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Old 12-11-2012, 10:16 AM   #1

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Scam or Fraud or Stupid Me?

Hello guys this is my first thread in TL. So i had this incident yesterday and i as newbie saw profits and wanted to cash in but it went like this


At 19:24:49 yesterday (10th December) you sold 2/pt of Daily Brent Crude (Jan) to open at 10723 with no stops or limits. The last rollover time is 19:15 and the market expires at 19.30. Settlement is basis the official closing price of the relevant ICE Brent Crude Oil future. After expiry the initial position is closed and a new position is opened at the closing price +/- 1pt (2 pts for Controlled Risk). Adjustment will occur when the underlying future changes, as was the case last night (10th December) when the front month future was changed from January to February.

Your account is setup for all daily future bets to rollover at expiry. Therefore at 19:30:29 when you attempted to close the position online you were unable to do so as the market was in the process of rolling over to the next day. At this point we were also changing the front month from January to February. It is possible that whilst the front month was being changed for a split second online the profit on the position may have being valuing basis the price of the February contract as opposed to the January contract.

You called the desk at 20:09:52. At the beginning of the call you ask the dealer to close the contract basis the price you see which displays profit in the region of 190.

The dealer then goes away to check the price and returns to inform you that the price you are seeing is invalid and that the position is in the process of rolling and the front month is being changed. He explains that when the front month contract is changed, when a daily position rolls the spread you pay remains the same but the difference in the absolute levels will change due to the difference between the fair value of the respective contracts. He explains that this is what has happened in this instance. Towards the end of the conversation you state you are now able to deal on the contract online. Your request to close the position at the beginning of the call was under the premise that it be done at the level which would realise you in the region of 190 profit, which the dealer informs you is not possible, hence nothing was done. The call ends at 20:16:18 and you then buy back 2/pt to close the position online at 10623 in the February contract at 20:17:25, moments after the call ends.


To conclude, the evolution of the bet was as follows:

10 Dec 19:24:24:49 GMT you sell 2/pt to open of the Daily Brent Crude (Jan) contract at 10723.

10 Dec 19:30:29 GMT you attempt to buy back 2/pt to close at 10748 but the order is rejected as the market is offline due to it being rolled and the front month being changed from January to February.(how do they know what i was wanted to do?

10 Dec 20:11:50 GMT the position rolls. Your position is closed out at 10733 on the January contract, realising a loss of 20, and simultaneously reopened on the February contract, short 2/pt at 10620.

10 Dec 20:17:25 GMT you close this position online, buying 2/pt to close at 10623, realising a loss of 6.


So after all this should i be the beneficial of this changes and market move? To me it seems like i was duped feels like whey was roll overing my position instead taking 2-pts they took 100-pts and was ripped. Please clear my confusion with one guys if u know what happened.

Thank You
A.Z
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Old 12-12-2012, 07:06 AM   #2

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Re: Scam or Fraud or Stupid Me?

Quote:
Originally Posted by Brolizzz »
Hello guys this is my first thread in TL. So i had this incident yesterday and i as newbie saw profits and wanted to cash in but it went like this


At 19:24:49 yesterday (10th December) you sold 2/pt of Daily Brent Crude (Jan) to open at 10723 with no stops or limits. The last rollover time is 19:15 and the market expires at 19.30. Settlement is basis the official closing price of the relevant ICE Brent Crude Oil future. After expiry the initial position is closed and a new position is opened at the closing price +/- 1pt (2 pts for Controlled Risk). Adjustment will occur when the underlying future changes, as was the case last night (10th December) when the front month future was changed from January to February.

Your account is setup for all daily future bets to rollover at expiry. Therefore at 19:30:29 when you attempted to close the position online you were unable to do so as the market was in the process of rolling over to the next day. At this point we were also changing the front month from January to February. It is possible that whilst the front month was being changed for a split second online the profit on the position may have being valuing basis the price of the February contract as opposed to the January contract.

You called the desk at 20:09:52. At the beginning of the call you ask the dealer to close the contract basis the price you see which displays profit in the region of 190.

The dealer then goes away to check the price and returns to inform you that the price you are seeing is invalid and that the position is in the process of rolling and the front month is being changed. He explains that when the front month contract is changed, when a daily position rolls the spread you pay remains the same but the difference in the absolute levels will change due to the difference between the fair value of the respective contracts. He explains that this is what has happened in this instance. Towards the end of the conversation you state you are now able to deal on the contract online. Your request to close the position at the beginning of the call was under the premise that it be done at the level which would realise you in the region of 190 profit, which the dealer informs you is not possible, hence nothing was done. The call ends at 20:16:18 and you then buy back 2/pt to close the position online at 10623 in the February contract at 20:17:25, moments after the call ends.


To conclude, the evolution of the bet was as follows:

10 Dec 19:24:24:49 GMT you sell 2/pt to open of the Daily Brent Crude (Jan) contract at 10723.

10 Dec 19:30:29 GMT you attempt to buy back 2/pt to close at 10748 but the order is rejected as the market is offline due to it being rolled and the front month being changed from January to February.(how do they know what i was wanted to do?

10 Dec 20:11:50 GMT the position rolls. Your position is closed out at 10733 on the January contract, realising a loss of 20, and simultaneously reopened on the February contract, short 2/pt at 10620.

10 Dec 20:17:25 GMT you close this position online, buying 2/pt to close at 10623, realising a loss of 6.


So after all this should i be the beneficial of this changes and market move? To me it seems like i was duped feels like whey was roll overing my position instead taking 2-pts they took 100-pts and was ripped. Please clear my confusion with one guys if u know what happened.

Thank You
A.Z
Perhaps you should consider trading in the underlying futures market rather than using spreadbetting - the tax relief might appeal, but in the long run the spread and "execution irregularities" will kill you. If you traded futures and made money then you could get a tax expert to investigate ways of protecting your profits.

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Old 12-13-2012, 11:03 AM   #3

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Re: Scam or Fraud or Stupid Me?

Hi Brollo
"You was robbed"
But I think the moral of the story is , unless you work on a particular market , you cant wait till the last minute to close a deal. Especialy if its an unregulated market like Spreads.
And just to raise a few eyebrows, spread betting is gambling.
Whats wrong with buying a nice big bank like Goldman and just follow the trend. ?
regards
bobc
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Old 12-13-2012, 12:10 PM   #4
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Re: Scam or Fraud or Stupid Me?

Quote:
Originally Posted by Brolizzz »
To conclude, the evolution of the bet was as follows:

10 Dec 19:24:24:49 GMT you sell 2/pt to open of the Daily Brent Crude (Jan) contract at 10723.

10 Dec 19:30:29 GMT you attempt to buy back 2/pt to close at 10748 but the order is rejected as the market is offline due to it being rolled and the front month being changed from January to February.(how do they know what i was wanted to do?
If you are short, and the roll is automatic, then you will be short the next month. If you dont roll yourself or close out then thats all they can do - this makes perfect sense for all involved. You keep the same exposure.

Quote:
Originally Posted by Brolizzz »

10 Dec 20:11:50 GMT the position rolls. Your position is closed out at 10733 on the January contract, realising a loss of 20, and simultaneously reopened on the February contract, short 2/pt at 10620.

10 Dec 20:17:25 GMT you close this position online, buying 2/pt to close at 10623, realising a loss of 6.


So after all this should i be the beneficial of this changes and market move? To me it seems like i was duped feels like whey was roll overing my position instead taking 2-pts they took 100-pts and was ripped. Please clear my confusion with one guys if u know what happened.

Thank You
A.Z
Look up Contango and backwardation.
You need to understand this - there was no market move (at least to the extent you think)
Plus if you do the math (s) you say 'they' took 100 points and yet you only lost 13 points.

I suggest you understand the rolling process and that way you wont think either you are stupid, OR that they ripped you off.

Basically it looks like
Jan contract you sold 10723 and AS PART OF THE ROLL bought back to close at 10733
Feb contract AS PART OF THE ROLL you sold to open at 10620 then closed out at 1623

your account reflect this. period. The only thing you might want to look at is the change in the spread between Jan and Feb over the last few days. Otherwise it looks nothing strange here, except that you thought you could close out or roll at a time the market was effectively closed.
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Old 12-13-2012, 01:40 PM   #5

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Re: Scam or Fraud or Stupid Me?

Quote:
Originally Posted by bobcollett »
Hi Brollo
"You was robbed"
But I think the moral of the story is , unless you work on a particular market , you cant wait till the last minute to close a deal. Especialy if its an unregulated market like Spreads.
And just to raise a few eyebrows, spread betting is gambling.
Whats wrong with buying a nice big bank like Goldman and just follow the trend. ?
regards
bobc
All derivatives trading is gambling. Spread-betting differs only in the details, in exactly the same way as the details differ between options and futures, cmos and cdos, bonds and swaps, etc etc.

With all of the above, it's crucial to understand the details and how they impact upon your chances of success. Sometimes the impact can be minimized. For instance, which would you prefer - 60k profit in futures, or 40k profit in a spreadbetting account? Unless you know a good tax lawyer, it's a no-brainer. So the only question is, can you make 40k as easily spread-betting as you can make 60k trading futures? To answer that you need to know the details of how each one operates.

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Old 12-14-2012, 12:30 AM   #6

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Re: Scam or Fraud or Stupid Me?

Thank You guys for clearing this one for me out.

Yes this is a gamble for some for others a job, career etc. We all know the good and the bad bit of it

Blackhorseshoe i do understand that i should try underlying futures market.
What i was focusing more is the flow off some certain markets like Daily brent or EUR/USD.
To get to know charts and scalp when i see a chance to make some profit..
For me Futures market still unknown.
I'm kinda very uncomfortable to make predictions on my own reasoning but it could be my demise if i wont try more frequent.

Is binary options worth a go? Or stick with original Futures better?

Again Thanks for reply guys really appreciate.


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Old 12-30-2012, 05:58 PM   #7

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Re: Scam or Fraud or Stupid Me?

Quote:
Originally Posted by Brolizzz »
Thank You guys for clearing this one for me out.

Yes this is a gamble for some for others a job, career etc. We all know the good and the bad bit of it

Blackhorseshoe i do understand that i should try underlying futures market.
What i was focusing more is the flow off some certain markets like Daily brent or EUR/USD.
To get to know charts and scalp when i see a chance to make some profit..
For me Futures market still unknown.
I'm kinda very uncomfortable to make predictions on my own reasoning but it could be my demise if i wont try more frequent.

Is binary options worth a go? Or stick with original Futures better?

Again Thanks for reply guys really appreciate.


Brolizzz
Hi Brolizzz,

I'm afraid I'm not qualified to offer you any specific trading advice or tell you which derivatives you should be trading. My recommendation (to you and all other traders) is simply that you ensure that you are fully cognizant of how the execuition foibles of a particular derivative impact upon your strategy's perfomance. You should be able to put a pretty certain figure to this, not a broad estimate.

For an example of what failure to fill limit orders can do to a strategy, take a quick look at the perfomance reports in post #50 here: http://www.traderslaboratory.com/for...r-enemy-7.html

Hope that's helpful,

BlueHorseshoe
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Old 12-30-2012, 07:18 PM   #8

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Re: Scam or Fraud or Stupid Me?

Quote:
Originally Posted by Brolizzz »
Hello guys this is my first thread in TL. So i had this incident yesterday and i as newbie saw profits and wanted to cash in but it went like this


At 19:24:49 yesterday (10th December) you sold 2/pt of Daily Brent Crude (Jan) to open at 10723 with no stops or limits. The last rollover time is 19:15 and the market expires at 19.30. Settlement is basis the official closing price of the relevant ICE Brent Crude Oil future. After expiry the initial position is closed and a new position is opened at the closing price +/- 1pt (2 pts for Controlled Risk). Adjustment will occur when the underlying future changes, as was the case last night (10th December) when the front month future was changed from January to February.

Your account is setup for all daily future bets to rollover at expiry. Therefore at 19:30:29 when you attempted to close the position online you were unable to do so as the market was in the process of rolling over to the next day. At this point we were also changing the front month from January to February. It is possible that whilst the front month was being changed for a split second online the profit on the position may have being valuing basis the price of the February contract as opposed to the January contract.

You called the desk at 20:09:52. At the beginning of the call you ask the dealer to close the contract basis the price you see which displays profit in the region of 190.

The dealer then goes away to check the price and returns to inform you that the price you are seeing is invalid and that the position is in the process of rolling and the front month is being changed. He explains that when the front month contract is changed, when a daily position rolls the spread you pay remains the same but the difference in the absolute levels will change due to the difference between the fair value of the respective contracts. He explains that this is what has happened in this instance. Towards the end of the conversation you state you are now able to deal on the contract online. Your request to close the position at the beginning of the call was under the premise that it be done at the level which would realise you in the region of 190 profit, which the dealer informs you is not possible, hence nothing was done. The call ends at 20:16:18 and you then buy back 2/pt to close the position online at 10623 in the February contract at 20:17:25, moments after the call ends.


To conclude, the evolution of the bet was as follows:

10 Dec 19:24:24:49 GMT you sell 2/pt to open of the Daily Brent Crude (Jan) contract at 10723.

10 Dec 19:30:29 GMT you attempt to buy back 2/pt to close at 10748 but the order is rejected as the market is offline due to it being rolled and the front month being changed from January to February.(how do they know what i was wanted to do?

10 Dec 20:11:50 GMT the position rolls. Your position is closed out at 10733 on the January contract, realising a loss of 20, and simultaneously reopened on the February contract, short 2/pt at 10620.

10 Dec 20:17:25 GMT you close this position online, buying 2/pt to close at 10623, realising a loss of 6.


So after all this should i be the beneficial of this changes and market move? To me it seems like i was duped feels like whey was roll overing my position instead taking 2-pts they took 100-pts and was ripped. Please clear my confusion with one guys if u know what happened.

Thank You
A.Z
you might want to locate mitsubishi. he is the professional spread betting gambler of the lot here. i am quite sure he can tell you exactly what happened and what you need to look at doing in the future. he might be hard to find as he disappears sometimes but he'll be back....just keep looking.
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