The world of spread betting has caught iPhone fever. In October, the first Apple-approved spread betting application for the iPhone was launched by City Index.
The application, which allows spread betters to place trades and orders as well as monitor existing positions, has already achieved its year-end target of 10,000 downloads through the Apple iStore.
Rival spread betting firms have also got their eye on the iPhone trading market. Apple is reviewing provider GFT’s new DealBook for iPhone application and expects that it will be approved this month.
“We’ve had a lot of demand from our clients for a fully integrated iPhone application. More and more traders don’t spend all their time at their desk, so we’ve tried to make it as robust as our normal trading platform,” says Tim Gort of GFT.
Although it has not been officially approved by Apple, IG Index introduced a browser-based mobile service last year that allows clients to access its PureDeal spread betting platform via the iPhone and other web-friendly devices.
All the mobile trading platforms allow traders to check the latest prices, open and close positions, set stop-losses, view watch lists as well as creating new and amending existing orders.
Mobile access to spread betting platforms has been available for a number of years, but the function has gained popularity through the advent of large-view touch-screen formats.
The onset of the global financial crisis and the volatility that ensued has also left traders keen to keep a constant watch on their investments.
Kareem Khouri, managing director of Killik Capital, says that being able to react wherever you are is important for traders who use execution-only brokers.
According to City Index, over the past six months, trades placed on a mobile device have more than doubled from 3.22 per cent to 6.67 per cent.
Of all trades placed on mobiles, 40 per cent are now being placed on City Index’s iPhone application, says the company’s Joshua Raymond.
“This shows how mobile dealing is growing and that spread betters are rapidly viewing it as another tool to ensure they are on top of the markets whenever they want, wherever they are,” he says.
However, brokers admit mobile trading platforms do not yet offer traders the full functionality of a traditional computer.
City Index’s iPhone application does not offer charting or news flow, key tools for traders.
Mr Raymond says City Index hopes to develop more bespoke tools for the platform in the coming months.
“The ultimate aim is to offer mobile traders everything you can get online. Once the mobile platform comes into line with what you can get on a computer, then I think a lot more traders will use just the mobile platform,” he says.
IG Index’s mobile platform does offer charting facilities but David Jones, chief market strategist, says it plans to develop additional functionality.
“Traders can currently bring up a chart and use it as a quick snapshot. Charts can be quite difficult because they tend to be limited to the size of the mobile phone screen,” he adds.
The upcoming DealBook iPhone application from GFT will offer full screen real time charting as well as news flows.
But despite the improvements made to mobile trading platforms so far, brokers say that clients still prefer to place most of their deals through a traditional computer.
Traders tend just to monitor positions but will trade if necessary, says Mr Raymond.
IG Index says it has about 2,500 unique mobile log-ins on spread betting each day. This equates to about 10 per cent of the total number of traders who use the web platform.
Mr Jones says clients make about 100,000 trades a month on its mobile platform compared with 1m a month for UK spread betting overall.
“Mobile usage is growing very fast and we expect the number of users and deals to keep rising in the foreseeable future,” Mr Jones adds.
However not all brokers currently offer mobile trading platforms. Angus Campbell, head of sales at Capital Spreads, says trading with Capital Spreads is almost 100 per cent online.
He says: “This is still the main growth area of the market, with mobile trading – which is very new – representing a tiny part.”
But Mr Campbell says Capital Spreads will be likely to offer the ability to trade on mobile devices in the future.
Let the technology take the strain
With so many markets to choose from, and such a wealth of information available online for those who want to research, spread betting can be a compelling form of procrastination. You can watch the market move, tick by tick, waiting for the right price, writes Elaine Moore.
But it is not necessary to spend anxious hours in front of a computer screen or limit holiday destinations to places with a Blackberry connection.
Automatic systems make it possible to decide in advance which prices to make bets on and to place limit orders.
Author Sally Nichol, who wrote of her initiation into the world of spread betting in the book Bets and the City, says the notion that either beginners or seasoned betters have to spend hours staring at screens showing market fluctuations is untrue. ”If you’re well organised, you can automate your trades by deciding in advance the price at which you will buy or sell.”
Clients with accounts at spread betting firms such as Capital Spreads, E*Trade or IG Index can then take advantage of sophisticated order systems that allow them to identify certain prices which they believe could be significant turning points and place an order accordingly.
Angus Campbell, head of sales at Capital Spreads says automated trading systems mean clients need not be caught out by erratic market movements but can take advantage of them. If, for example, clients wish to go short on an index such as the FTSE 100, they can set up an order that will only come into play once the market has reached a specific level.
Rather than constantly entering and exiting trades, placing an order that identifies possible turning points in the market means a client need not monitor the markets continually. It is also possible to set up a stop-loss.
So, if clients wished to short the FTSE, but not at its current level of 5,350, they can set up an automated trade to short the FTSE only when it hits 5,380.
All spread betting companies now offer the basic free tools, so customers can place orders, stop-losses and limit orders.
Spread betters can rest easy that the maximum downside risk is known. If an unexpected event caused the market to move against them, exposure will be limited by the automated trades set.
Ms Nichol’s own automated trades came into practice recently, when global events caused the markets to take a turn she hadn’t expected.
After expecting the Dow would continue to climb after Thanksgiving, and that the markets were in for a “Santa Claus rally” during December, she bought the Dow ahead of the American holiday at 10,465, and placed a stop loss at 10,392.
When news broke that Dubai World, the main investment arm of Dubai, was seeking a standstill on debt repayments of $60bn, markets plunged. Without an automated stop-loss, Ms Nichol would have suffered huge losses, but she emerged with a loss of just 73 points.
The following day, she went back into the Dow at 10,240, with a limit order of 10,349. Even though she missed the top of the market, the next time she checked the prices she was 109 points better off. She says: “My advice is: do the work yourself and use the free tools offered by your spread betting company to minimise risk and take profits without being chained to the computer.”
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