Financial Spread Betting | Betting Bible

SpreadEx make changes to Automatic close process

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Created on Thursday, 19 April 2012 18:36

Customers of the spread betting service SpreadEx should have received an email this week from the SpreadEx team explaining some changes to the terms and conditions to the financial spread betting rules, and in particular the automatic close process.

The email (included below for information purposes will possibly have been ignored by many spread bettors because of its length and legal jargon - however this is the stuff you need to know about to avoid losing money!

To help you out though, we've summarised some implications/things to look out follwing the rule change:

• SpreadEx previously did not implement an automatic close process on financial spread betting positions if you did not make the margin calls immediately. This was actually potential reason for using them as a spread betting service for many, because it meant that during times of market volatility, you did not get stopped out as you might have done by someone like IG Index. On the flip side, the new rules can work in your favour if a position completely plummets, and you were planning on making the margin call but did not have time.
• The rule does not get implemented until 28th May.
• Spread betting providers who adopt this rule are protecting themselves from client getting into significant debt that they are unable to pay. It will be interesting to see whether this more cautious approach to client accounts will enable SpreadEx to offer tighter spreads.

 

Email from SpreadEx

Dear Customer,

We are writing to let you know that with effect from Monday, 28th May 2012 we will be changing the terms on which we will accept bets from you.

The changes will primarily be made by changing our Customer Agreement, including Rule 21, which changes how we will deal with open financial spread bets (see more on this below).

Changes will, however, also be made to the Sports Spread Betting Rulebook, Sports Fixed Odds Betting Rule Book, Order Execution Policy, Casino Betting Rule Book and Risk Warning Notice.

We invite you to read the new versions of these agreements, by clicking the links either above or right, so as to ensure that you are happy to trade with us on the new terms. Although there are many changes to them, and you should read the new versions in full to ensure that you are happy with the new terms, we wish to draw your attention to the following specific points.

First, you should note that under clause 1(2) of the new Customer Agreement, once you open a bet on or after the Effective Date of Monday 28 May 2012, the new terms will apply to all of your bets with us, including bets that are already open at that time.

You should therefore not open a bet with us on or after the Effective Date unless you are happy for all your bets to be held under the new terms (for these purposes any roll over that involves the opening of a new bet will be treated as the opening of a new bet: see Rules 1(2) and 45(6) and 45(7)). A similar principle will apply to any further new agreements published by us in future with an Effective Date - see Rule 38 of the new Customer Agreement.

Secondly, I would like to draw your attention to Rule 21 ? the Close Out Level. This represents a significant change to how we will deal with open financial spread bets. Under the new Customer Agreement, you will no longer be entitled to receive a margin call. Instead, all of your positions may be closed without notice to you if your account reaches the Close Out Level. This means that if the cash in your trading ledger, plus any profit and minus any loss on your open spread bets, plus any credit limit (but not taking into account any balance on your Fixed Odds Ledger) is a negative figure, we will be entitled to close out all of your spread bets without notice to you.

Unless, therefore, you are happy to run the risk of having your open spread bets closed out, you should ensure you have sufficient cash in your account - particularly in volatile markets or if you are travelling - to control the risk of this happening to your satisfaction.

Please note that your sports spreads and fixed odds bets will not be closed as a result of your financial spread bets breaching your close out level.

Please call us on 01727 895 000 or email This email address is being protected from spambots. You need JavaScript enabled to view it. if you have any questions on the new Customer Agreement or any of the other documents referred to above.

These are not the only changes to the terms on which we will accept spread bets from you and you should read the Customer Agreement before the Effective Date of Monday, 28th May 2012 to ensure you are familiar with all of our terms of trading if you wish to bet with us from that time.

Please note also that, while we have attempted to summarise parts of the new Customer Agreement above, this message does not form part of the new Customer Agreement and will not affect the meaning of anything written in it.

Kind regards,

The Spreadex Team