Finspreads Will Introduce Several Changes In Spread Betting
Finspreads, a spread betting provider part of the London-based group City Index, has just announced several changes to the way spread betting works. With this move, Finspreads expects to improve its service to clients and use new methodologies more in line with what is used in the industry.
Staff at Finspreads is busy right now implementing several changes to offer the best service possible to clients. A few weeks ago the company introduced a new charting package that includes better charts with automatic trend lines and offering more technical studies than previous software.
This time, Finspreads is planning a change in the way spread bets are rolled overnight. Open positions in “Daily Rolling” markets are closed and re-opened every night with profits or losses being crystallised every time this happens. This is a methodology that makes it more difficult to measure performance. When a trader keeps a position open for several days, he will have to sum profit and losses for each day to come to the final figure. Starting 14 April, Daily Rolling markets will cease to exist and will be substituted by the new Daily Funded Trades (DFT). The new product no longer rolls during the evening and there is no crystallisation of open profit or loss until it is closed by the client. This makes it easier for the client to exactly know how he is performing in that position when keeping it open for several days.
Another important change regards price tolerance. Finspreads clients know how frustrating it is to enter a market order just to see it rejected by the software a few seconds later due to price movement. When there are important events occurring it may be really difficult to make a market order being accepted due to the large price movements. This may result in disastrous losses. Aware of the issue, Finspreads will introduce a price tolerance feature, starting April 14. With price tolerance the trade will be executed if the price moves within the specified price tolerance levels instead of being rejected outright and the client requested to submit another order. More importantly, if the price moves outside the tolerance but favourably to the client, the trade is executed.
The list of changes does not end here. Finspreads will also introduce the concept of step margin. Instead of applying a fixed margin requirement to each market, it will vary with the holdings you have. The more you add to your account from a particular market, the higher the margin requirement will be. The initial margin requirement increases more than proportionally with your holding increase. This change will be applied on April 28 and does not affect all markets. Information will be published at the time the change occurs.
Two other changes are planned by Finspreads. First, some designated markets will be cleared through a clearing house, that will act as a central counter-party. Second, any realised profits and losses, adjustments, fees and charges that are denominated in another currency will be automatically converted to the clients’ base currency before being applied to the account.
At Spreadbetting.com we think these changes should have been implemented long ago by this provider and will have a clear benefit for clients.