A boy has lost £50,000 trading through a spread betting account held at Spreadex.
Mr. Cochrane, the account owner, stated the losses were accumulated by his girlfriend’s 5-year-old kid when he accidentally left his computer system on when he was away for two days to visit a friend. The boy thought he was playing games in the computer but he quickly accumulated heavy losses by trading oil, gold, and silver.
Mr. Cochrane claimed that the boy made the trades without his authorisation or knowledge such that he should not be liable for the loss. Spreadex, the company where the trading took place, attempted to claim the £50,000 loss arguing that the client is responsible for any trading taking place on his account, as stated in their terms and conditions.
The T&Cs signed by Mr. Cochrane state that he is liable for any trading losses or any other damage incurred by any misuse of his account. The client is responsible for keeping the security of his account and cannot claim being not liable for losses when he has not taken the necessary precautions to avoid unauthorised use of his account.
Deputy judge David Donaldson ruled in favour of Mr. Cochrane considering that although there is such a clause in the T&Cs signed by the client, the T&Cs are inadequate to bind him. According to the judge, it is very unlikely that Mr. Cochrane read through the T&Cs since they are extremely lengthy, totalling 49 pages.
This ruling will certainly alert many other spread betting providers that, at the moment, may be trying to reduce the size and complexity of their T&Cs to avoid a similar outcome if some issue arise with a client.
24 Feb 2012
Spreadex, a UK based spread betting provider, has acquired the client list from the bankrupted rival MF Global.
After the shocking bankruptcy that put many traders in a long queue to receive their funds while KPMG was trying to manage what is left from the company, Spreadex took the opportunity to acquire the client list from MF Global, without any financial obligations attached. This means that MF Global clients were offered a continuation of service from Spreadex but without the funds they had in their accounts. Any claims on the funds should be made to the administration led by KPMG.
Many MF Global former clients were very dissatisfied with the situation since they saw their personal data changing hands without their permission and they were offered a continuation of the spread betting service but without their account funds.
It is usual for a company to acquire assets without the attached liabilities when a bankruptcy occurs and that was no different in this situation. In terms of privacy, the data can change hands without the Data Protection Act being compromised because the contract terms signed between MF Global and its former clients included clauses allowing for this third party involvement.
Although clients have been offered a continuation of service by Spreadex, nothing obliges them to do so. Many clients have already jumped out of the boat and are now using other spread betting accounts they hold at other providers while others are still more concerned with receiving the funds they held in their MF Global accounts rather than with continuation services.
The MF Global case was a major blow in trust since clients’ funds should be held in separate accounts such that in case of a bankruptcy, clients are not affected as dictated by the FSA rules. Unfortunately that was not the case with MF Global, meaning the FSA will have to rethink about its rules and supervision role to avoid future similar situations and rebuild the trust.
Just because this situation happened it does not mean spread traders can’t trust providers. There are many companies like IG Index, Capital Spreads, City index, and others that are always scrutinised by authorities and in certain cases, also by shareholders due to them being exchange-traded. They are safe places for spread betting. In any case, if you hold a large portfolio or if you trade a significant part of your savings, there is a rule of thumb that advises you to spread your eggs around as with other matters in life.
07 Sep 2011
Spreadex and IG Index, two leading spread betting companies based in the UK, reported last August as having been a record month in terms of client transactions. Spreadex registered a 28% increase in bet levels and IG Index reported 900,000 transactions in just a single day.
August is traditionally a quiet month in which investors go on vacation and there are no major events affecting stock markets. But this year it was different. The high levels of sovereign debt without solution, the anemic growth anticipated by weak economic indicators, the lack of job creation, and the downgrade in the USA credit rating; all weighed negatively in stock markets and led to increased volatility levels. The FTSE 100 lost 7.20%, traded in a range of 1123 points and August ended as the fifth most volatile month of the last 20 years.
David Jones, Chief Market Strategist at IG Index commented: “August saw the FTSE 100 move in a range of more than 100 points on 18 out of the 22 trading days – something that in more normal market conditions would only happen three or four times a month. As a direct result of the volatility, the number of orders placed by clients jumped significantly, with the PureDeal platform processing almost 900,000 transactions on 9 August alone.”
In fact, August 9th was one of the most volatile days the FTSE has in memory. Although closing higher 1.89%, the FTSE traded in a range of 384 points that represents 7.6% of the previous day close. Many traders took the opportunity to place more trades than usual while others have been desperately trying to re-open positions closed by stop orders just to see them stopped again and again.
During highly volatile periods spread bettors need fast and reliable software that allow them to rapidly place and execute any order. According to Tim Hughes, Managing Director of IG Index, PureDeal offers that reliability and is one of the main drivers for the record transactions placed at IG during last August. He commented: “In a typical month we will handle in the region of six million transactions. The resilience and robust performance we’ve seen from the PureDeal platform during the peak periods of demand in August underlines the stability and reliability of our software – something that we know continues to be a key driver in attracting more people to spread bet with IG Index.”
Spreadex, an UK-based financial and sports betting provider, conducted a research to identify profile differences between financial and sports spread betting clients. The research was based on the firm’s database of clients. The 5,000 most recent financial traders and the 5,000 most recent sports spread bettors were selected and compared against each other.
Spreadex Marketing Communications Manager Andy MacKenzie said: “The overall findings show that both financial spread betting and sports spread betting is a male dominated environment. Although there are slightly more female customers on the sports side, women still represent a very small amount of the overall number of people attracted to spread betting.”
Male clients represent 94% and 92% of the client base in financial trading and sports betting respectively, clearly showing woman still continue to dedicate their time to different activities.
The research showed there is a noticeable difference between financial and sports clients in terms of their annual salary. Almost half of sports clients earn less than £30,000 but just 37% of financial clients earn in that range. At the other extreme, 34% of financial clients earn more than £60,000 but just 26% of their sports counterparts earn on that level. The justification partially lies in the fact the average financial client is older than the sports bettor. The average age is 46.3 in financial trading and 43.2 in sports. Older clients are usually wealthier.
Another interesting finding is related to location of each type of client. One-third of financial clients live within the M25 but just 29% of sports bettors live in that area. Andy MacKenzie commented: “Those interested in financial trading live close to major conurbations, with the majority located in the south east, whereas sports spread betting punters have a more even spread across the UK.”
Sports spread bettors usually see the activity as fun and frequently base their bets on their own feelings. Financial traders view their activity as an alternative way of investment and usually spend much time researching.
16 Aug 2011
Spreadex, a UK-based financial and sports spread betting firm, has upgraded its charting package to include new tools to better serve the needs of its clients.
The award winning spread betting company, that has already won a prize this year from MoneyAM as the Best Online Charting Provider, upgraded its software again to include
- Automatic addition of trend lines to charts in order to show key support and resistance levels, moving averages and other important data.
- Addition of volume indicators on equities.
- Addition of new technical indicators and new customisable parameters on existing ones.
- Ability to publish charts on Facebook and Twitter.
The spread betting industry has been assisting to an increase in competition over the last few years, requiring companies to not only offer a good range of markets with tight spreads but also fill the package with strong tools to help the trader. Spread betting clients are becoming very refined in terms of the tools they use and the charting package is in the centre of their needs. The automatic addition of trend lines is one of those features that traders will find very helpful, letting them save time and improve entry and exit levels.
Commenting on the upgrade, Andy MacKenzie, Spreadex Marketing Communications Manager, said: “Financial spread betting is often based on careful planning and analysis so a powerful and accurate charting tool is a must for any serious trader. Even though our charts won an award earlier this year, we were keen to make the tool even better for day traders, forex traders and share traders alike.”