global trader

[#1]

Guys, how safe is your money if it sits in a global trader account? I mean, if purple capital folds, (R60m loss makes this a possibility), what happens to traders with open accounts with them? I remember reading about people that lost their trading accounts at global trader UK, when that went belly up

[#2]

mmm interesting, im also with GT so if anybody has any info please comment

[SimonPB]

as an example, check what happened to their UK/Euro operation .. bottom line is that you have counter party risk .. with a JSE registered broker the JSE will step in to remove the counter party risk ..

[asylum]

what are you saying in plain english please for us dof okes.

[SimonPB]

if they go bust - byebye money (gt uk/euro and dealstream as example) .. if you are with a registered jse/safex broker (an the real deal, not like dealstream claimed to be) .. then the jse guarantees the monies/shares .. this is a real (albeit small) risk that most people just ignore, until they have to say byebye to their money ..

[topgun]

GTSA do not trade for their own account. The UK disaster was inherited on acquisition and they learned valuable lessons, tightened up on their limits and credit criteria. They also did not suffer any client defaults during the recent market turmoil, which is quite an achievement. Debt on the Purple balance sheet will be down to R11.3m by June - following recent and impending asset sales /divestitures. So, although you do take on their credit risk, GFSA's risk profile has improved drastically since Oct and with less competition and new products, I think the operation is fairly safe. omo

[SimonPB]

topgun, sure .. till it isn't ..

[#8]

Simon do you know how we can verify which brokers are backed up by the jse?

[#9]

There are two issues here. The first is your money in the GT account - this is held by Investec, so your security lies in investec's solvency. The second issue is your open trades. This unfortunately, for any CFD is not secured outside of hte contract you have with GT247 (or ideal CFDS or any other). With an SSF, you have the JSE offering the guarantee.

[#10]

I just do not see the point of anyone trading with more than 100K with CFDS or SSF account ! Guess man ... for 10 to 100x gearing what more do you want ??? Just trading this instruments with 5 k will give you a 50 k underlining ... not to say what a 100 k will do! ahh will thats MO

[#11]

My point is I would not use more than 5% of my investment with these instuments ... So where does the risk lie ??? The trader trading them!!!

[#12]

good point Hennie, you might lose your gains but your initial capital outlay has minimal risk. Simon, this would all be a moot point if there were improvements in the manner in which we could trade derivatives in OST - i.e. reliable warrant stoplosses, realtime entry & exit for SSF's and a waiver of the flat brokerage fee man - you guys are already making comms in the shading! (undisclosed?)

[SimonPB]

http://webapps.jse.co.za/brokerlookup/lookup/search.htm

[SimonPB]

comm in the shading ?? what you talking about ?? what's undisclosed ?? the pricing of the SSF's is well disclosed and there is no shading ..

[SimonPB]

the dealstream money was with investec - gone .. the cfd people who went bust back in 2001 had the money with nedbank - gone .. gt uk/euro had the money in a third party account - gone .. read the small print ..

[SimonPB]

and ssf's are real time entry .. if we can match it in the open market, you trade .. if not you go bid or offered ..

[#17]

Hi Simon, sorry, but I think you do have shading, because you have the market maker comms built in on the SSF on the bid and ask price. I say it is undisclosed because all info that I can find on it lies in a sample excel spreadsheet that used to be in the education session - there the comms were hinted at 0,4% either way. This is not confirmed anywhere though.

[SimonPB]

well i suppose it depends how one defines shading .. shading is hiding comm .. to my mind .. as for the 0.4%, I disagree, tis disclosed everywhere in the literature ..

[SimonPB]

for example (from the OUTSIDE of the website)
Costs :
SSF trades incur the following costs:

Flat brokerage rate of R60 + VAT per trade
Market makers commission of 0.4% of the underlying exposure.
The commission is already included in the SSF Bid or Offer price that is displayed.

[Stij]

So if the Satrix Investment Plan administrators are not on this list (AOS - Automated Outsourcing Services), does that imply that Satrix shares held through the investment plan are not guaranteed if the administrators go belly up? They are registered with the FSB but does that add any guarantees?