Force open

[Guest Chen]

I'd like to suggest to add a setting that allows Force Open new positions as default, so traders do not need to manually tick Force Open each time when they log into the platforms

[Guest Donnyp30]

I was promised that this would be added this year. Ive lost many positions due to hedging

 

I honeslty fed up. This option should be standard

[Tri]

Force Open is a trap to make us lose trades. This feature is counterintuitive and arguably, not fit for purpose. Fit for purpose is a legal term btw.

[donaldprice]

FORCE OPEN should automatically occur when you tear of a ticket, if you are hedging the same security then you do if i remember have to tick force open it.

[HannahL]

Hi  , thanks for the post.

 

We've received lots of feedback that clients would like to have 'force open' the default setting on their account, although plenty still prefer the current standard of netting off long and shorts for exposure reasons.  I'm pleased to confirm that we'll be introducing this functionality in our new web trading platform, which will be rolled out for all clients over the coming months!

 

In the meantime, if you make a force open error and accidentally close a position, please just call our dealing line (0207 896 0000) as soon as you can so one of our dealers can resolve it for you.

 

Would be great to hear if others opt for a long/short hedging technique or prefer netting off?

 

Thanks,

Hannah

[Tri]

Dear Hannah,

 

Thank you for your message. This ForceOpen should have not have existed in the first place, akin to what your competitors do.

I have lost many trades in the past 2 years in this manner. I didn't even know what Force open was doing at the beginnig. Only found out the hard way.

I have had the intention to bring a formal complaint regarding this issue. I'll do so in due course.

 

Netting off simply doesn't make sense. If I have 3 positions long and decide to open 1 trade short, which one of the 3 longs will be closed? It is very bad for management purposes in the first place. Not to mention that your platform may freeze at times and although I might have ticked the Force Open, when it reloads,the tick is lost, I execute the trade and don't even notice that another trade has been closed or part of it until several days later. Or never.

Further, when one trades many times, it is all so very easy to simply forget or miss on ticking the box.

 

Please change this settings asap.

 

Many thanks.

[Tri]

Also, say I have a short position already open and decide to open another short. There is no need to tick Force Open. However, in error, instead of sell I press on Buy, that is, going Long. Small handheld device or even on a computer, a momentary confusion... easy to touch the wrong button.

Then not only would I have a wrong trade, but that would have closed another trade.

 

As I said, Force Open is a trap. Whoever developed it did so with the intention to cause loss for traders, not for neting off. It is not fit for purpose and if one was to take it further, IG will surely lose a legal challenge over it.

 

Imagine that every time you sit in your car, before you turn the ignition on, you have to flip a fiddly switch somewhere, otherwise the tyres will deflate or you will be catapulted through the roof. No small print in Terms&Conditions can save the manufacturer in Court.

[donaldprice]

Hi Hannah i do use the long-short hedge technique as part of a pyramid model, it is a very useful tool to have i find especially when markets are in consolidation. In conclusion it does offer the potential to manage risk better and the added flexibility to manage a trade within a given security.

[FJMC]

Force Open new positions should ALWAYS be as default.

If I want to CLOSE the position I will do that.

Agree is a trap.

[HannahL]

Hi all,

 

Really appreciate your comments and opinions here, and it's interesting that the majority of you so far seem to prefer the natural force open.  We do receive lots of feedback otherwise so there must be a number of different strategies being used on the platform - which is great!

 

I'd like to reassure you that there is no benefit to IG in causing 'force open errors', and this is why we'll always try to rectify it if possible.  This is also partly why we are now building in this functionality to the new web trading platform.  Thanks for your patience while this is done!

 

Keep the feedback coming, and any questions please ask.

 

Thanks,

Hannah

 

 

[hart]

Preferred it be manually selected on the check box 

i had bad experience and did suggest to helpdesk to removed that default check

 

It is very helpful for those having an open positions long or short,

The newbie or people that are not  familiar with this platform will have this problem.

I did three times mistakes on this.

 

Best pick is that traders choose manually to avoid dispute

It make sense that we select,choose and pick on what we wanted.

NB. on this tool only (Force Open)

cheers

hart

[hart]

amended on my comment

my bad folks

 

 

This is my views

It seems that force open check box option is really a setback during execution of trades during high pressure time,and likely traders to overlook.

I have also put up a suggestion to have the option to be otherwise, default the check box rather than current practice.

[FJMC]

If a big percentage of users, not including on this community, prefer as it is then the best approach to keep everybody happy is to have a "tick box" or "Allow/ Disallow" on settings>Preferences where you can decide if you want it by default or not the "Force Open" option.

In the same way you can select "Trailing Stops" or "1-click dealing".

 

How difficult is to implement this?

[hart]

That's Brilliant idea,FJMC

 

cheers hart

[HannahL]

Hi , thanks for your suggestion - the tickbox in settings to allow you to to choose your default option (always force open or never force open) is exactly what we are introducing in our new web trading platform!  Like you say, this will hopefully please everyone, no matter what their strategy, and if your preference changes then it is easy to update.

 

You can access the new web trading platform for spread betting accounts now by going to My IG > launch new platform (blue button).

 

Any questions/comments please keep them coming!

 

Thanks,

Hannah

[Tri]

@ Hannah  'I'd like to reassure you that there is no benefit to IG in causing 'force open errors', and this is why we'll always try to rectify it if possible.  This is also partly why we are now building in this functionality to the new web trading platform.  Thanks for your patience while this is done!'

 

Many thanks, Hannah , for your confirmation.

Could you please clarify thought that when a trader loses money, IG makes money and vice versa - if we are all successful in our trades, IG has to come up with the cash to pay, so it is not in IG's interest to have too successful traders.

IG makes the market. Just like a betting house, right?

 

If IG was a mere agent broker to place real trades on the real market  and profit only from commissions, then it would have not mattered if traders lose or make money. But as it stands at present, the more we lose, the more IG makes.

 

Could you please confirm the above? Or disagree with an explanation.

 

Thank you.

[donaldprice]

Hi Tri, spreadbetting companies dont need to bet against their clients since 80% (according to CME anyway) lose anyway. They hedge clients positions like any other broker. They are an execution only service. Their is always somebody taking the opposite side of the trade of you, example if you short EURO DOLLAR for £10 a point i may without knowing who you are, take the opposite side of that trade. The broker simply matches buyers and sellers, or the algos now. If shall we say you went long on BP shares and the broker or lets say the dealer finds a seller then his books are risk free. But sometimes you may not find that buyer or seller and therefore you take the opposite side of the trade and bingo you have your trade and are filled which is classic cooperate finance for you, perfectly legitimate, although this is less common as their are greater number of market participants.

 

I cannot imagine though this happening on FX, indices or commodities as they are very liquid markets and the execution is under a second. Their is no chance that the broker is looking at one client and watching him or her all day, when they have 10n;s of thousands of orders or trades happening each day if not much much more by many clients. It also is not cheap for brokers to get clients either since their are so many providers, all they be doing is chasing them to other institutions.

If you want to see true manipulation look no further than Barclays, Citi group and some of wall-streets popular banks who have purposely targeted clients stop-losses and result get fined several times the amount/vs the profit they made being dishonest.  

 

Dont let trading become personal, just focus on your trading, develop good ideas and manage risk. Every professional and retail trader will have winners and losers, nobody gets it right 100% of the time, its a mathematical impossibility. UBS and credit suisse recently lost a bad couple of  trades during the trump election, even George Soros lost money. Just look at the state of hedge funds in 2016 and the amount of money being pulled out. Banks have been in huge structural decline because of low rates and bad trades. 

 

Bottom line if something was happening behind the close doors, someone would quickly go to the FCA over at canary wharf and the FCA would have a field day. Difference between professional traders and retail is simple to sum up. Professionals put risk management over profit first and retail is the exact opposite. Leverage based products are great trading instruments, but unfortunately some dont understand how they work or trade ludicrous, unsafe and risky sizes and therefore you are just asking to get burned.  

[donaldprice]

Hear from the horses mouth, clearly explaining why they dont wish for clients to lose money.

 

 

[Tri]

@donald

I think we had similar discussion previously.

I'm afraid to note that you comment on issues that aren't the subject of my post to Hannah.

Risk management, 'something ...happening behind the close doors' as you put it, are all perhaps topics for other discussions.

 

You seem to believe that spread betting and trading in shares is exactly the same. As I said, we had a discussion previously, Spread betting is betting. There is no buy and sell, no buyers and sellers and no matching of orders. We all merely bet on the movement of the price, just like you can bet on the outcome of a horse race. When you bet on horses ( I've never done it, btw), you don't need someone else to take the opposite side of the trade, because clearly, there is no trade. It is betting.The loses that punters suffer is the gain for the betting house. There are occasions when the house may lose, e.g on Trump election.

Same with spreadbetting on market movements. There is no opposite side of a 'trade'. There are no trades involved.

 

I can see where the hedging may come to play though.

Suppose, FTSE100 goes down to 2000. Most likely, it will go up. If we all go long FTSE, we will most likely make money. IG will lose, so they may have to 'hedge' by placing actual trades on the real market, so they make money as well and give to the successful betters/traders.

Now, imagine, we short Ftse at 2000. Surely, we'll suffer losses. Will IG hedge? What for? Our loses goes in their P&L account.

 

Have  you noticed that some markets are closed for new trades? For example, the Greek banks. I think the reason is their very low prices. If you go long, you have very limited risk while the potential to gain is significant, that is, either IG will have to hedge by going themselves long, or simpler - simply block the bets , aka trades.

 

IG is an execution only broker for real in their stock broking and direct market access. Not on spreadbetting and CFD betting, though they may do CFD real trades as well (I don't know).

 

I am not having a go at them, it is simply that I seek clarity on how they operate the business. I was thinking the same like you when I first started with IG, but came to realise that was not the case.

 

I am eager to hear what Hannah has to say.

[hart]

 

cheers

hart

[HannahL]

Hi  et al, thanks for the follow up here - and thanks to  for your contribution and explanation.

 

Firstly, to clarify, IG do not bet against their clients as if a betting house, and all exposure is hedged - whether on the book or in the market.  The only exception here is with our binaries market, as the nature of how these are priced means we take client activity into account.

 

To go into more detail,  I understand your reasoning; 'spread betting' is not the same as investing in shares, but is instead speculation on the movement of a market.  You are 'betting' on a direction of movement, but this is as far as the meaning of this term lies, and does not mean IG are 'betting' against our clients.  We will take the majority of our exposure on our books: in an ideal world one client will net off exactly with another, and we will simply take the spread.  However, such an ideal world does not always exist, as we all know, and in these instances we will need to ensure we are adequately hedged in the market so as to avoid any exposure issues.  IG do not make money when our clients lose money, only when our clients trade.  It is in our interests to have happy clients who continue to trade with us, so it's important for us to clarify this point to prevent any misunderstanding!

 

With regard to some markets closed for new trades, such as Greek banks, this is not due to their underlying prices, but rather the concern around potential volatility and lack of liquidity should we need to trade in and out.  Again, wherever and whenever possible we want our clients to be able to trade - it is in our interests in terms of receiving spreads as mentioned above - but if there is too much perceived risk then we will mitigate this by temporarily suspending our market in that product.

 

I hope this provides the clarity you were looking for, but please let me know if you'd like further explanation.  This is definitely a much maligned area that we'd like to clear up, so thanks for bringing it up here!

 

Looking forward to hearing other responses too.

 

Thanks,

Hannah

[Tri]

Dear Hannah,

 

Thank you for your extensive reply!

It is interesting to see that IG does its business differently to all other spread betting companies, some of which have quite frankly addmitted that it is incresingly impossible to make money purely on spreads.

While I appreciate that your explanation must be mostly accurate, there is still a possibility that IG does benefit directly from clients' losses. You hedge your risk , you do it when you judge that there may be a risk. In the examples I've given in my previous post, there wouldn't be need to hedge, so the money traders lose will be IG's profit.

Anyway, I find your post very informative and I thank you for your continuing assistance.

We are all here to make money, IG does very well in this regard, most traders don't, but it's a learning experience, even though expensive, and we are glad that you implement changes in order to improve the trading/betting process and hopefully, our chances of success.

 

Kindest regards,

 

 

 

[HannahL]

Hi again , thanks for your reply.

 

I just wanted to clarify further regarding our hedging process.  We have a set amount of exposure we are happy to take 'on the book', and after this limit is breached, we will need to hedge trades in the underlying market.  If you are hedged, then any profit you make will be passed on from our hedged position, and any loss you incur will cover the loss of the hedged position.  If your trade has been taken on the book, then this is within our exposure limits.

 

I can completely understand the suspicion, and you may well be right regarding the other providers, so I'm more than happy to continue the discussion, and hear what others think too!

 

Thanks,

Hannah

[Tri]

Thank you Hannah!

You and I  are talking the same thing now - from a different perspective :  a glass half full or half empty respectively.

IG hedges its own exposure to risk. The risk that traders may make money or traders may lose money. IG's interest isn't the same as the traders'. These two interests may align at times but they always remain separate and often in conflict.

If IG were to be a true execution only broker, which isn't the case, then it wouldn't have to take any risk, wouldn't have to hedge, wouldn't take interest in traders' profit or loss but merely in the frequency and size of their trading.

IG's income comes not from spreads, but from overnight charges and traders' losses. Precisely because of this conflict of interest, IG has set up the system the way it is and , along with other spreadbetting companies, is alarmed at the expected changes coming from FCA.

[HannahL]

Hi again , thank you for the reply.

 

Apologies if I didn't explain myself completely clearly previously - there really is no 'IG vs client' scenario, with the exception of how we price some of our volatility products (binaries), as client sentiment is taken into account to do so.  However, with other markets, we can either net off long clients with shorts, and simply take the spread (and indeed any overnight charges), or we will have to hedge any exposure that breaches our pre-determined levels in the market itself.

 

The best thing for us is when clients trade, as you say, we can take the spreads, commissions and any charges.  We are a no-dealing desk (compared to a dealing desk) insofar as we offer prices and a bridge to liquidity providers, rather than taking the other side of your trade.  However, if we were to simply allow trades which netted off completely with existing ones, this would limit the amount of possible trades, hence why we have certain exposure limits and then go to market, so as to allow more clients to place the trades they want.  We do not profit when traders lose.

 

In the context of the FCA proposals, we are concerned that any restriction on leveraged trading will negatively impact our clients, potentially demanding a much more significant deposit or margin to trade, and thus reducing possibilities.  We completely agree with the need to protect retail clients however, and that is why we already offer Limited Risk accounts and guaranteed stops, so as to ensure the appropriate risk mitigation features are there for all.

 

Hope this clarifies further, but happy to answer any more questions if needed!

 

Thanks,

Hannah

[Tri]

There is no need to apologise, Hannah. I think you do make yourself perfectly clear.

 

And  you are right to say that the new FCA changes will limit possibilities. Possibilities to make money, but as 82% of the traders actually lose money, this will translate into 'limit possibilies to lose money'. These changes are long overdue...

 

I cannot accept your statement that IG does not make money when traders lose money. All your explanations lead to the contrary conclusion. I do not intend to be mean, I actually very much appreciate  your contribution here and kind assistance, but the sums simply don't add up.

[Guest Ray]

On 04/03/2017 at 03:58, HannahL said:

ther than taking the other side of your trade.  However, if we were to simply allow trades which netted off completely with existing ones, this would limit the amoun

 

On 12/01/2017 at 19:30, Tri said:

Also, say I have a short position already open and decide to open another short. There is no need to tick Force Open. However, in error, instead of sell I press on Buy, that is, going Long. Small handheld device or even on a computer, a momentary confusion... easy to touch the wrong button.

Then not only would I have a wrong trade, but that would have closed another trade.

 

As I said, Force Open is a trap. Whoever developed it did so with the intention to cause loss for traders, not for neting off. It is not fit for purpose and if one was to take it further, IG will surely lose a legal challenge over it.

 

Imagine that every time you sit in your car, before you turn the ignition on, you have to flip a fiddly switch somewhere, otherwise the tyres will deflate or you will be catapulted through the roof. No small print in Terms&Conditions can save the manufacturer in Court.

All I can say that this person Tri is a lousy and lazy trader who wants to find someone to blame for his lousy 'errors' and 'forgotten' jazz . And has too much time on hand to type all this ****. Netting off is intuituve to majority of humans and force open is an added feature for people looking to limit their losses who are wrong most of the times. Period.