The second part of this interview will focus more on the ProSpreads offering - markets and trading hours, contract sizes, the dealing system, re-quotes and DMA platform are all discussed here...
FSB: What markets can clients trade? To which exchanges do you provide access to?
Simon: Futures Betting provides spread bets on the major indices, currencies, bonds and commodities. Our spread bet prices are based on the underlying futures which exist on some of the US & European exchanges (for further information, refer to our spread card).
FSB: Please define 'a lot'.
Simon: 'One Lot' is the minimum hedge available to ProSpreads in the underlying futures market. For example 1 FTSE 100 Lot is the same as a £10/point spread bet which therefore represents the minimum bet size available.
FSB: In which base currencies can clients trade?
Simon: Clients trade in $, Euros or GBP, depending on the product. Balances can be converted to any of these currencies at the customer's request.
FSB: What are the minimum/maximum stakes?
Simon: These can be viewed in the Spread Card however some examples are listed below:
| Minimum/Maximum Stakes | ||||
| UK top 100 (FTSE) | £10/point | |||
| Wall street (Dow) | $5/point | |||
| US Top 500 (S&P 500) | $12.5/quarter point | |||
FSB: ProSpreads gives access to futures prices. Tell us in simple terms what is a FTSE future - on what variables are futures prices based?
Simon: A FTSE Future is a contract which represents the future price of the FTSE 100 Index. The price of the Future will differ to the actual Index price because of 'Cost of Carry' including dividends. The Spreads offered by ProSpreads are often as tight as 'daily rolling spreadbets' but the customer does not incur any interest charge on holding the ProSpreads spread bet.
FSB: Will one be able to trade say 1 pound per point or is it still in lots?
Simon: The customer will be betting in lots, where the one lot in the FTSE is worth £10/index. Therefore £10 being the minimum bet size per point.
FSB: The minimum size for a FTSE future is one contract = £10/point. Does this mean that your platform isn't suitable if one wants to trade 1 pound per point but suitable for larger sizes?
Simon: That is correct.
FSB: How much is the spread charge - it is my understanding that this consists of the minimum price movement of the underlying future (however in the Indices, it is based on ONE full index point). Is this correct?
Simon: Yes, that is correct. The spread charge is a fixed charge on top of the underlying market price.
FSB: What is the spread etc on say EUR Globex future. i.e. what do you add on to the normal spread of 0.0001?
Simon: For this contract we would add 0.00008; or 0.8 or one 'pip'.
FSB: How much would a round trip on the Dax with a bet size of 50 Euro per point cost? Please explain with an example.
Simon: Converting to a round trip price, the spread charge would equate to 14 Euros.
FSB: Is telephone dealing available? Are there any additional fees for using this service?
Simon: Over 90 % of bets are placed online. We do offer a telephone service and there is an additional £2 per lot charge for telephone orders.
FSB: Does the platform include charting capabilities?
Simon: Not yet; however we hope to launch a service soon. Because our clients are at the professional end of the market, they tend to have their favorite charting package which they subscribe to separately.
FSB: Can I bet outside market hours?
Simon: The ProSpreads office is open from 6.30am until 9.15pm (UK) for enquiries and support; however it is possible to place orders during those times which will be active overnight.
FSB: How is that there is no financing daily requirements to cover the margin requirements?
Simon: Because we use the Future as a hedge we absorb the financing charge meaning the client does not incur an interest charge.
FSB: Something which day traders and those doing more frequent spread deals are definitely going to like are your sliding scales of spread widths depending on the volume traded. Could you tell us how this works in practice?
Simon: The first 200 lots executed in any one month is charged at Band 1 rates. Any volume above 200 is charged at Band 2 rates which are typically 50% of Band 1 rates. The spreads will narrow dynamically as a client moves from Band I to Band 2.
FSB: Please explain how you handle re-quotes and order confirmation times. And fast markets?
Simon: With ProSpreads, a client will not experience any requotes, because all spreads are directly referenced from the underlying price. So if a price is available in the underlying market, the same price is available to clients. And that goes for 'fast ' markets also. So we don't do re-quotes full stop. As for fast markets, it's business as usual. We are open electronically and on the phone as long as the underlying market itself is open.
FSB: Does this mean that clients are free to trade the news without orders being delayed?
Simon: That is correct.
FSB: Tell us about the market overview, the Pro Ladder and the market depth screen.
Simon: There are 3 ways to spreadbet on the ProSpreads platform -:
The more traditional method of submitting a spread bet order.; whereby the user fills in an order ticket, including fields such as bet size, price, order type and any 'stop' requirements.
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User fills in an order ticket, including fields such as bet size, price, order type and any stop requirements.
This is the most popular amongst the professional traders (see picture below). The ladder shows the orders above and the orders below the current traded price. The ladder allows the user to place limit and stop orders on the ladder itself (without using an order ticket), including orders above or below the market.
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Second you can spread bet using the Pro Ladder.
A view similar to other spread betting platforms, whereby the user is presented with one Bid and one Offer price on which to trade. A user can select 'single click' option. Whereby just by one mouse click on the bid or offer a default quantity can be executed.
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User is presented with one Bid and one Offer price on which to trade.
FSB: Please detail the kind of stops and market orders being offered by ProSpreads.com
Simon:The following order types are available on the ProSpreads platform:
Limit, Stop, Stop limit, Trailing Stop, Market and Iceberg.
FSB: What is an Iceberg order?
Simon: An iceberg order allows a client to submit a spreadbet order in increments. So for example, if a client wanted to buy a large amount of FTSE 100, say £1000 per point (or 100 lots) he could put the order in as an 'iceberg' order in £100 (10 lots) increments (i.e showing the tip of the iceberg, with a lot more underneath). The advantage of this order is that large orders visible to the rest of the market may result in other participants jumping in front of the order thus reducing the chance of the large order being filled.
FSB: I understand that ProSpreads offers trailing stop orders. Please explain with an example.
Simon: A Trailing Stop (or rolling stop) is a stop loss order that moves with the price, when a position moves into profitability. So, if you buy a particular market and the price rises, the stop loss price rises proportionately, but if the price falls, the stop loss price doesn't change.
FSB: Why do individuals use Trailing Stops?
Simon: Individuals use Trailing Stops, quite simply, to lock in profits. When a market moves in a profitable direction, a trailing stop provides automated discipline to take profits should the market price change direction.
In addition it may encourage an individual to not take profits too early, by allowing a profitable position to run, knowing that if the market were to change direction, the position would be closed out.
FSB: How does it work?
Simon: When you have opened a position with ProSpreads.com, you have the option as to whether to add a stop order to the position, and in this example a Trailing Stop order.
Select 'Trailing Stop' in the order type window on the order ticket. Then select the price ('Initial Price') that you wish the Trailing Stop to start at (see pictures below). |  |
Using the Trailing Stop
Example:If you buy a FTSE spread bet at 5560, you may want to place a Trailing Stop at 5540.
If the FTSE price was to rise to 5590 the trailing stop would rise to 5570 (i.e. would rise point for point with the rising market). If at any time the FTSE price falls, then the Trailing Stop order will stay at the highest price that it has achieved. In this example, if the FTSE retraced back down to the entry level of 5560, the position would have been closed out, by the Trailing stop order at 5570.
FSB: Most spread betting firm enforce a minimal distance from the market where you are not allowed to place stop losses. So with ProSpreads stop losses can be placed anywhere without restriction?
Simon: Any order can be placed at any price with ProSpreads. There are no restrictions on where orders can be placed. You can even place limit orders 'inside the spread'.
FSB: Is your platform more suitable for traders looking into short-term trading or scalping or is it also adaptable for those wishing to take longer time views (weeks or even a few months)?
Simon: The platform attracts the more active speculator, as its functionality and speed of execution make short-term trading easier; however that does not mean that longer term speculators cannot use it as the platform caters for every style of trading, from scalping to long term..
FSB: So do welcome scalpers and intraday traders to use your trading system?
Simon: Most of our clients are intra day traders or scalpers.
FSB: What has been the clients' reaction?
Simon: To quote a few... (from online forums)
'Basically it is the best platform around for the more dynamic trader… If you like to intraday trade with tight spreads and quick execution with no middle man in place to requote u or slow u down this is for you..'
'GUYS I have been on this BB for a very very long time and never ever recommended any 1, or any software,,,, ,,,,,
How ever those of you who also Spread bet for TAX reasons you must really look at ProSpreads,'
It could make a huge huge difference to your execution hence your P/L
All I can say their platform is like a Ferrarie compare to reliant robin'
FSB: Who is predominantly making up your customer base at this time?
Simon: Both professional futures traders who wish to spreadbet and active spreadbetters who wish to utilize the advanced technology and features of the ProSpreads platform. Our customer base is predominately made up of UK, Republic of Ireland, and European traders, all of whom are market experienced individuals betting for their own account.
FSB: How much capital does one in practice need to start trading with Futures Betting?
Simon: Minimum initial deposit is £1000.
FSB: 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?
Simon: ProSpreads has no quarterly or inactivity fee, just £5 for transfers back to a customer.
FSB: Are client funds fully segregated?(i.e. are clients also protected from other clients who may go into default?) If so, with which institution and which jurisdiction are funds held?
Simon: Funds are held at Barclays Bank, London. All client funds are held in an account segregated from company funds and activities. Although client funds are segregated from the companies activities, they are pooled with other client funds.
FSB: Are funds protected in the unlikely situation that Futures Betting should encounter financial difficulties?
Simon: Client funds are always ring fenced from ProSpreads and therefore not exposed should ProSpreads go into liquidation.
FSB: How do you classify clients - intermediate or private customers and why? - As we know classifying clients as intermediate indicates a certain degree of knowledge and experience on the clients' part.
Simon: The Financial Services Commission requires ProSpreads to categorise all clients as 'professionals' , which means that, in order to be approved by ProSpreads, they require to have a certain amount of experience.
FSB: Do you offer a demo platform?
Simon: We do have a platform and a video of the core functionality can be viewed on our platform movie. The simulator replicates live trading without the bets getting matched.
FSB: Sell us your company. Why should clients choose ProSpreads.com as their spread betting firm of choice?
Simon: In a nut shell we are offering an impartial and transparent level playing field. Trading is hard enough as it is without having the odds stacked against you.
FSB: Suppose I'm interested, how do I go about to open an account ProSpreads, how long will it take? Do you require clients to have previous trading experience?
Simon: CLIENTS DO NEED TO HAVE AN UNDERSTANDING OF MARGINED PRODUCTS AND NEED TO HAVE BEEN TRADING/SPREAD BETTING FOR AT LEAST 12 MONTHS. CLIENTS CAN APPLY FOR AN ACCOUNT ONLINE, WHICH WILL NORMALLY BE TURNED AROUND WITHIN A DAY.
FSB: Do you have any special sign-up trade offers for our readers who decide to give Futures Betting a try?
Simon: We offer an extremely competitive all round package which is generally accepted to be unique. We are completely transparent when it comes to pricing the spreads for any given volume (everything is published on our website www.ProSpreads.com) so everyone knows where they stand.
Our clients are professionals, so at the end of the day, they are not interested in freebies . What they want is tight spreads, fast execution and the most important of all is 'no re-quotes', which is the No 1 hook for our clients. Especially in these volatile markets, spread betters are forever getting re-quoted - our clients never get re-quoted because we directly reference the underlying futures market. In other words, if the price is available in the futures market, the spread bet price is available to our clients.
FSB: Do you accept international clients? Do you accept deposits by BACS? Which other payment methods do you accept?
Simon: Yes, we do and clients can deposit funds by BACS, debit or credit card.
FSB: What do you see going forward?
Simon: Futures Betting expects to continually attract the very active spread betters, as its platform and service offers an unrivalled experience for the seasoned professional.
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