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Online Share Trading

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Something Strange at GT

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dookie
Regular Contributor
I heard rumours that Standard Bank was working on a new platform for share trading, similar to the forex one they have - wouldn't that be fabulous!! But alas, I have given up counting the sleeps. So I opened an account with GT. Not a bad platform - it's all about intraday candle charts for me - the quicker, prettier and more customisable, the better. Last time I checked, Easy Trader was struggling a tad and not so easy at all actually. GT also has nice things like Rand / unit (USD) CFDs on commodities as opposed to derivatives over the rand price of the commodity. Very different beasts and the former a way better prosepect in my mind. Well, with my third deposit to GT I smell a rat. The first two deposits showed up in my account, the third (largest of the three, but hardly a prince's ransom) did not. The EAP was made around 5am in the morning on Friday, SB sent them payment confirmation a few minutes later. Standard Bank to Standard Bank is instant? I thought so. It never turned up on my GT trading account. By Friday afternoon 17h00 when I called them for the second time, they denied receiving the payment in their SBK account. I think they're lying... This is not encouraging, especially considering Friday afternoon's wild market action on gold and the USD and having read something like: http://www.fin24.com/Finweek/Cover-Story/Mark-Barnes-previously-rich-and-famous-20110117 I had read it before opening the account - but dammit... I want those charts! Any suggestions where one can get nice ones? Anyone using Sharenet?
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26 REPLIES 26
Ninja
Super Contributor
Dookie, try igmarkets.co.za or igindex .co.uk......best trading platform in the modern world, end of discussion.
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Not applicable
OK, I am not a fan of GT nor IG, but each to their own, and IG's facilities cannot be beat, anywhere (I keep an account open with them for charts access). With both these companies, and GT especially, I would caution how much capital you leave in their accounts. GT's holding company, Purple, has yet to post profit - and now they are venturing into the gaming industry as well. It is twice now that I have seen such companies go bust - and the poor traders lose everything - every last cent in the trading account.
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dookie
Regular Contributor
Ah... Okay. Tx. I saw IG's platform and thought it looked quite lekker.
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dookie
Regular Contributor
Ja. Exactly. I closed the account with GT. Will see if they give me my couple of cents back lol. With CFD's one has none of the protection you get from the JSE if you trade listed instruments through one of their members. (I see Australia has exchange listed CFDs... Interesting.) Someone tells me CJS Brokers here in JHB has a great trading platform & charts. I think I'll go take a look.
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SimonPB
Valued Contributor
the thing with CFD's is that you take counter party risk .. so it is critical that you make very very sure you trust your counter party and that they are big enough to survive a blow up from a client or 4 .. also make sure that they haven't just ring fenced any potential problem .. and yes finding this info may be hard, nice wordss don't crack it .. in which case the answer is easy ..
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Not applicable
Hi Simon, I have been meaning to unpack this concept of counter party risk for some time. Perhaps you can answer this for me? If my counter party goes belly up - what is the downside for me? Sure, I lose my position, but so what - my margin is in tact (assuming it can't be attached to my counter party's debts), and if the counter party owes me profit - since I am marked to market, my margin will have been adjusted at the end of the day, is it is just the current day's action that is really at risk. So my risk is what, exactly?
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SimonPB
Valued Contributor
nope .. if counter party goes belly up your money (margin, profit, cash) sitting with them is now part of their assets to be distributed to debitors .. so you stand right at teh back of the line and submit your claim .. that's the thing, with a JSE traded product you get JSE/SAFEX protection for your positions/cash .. with CFD's (or any OTC product) you don't ..
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THRESHOLD
Super Contributor
Even worse - the executor my have a claim against you for interest on the contract for the duration of the winding up process - but you get to stand in line as a concurrent creditor and hope for a few pennies on the rand!
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dookie
Regular Contributor
Phew.... Luckily my deposit turned up in my GT account this morning. Now just waiting for it to come back home to my bank account :-)
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Not applicable
Well, that then creates an even worse case scenario. If the executor has a claim against you, then why would he not have a claim against you for the entire contract. i.e. if your stock price falls, but you are unable to unwind the position, because your broker is broke (no pun), then could the executor make a margin call on you? Even though you no longer have the ability to get out of hte contract - i.e. sell? That would be a pretty serious consequence?
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THRESHOLD
Super Contributor
It's in the conract wording. Its incumbent upon the executor to exercise due care (and skill) to mitigate the loss to you (and all parties.) That said; you will pay interest on your exposure until the position is cleared on your behalf (at market, no doubt)and your entitlment to interest on your initial margin is severely curtailed. Hopefully loss is limited to the inital margin deposit.(?) But my real point is that its the potential risk thats interesting - and never highlighted. If the counterparty is a big bank - it really makes little difference - but where one is dealing with a little broker...
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dookie
Regular Contributor
yipeee... Money in the bank :))))
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Not applicable
For forex I went to Oanda as they have the only decent forex client for Android telephones. And they're not half bad.
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gamma_spike
Frequent Contributor
IG markets pricing on certain JOSI40 CFD's is way off wack cause they hedge off of their UK book... a bit of a hammering for SA traders. The BS about local trader platforms putting the trader at credit risk when they have been trading for >10yrs is a joke. Standard Bank (with due resepct)is infering that clients have to pay higher comms in order to protect themselves against a low probability default... when they have a demostrated track record of getting naileed by SSF corners etc...
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Ninja
Super Contributor
Agreed, I only trade DJI/Ftse and Forex through IG - spread is 1 point on ftse and 2 on the rest - very affordable. In terms of creating fear around 3rd party risk it is the best way for an incompetant platform such as OST to desperately hang on to its uninformed traders as they are ripped off with exhorbitant costs and frankly pathetic trading platform.
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SimonPB
Valued Contributor
in the last 10 years I have seen 3 CFD houses go bust .. in each case every client lost everything .. now you may say the risk is small, but then you fail to understand risk .. it is not about how likely it is that it'll happen, but more about how bad it will be if it does happen ..
as for hedging out of the UK, well maybe, but the price is the price .. and if it isn't then the price is being shaded, and trust me it is not being shaded in your favour ..
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SimonPB
Valued Contributor
dude, do you really believe that .. or have you been drinkin early ?? the risk is real, ask clients of finsport, CFD Europe/Uk and Dealstream .. all very real ..
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Ninja
Super Contributor
Simon, agreed, there is risk but the risk to me of losing everything cause my platform is inept is far more likely than because a trading house like IG who has been around for decades goes bust. As a trader we live with risk, I cannot live with high costs and low performance. What happens if you own a position on CFD position on the top 40 / ftse 100 and it goes bust overnight.....you lose everything and more than was in your account to start with....how do you avoid this risk? The group has assets of R14B and R1.4B cash - isnt the risk of this broker going bust similar to the risk of your blue chip SSF going bust overnight? At a glance IG Markets is one of the world's largest and longest established providers of leveraged retail derivative products IG Group employs over 800 staff around the world The group's various companies process over one million transactions a month, over 90% of which are online IG Group is currently valued at over R17 billion which ranks the group just outside the FTSE 100 The group has total assets of R14 billion, and own cash of R1.4 billion, as at 31 May 2009 IG Markets in the UK is regulated by the Financial Services Authority (FSA) and has an exemplary record with the authority as a respected financial derivatives provider.
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SimonPB
Valued Contributor
Agreed that trading is risk, but I want to remove as much risk as possible, hence want counter party risk as small as possible .. and I don't trade stocks for just the reason you mention, going bust overnight .. I only trade indices so I have a lower risk (that being a market crash, and I don't hold ASI futures over night) .. I also manage my risk so even a crash going against me if I was fully in wouldn't wipe me out .. whereas a counter [party collapse would wipe out my trading portfolio ..
And yes platform and costs are critical, but considering what I trade (ALSI futures and CFD's on a few STX products) .. OST has cheapest ALSI futures and cheap CFD's .. Are the charts great, nope .. But they meet my requirements (with one exception being bug that can't 'see' yesterdays data still not fixed) ..
IG, sure the group has impressive stats to show (albeit small when compared to SB) .. but here's the Q I always have had and have no answer (and I have no answer as I have never bothered to find out). Is the local arm a separate legal entity (certainly it is as a subsidiary??), and then if they take a massive hit will the parent step in a bail them out or walk away ?? The answer they will give is useless the only test would be if it happened .. so there's your unknown/risk .. you can take it or leave it, but you can't pretend it doesn't exist ??
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