London Capital Group in Roller Coaster Ride


London Capital Group Holdings plc are behind a considerable number of UK spread betting brokers, including Capital Spreads, ProSpreads, Dealing Desk and even Saxo Bank Financial Spreads.  At the beginning of this week they issued their third profit warning. According to the Financial Times:

Just 18 months ago, LCG had appeared to have benefited from the credit crunch as investors seized upon the volatile markets as an opportunity to place bets. But in recent months the range-bound nature of the market meant punters had been able to make small bets with limited risk of large losses. There are less people closing out their losing positions, which is how spread-betting companies make much of their money.”

We commented recently on the possible side effects of falling volatility in the currency markets for traders. Looks as though the brokers are suffering too, in the UK at least.

If volatility, or rather the lack of it, is reducing the profitability of your forex trading we do have one suggestion for you. Maybe you could try shares instead, such as those of London Capital Group for example? At last Friday's close they were trading on the London Stock Exchange at 163p. Following the profit warning they hit a low of 105p yesterday. Today they closed at 130p, up 15% on the day. That looks to me like more than enough excitement for anybody's money!

As if all that isn't enough Dealing Desk's platform stopped functioning for while around lunchtime yesterday here in the UK. According to one exasperated Dealing Desk customer in the ForexTradingFriends chatroom:

Even the trading desk staff have lost everything, This is just beyond belief.

Maybe it just couldn't keep up with everyone shorting the pound after revelations that the AAA credit rating of UK plc is under threat, whilst UK Chancellor Alistair Darling seems to be suffering from the delusion that this is "a position of strength"?

Filed under Brokers by  #

Leave a Comment

Fields marked by an asterisk (*) are required.