and stop loss orders? What are the charges (if any) associated? Is a guaranteed stop loss (GSLO) offered, and if so at what level. Are GSLO offered on all stocks? Can guaranteed stops be attached to both market and limit orders? (or just market?)
Simon: Yes. We offer both stop entry and stop loss order functionality. All guaranteed orders have to be placed at least 10% away from the stock price. Guaranteed stops are available for all the stocks in the FTSE 100 and there is a small charge of 1% for placing the guaranteed order.
Financial-Spread-Betting: Tell us about your OCO and if done orders.
Simon: This is very useful order functionality and is available via easy2spreadbet. A contingent order or 'if done' order can allow the client to attach a stop loss and/or limit order to an opening order if it is triggered and filled. An OCO or 'one cancels the other' order allows the client to leave two separate opening orders in the same market so that if one of them is triggered and filled, the other is cancelled. This leaves the client with just one open position.
Financial-Spread-Betting: Do you offer after-hours trading?
Simon: Easy2spreadbet is open 24 hours, 5 days a week.
Financial-Spread-Betting: Are there any other fees which our readers need to be aware of besides the spread? Do you charge a quarterly trading account fee or an account inactivity fee or a fee for spread bets made over the phone...etc?
Simon: There are no additional fees apart from the guaranteed order fee.
Financial-Spread-Betting: Do you trade on a personal basis? Have you made any mistakes along the way that you have learned from? If so, would you describe them?
Simon: All the founders of easy2spreadbet are traders by profession. Having traded for so many years you find out ultimately what you need to do to make money and what you need to avoid doing to prevent loosing money. Currently all our focus is in running the business and developing trading tools which we can provide for our clients to help them trade more successfully.
If I was to pick on one mistake that I made and which I see many others making, it would be impatience. Boredom trades are a recipe for disaster because you end out taking bigger risks just to be in the game. Also when traders start making money, they tend to increase their trading size too quickly resulting in a loss of discipline and emergence of the dreaded ego!
Financial-Spread-Betting: Any remarkable incident/ trade which occurred and you could share with us?
Simon: One interesting story I have is, when I was trading Gilt options in the open outcry futures market in early 1990s and following a surprise conservative victory I had a position that meant I was facing a loss of hundreds of thousands, before the market even opened! It would have been very easy just to curl up in the corner and bury my head in the sand; however I knew I had a strategy that worked, so I traded and traded all day, hundreds of trades, resulting in a net profit on the day of £2 ! I suppose the moral of this story is to not let your last trade effect how you trade the current situation.
Financial-Spread-Betting: There are many sayings in the markets; do you have a favourite one?
Simon: Trade with the trend!
Financial-Spread-Betting: As of now, what trends do you see in the markets people choose to trade? Are there any sectors, contracts, currencies, indices, particular markets where your clients are clearly more or less successful? Do you think this will change over time?
Simon: Indices are definitely the most popular contracts to trade; however there is definitely a trend towards currencies and commodities as they provide good trending markets with often high volatility.
Financial-Spread-Betting: What do you think are the most important characteristics of the professional spread better?
Simon: The same as any professional trader, spread betters need to be disciplined and have a plan or strategy to follow. No point in having a strategy unless you follow it!
Financial-Spread-Betting: Do you provide any training for new clients? Are there any virtual trading facilities?
Simon: The great thing about new clients to easy2spreadbet is that they can bet with as little as 1p for a period of 8 weeks. This allows them to trade the 'live' market environment without risking hardly any money at all. Our clients also have access to Trader Club , which offers a suite of tools (FREE) to help them trade.
Financial-Spread-Betting: Who is predominantly making up your customer base at this time? Also, what kind of people are your customers - i.e. do they tend to have City experience?
Simon: Our customers are predominantly retail; however the excellent functionality of our new trading platform has attracted some more active and sophisticated clients. We do have some clients with city experience but they are not the majority.
Financial-Spread-Betting: Any other perks or account benefits which our readers should be aware of? Please tell us about your Traders Club. How does one become a club member?
Simon: Any client of easy2spreadbet has access to Traders Club completely free of charge; where they can access an online charts, a technical analysis education centre, market commentary from professional traders and chartists, an excellent seminar programme, free Traders Magazine and BUY and SELL signals.
Financial-Spread-Betting: What services are you offering that others aren't? How do you compare your spreads to the competition?
Simon: Easy2spreadbet has very competitive spreads with Traders Club being its real unique offering.
Financial-Spread-Betting: Recently, we've heard Finspreads has been acquired by City Index - will this have any repercussions on Easy2spreadbet?
Simon: The recent acquisition will strengthen our position and ability to offer the most competitive service in the UK.
Financial-Spread-Betting: We've seen more companies move into this market and the structure of bets change. What changes do you think there are going to be over the next few years? What challenges do you see ahead? Tell us a little about your future plans
Simon: Spread bets are undoubtedly going mainstream, as they are already competing with spreads offered by other derivatives like CFDs. The industry will and is going through a period of consolidation which is good for the stability of any industry. This will only result in the services being improved to the ultimate benefit of the clients.
Financial-Spread-Betting: Any books and resources you would recommend to fellow traders?
Simon: There are some excellent books available; however I think one can read too many of them. I would recommend reading about technical analysis and trading psychology. This should provide the back bone of a successful trading strategy.
Financial-Spread-Betting: Do you organize any training seminars or meetings which our readers could attend? Do you have any special sign-up trade offers for our readers who decide to go ahead and open an account at www.Easy2spreadbet.com
Simon: Traders Club runs a seminar programme which is heavily focused on education. Anyone can attend these free of charge. Plus all the other tools available in Traders Club are free too.
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