Plus500 Share Discussion Threads

[sailing john] 27/3/2018 11:48

Re Swiss Franc - the issue then was lack of negative balance protection which is now in place for Retail Customers at all EU Regulated Providers. IGG etc. were exposed to Customers going negative and were obviously chasing causing stress to Customers who had been wiped out.

Which is why I can't understand why IGG and no doubt others are encouraging customers to take up Prof status where as far as I know they lose the very valuable and important negative balance protection.

PLUS might go down the Prof route but I expect them to differentiate with negative balance protection which will attract customers across from IG etc.

"sailing john - 19 Mar 2018 - 20:50:45 - 12686 of 12766 PLUS500 - CFD trading systems - PLUS
IG's Q3 this week? In addition to any Crypto comments the main point of interest to me will be the number of Professional Status sign ups.

IG Revenue as at November last year was split 5% Pro and 95% Retail! After IG's recent campaign to "invite" retail customers to move to Pro status, that split changed to 25% Pro and 75% Retail in January and their target is for over 50% Pro Revenue. (Pro status of course subject to Regulatory rules/hurdles)"

Today's announcement says reached 30% prof revenue and still targeting over 50% which they will probably achieve given need to switch still a couple of months off for CFDs.

[chucko1] 27/3/2018 11:46

I suspect FCA will be pretty well aligned with ESMA. Which is a good thing, as in the medium term, regulation of the current sort is a medium term positive for PLUS. At least that was the result from analysis of a similar regime of regulation experienced in the Japanese market.

You ought to have shorted IGG this morning. Or is that company not horrible enough for you?

[chucko1] 27/3/2018 11:34

pbutterworth, spot on. Their lower cost base, now there is lower leverage, will assist for sure. This is where their model is soooooooooooooooooo important in the medium term. And soon we will see how successfully (or not) that model has been expanded into the new license territories which is meaningful for future share price development.

I am not sure that ESMA have right things here, but there was a degree of inevitability about it all and I do not see any prospects of significantly tighter regulation from here. Mind you, recall the Swiss Franc debacle of just over 3 years ago. 16% move in one minute. Even a restriction to 30x leverage would not have been of much use there. But that was a truly rare beast that was not a pure market event.

[bobmonkeyhouse] 27/3/2018 11:32

Keep going.....i will take another short out very soon. Fca still to come. It will get smashed I think

[chucko1] 27/3/2018 11:19

Yes, the IGG statement was pretty sulky. What were they expecting? And what about all that bile voiced by IGG against PLUS a few weeks back. Makes me concerned about their management. It would have been far better to take a deep breath and say and do what CMC appear to be doing.

But more importantly, I was surprised that IGG would be negative growth this FY. So they relied to a far greater extent than PLUS on binaries and crypto (affected the most because of leverage constraints, and rightly so). But the wind was always blowing in that direction and it underlines Odey’s belief that PLUS is an underresearched/misunderstood stock (not sure I fully agree how ultimately important that is, but their point is worth noting, certainly).

[pbutterworth1] 27/3/2018 11:17

SPs real time %
IG (2.3)
CMC (2.2)
PLUS 4.9

PLUS is taking vol m/share away from the other two, and also has lower cost base. Expect some motoring here now

[pbutterworth1] 27/3/2018 11:13

Tue 27 Mar 2018 10:30
RNS Number : 0685J
CMC Markets Plc
27 March 2018

27 March 2018





CMC Markets Plc



ESMA Announcement





CMC Markets Plc ("CMC") notes the announcement by the European Securities and Markets Authority (ESMA) issued today.

ESMA's announcement introduces temporary product intervention measures on the provision of contracts for difference (CFDs) and binary options to retail investors. The measures announced today are largely unchanged from those proposed by ESMA in December 2017. The FCA expects to consult on whether to apply these measures on a permanent basis. The measures introduced include the following:-

1. A prohibition on the marketing, distribution or sale of binary options to retail clients; and

2. Restrictions on the marketing, distribution or sale to retail clients of CFDs, including rolling spot forex and financial spread bets as follows:



- leverage limits on the opening of a CFD position by a retail client between 30:1 and 2:1, depending on the volatility of the underlying asset;

- a standard margin close-out rule on a per-account basis;

- negative balance protection on a per account basis;

- a prohibition on firms offering monetary and non-monetary benefits to retail investors; and

- a standardised risk warning, including firm-specific figures on the percentage of clients that have lost money trading CFDs.



CMC is well prepared for these measures and through its proprietary technology, will ensure that they are implemented as required. Fair client outcomes have always been a focus of the Group, with account level margin close-out and standard risk warnings already in place throughout the Group, as well as negative balance protection being offered in certain countries.

Binary products generated £2.1m of revenues from the UK and Europe in H1 18 and therefore any reduction in revenue will be immaterial in a Group context.

Margin changes are likely to have an impact on how clients trade, although at this stage it is not possible to quantify the impact. However, CMC remains confident that its strategy of targeting high value, experienced clients that could be categorised as 'elective professionals', puts it in a strong position to manage regulatory change.

[pbutterworth1] 27/3/2018 11:13

HL: 27/3

REGULATORS CONFIRM CRACKDOWN ON CFDS, FOREX AND SPREAD BETS
(ShareCast News) - European and UK financial regulators have confirmed new restrictions on brokers, including IG Group, CMC Markets and Plus500, from marketing, distribution or selling binary options and spot forex trading and financial spread bets.
Having warned of the measures in December, the European Securities and Markets Authority on Monday said it will prohibit the marketing, distribution or sale of binary options to retail clients and restrict the provision of contracts for difference (CFDs) in order to protect retail investors from what are seen as highly complex financial products.

The measures are temporary but are likely to be renewed and there will be a consultation over making them permanent, the UK's Financial Conduct Authority said, having found that 76% of retail customers who bought CFD products lost money.

Restrictions on CFDs will also include rolling spot forex and financial spread bets, with CFD leverage on the opening of a position to be limited to between 30:1 and 2:1, depending on the price volatility of the underlying asset. In December, ESMA had suggested limits between 30:1 and 5:1.

CFDs will also have a 50% margin close-out rule applied on a per account basis, together with a negative balance protection, limiting retail clients' liability to the funds in their CFD trading account.

Firms will be prohibited from offering monetary and non-monetary benefits -- excluding research and information tools -- to retail investors; and all firm will need to give a standardised risk warning, including firm-specific figures on the percentage of client accounts that have lost money trading CFDs.

The regulator will publish an official notice on its website in coming weeks, giving firms one month to implement the prohibition on binary options and two months for the restrictions on CFDs.

Product intervention measures will have an initial duration of up to three months, ESMA said, after which the measures may be renewed, with the FCA saying

The UK's Financial Conduct Authority said it expects to consult on whether to apply these measures on a permanent basis to firms offering CFDs and binary options to retail clients.

In January, the UK regulator warned that many City brokers providing CFDs to retail investors were causing "serious concern" and said it saw a "high risk" that many firms were not meeting its rules and expectations in providing and distributing CFDs, indicating a "serious risk of harm" for consumers.

Over a 12-month review, the FCA found 76% of retail customers who bought CFD products on either an advisory or discretionary basis lost money.

[sailing john] 27/3/2018 10:47

CMCX statement out
Not copied IGG with their sulk!
Short statement - we mostly comply and will adapt as required
Much more sensible

[poolefox] 27/3/2018 10:43

Chucko I think it was mainly a hedge against their huge bet on Plus500 over 10% of the fund although they have been pointing out that Plus doesn't offer binary options or negative cash balances and with their nimble technology are quick to adapt to any changes.They must be preparing to announce Q1 results given ESMA is out of the way now

[chucko1] 27/3/2018 10:31

Poolefox, perhaps it has only just dawned on some that IGG had binaries as a product offering whereas PLUS did not. They might have been wiser had they read the less idiotic posts on this BB!

Relative move on the day now 8.8%. Maybe Odey buys back part of its short on IGG. It was likely there as a “Regulation221; hedge, the effect of which is now arguably partly in the respective share prices.

[burn248] 27/3/2018 10:01

Up on good volume!! Shorts closing?

[poolefox] 27/3/2018 09:40

Looks like Odey Absolute return strategy of long plus500 short IG is starting to pay off! IG down 8.46%

[bulltradept] 27/3/2018 09:32

From IG:

Outlook

The Company is pleased that the uncertainty around the nature and extent of regulatory change in the UK and EU affecting the industry has been removed by this announcement. IG has delivered a sustainable business for more than 40 years by placing good client outcomes at the heart of everything it does. IG will continue to lead the way in the industry, and the Company is better placed than most, if not all, providers in the industry to respond to regulatory change.

The Company expects that its revenue in FY19 will be lower than that expected in FY18, primarily reflecting the impact of the regulatory changes in the UK and EU. In addition, as previously set out, the Company's revenue in FY18 year to date has benefitted from the volume of client trading in cryptocurrencies which is unlikely to be as strong in the next financial year.

Demand for the products and services offered by IG is strong, and growing and the Company expects to return to growth after FY19. The Company will continue with the investments that it is making to deliver future growth and to benefit from the underlying strong demand for its products across the world. The Company will discuss its opportunities for growth, including in new geographies and from new products, and the factors that it believes result in sustainable revenue and attractive operating margins, at its Capital Markets Day on 23 May 2018.

[nurdin] 27/3/2018 09:28

We need a statement from PLUS now to give us a boost

[sailing john] 27/3/2018 09:19

IG statement out - A bit dour!
But then they haven't doubled their customer numbers in Q4!
GL - SJ

[nurdin] 27/3/2018 09:08

was convinced we would be well past £11 by this time....ah well

[sailing john] 27/3/2018 09:04

Amusing watching trades for a minute or two. Bot algos struggling to decide which way to go! Probably overheating especially if they are crypto mining at the same time! lol
No doubt the big boys will take a day or two to decide and then sign off their strategy.
GL - SJ

[noujay] 27/3/2018 08:38

Glad that's out in the open now see how it's been trading

[aakash30] 27/3/2018 08:35

Spreadbet is a UK only product and regardless plus doesn't offer it. Also ESMA doesn't cover UK, FCA may follow ESMAs lead (possibly with all this applicable to spread bet) or have separate regs.

[hatfullofsky] 27/3/2018 08:29

No restrictions on Spread Betting just CFD's ?

[aakash30] 27/3/2018 08:22

Ahh missed the buying op too...I think the one positive (for the short term) is that they didn't ban crypto which was within realm of possibility. Now that uncertainty out of the way onward and upward

[pbutterworth1] 27/3/2018 08:16

If one had been very fast this am (I was not) there was a bargain to be had first thing

[pbutterworth1] 27/3/2018 08:13

Might be an excuse for an rns here

[sailing john] 27/3/2018 08:11

As usual a slight opening panic from Mr M despite slight back pedaling on margin close out rules and no crypto ban though pretty tight at 2:1. On offer at 990 after the bell! now blue 1063!
GL - SJ