This applies to any broker promoting "reduced spreads" that are variable.
GFT told me they have lowered their spreads to as little as 1. That is true. The problem is the spreads are variable. You only get a smaller spread when you exit the position at the same or lower spread than you entered it at. If you enter a position when the spread is 1 then exit when it is at 3, your spread is 3.
I have noticed decreased spreads at times when their is no movement in the price (no activity, price stuck in tight range).
I have noticed the spreads increase at times when the opportunity for gains are better (good movement in price, good momentum, analyticals look good to enter a position).
Don't be duped into believing you are getting a deal on variable spreads. If the high end of the variance is 3,4,5,6 or whatever, you should assume that is what your spread will be.
It is like a stock brokerage telling you they have lowered their commissions to as little as $5.00 then, once you are holding a position they decide to charge you $15.00 to get out of it.
I consider this a misleading marketing ploy. Does anyone know if there have been any complaints filed with the National Futures Association regarding this?
GFT told me they have lowered their spreads to as little as 1. That is true. The problem is the spreads are variable. You only get a smaller spread when you exit the position at the same or lower spread than you entered it at. If you enter a position when the spread is 1 then exit when it is at 3, your spread is 3.
I have noticed decreased spreads at times when their is no movement in the price (no activity, price stuck in tight range).
I have noticed the spreads increase at times when the opportunity for gains are better (good movement in price, good momentum, analyticals look good to enter a position).
Don't be duped into believing you are getting a deal on variable spreads. If the high end of the variance is 3,4,5,6 or whatever, you should assume that is what your spread will be.
It is like a stock brokerage telling you they have lowered their commissions to as little as $5.00 then, once you are holding a position they decide to charge you $15.00 to get out of it.
I consider this a misleading marketing ploy. Does anyone know if there have been any complaints filed with the National Futures Association regarding this?