With Todd's permission, I am posting his open letter to TS regarding current issues. A couple other things of note, I decided I will start my own blog soon that is more broad based but I still plan on posting here. Also, Cav, you will be proud of me, I am reading Free to Choose by Milton Friedman and I find it fascinating. Here's Todd's letter:
Dear TEN Management:
I have decided to write you one final email in an attempt to discuss with you the problems that are existing on your websites, which continually go unacknowledged by your entire staff. The events of Monday evening have now pushed me to this point to try one last time to get a response from you. You will notice some attached forum posts in my email, and any emails that I reference are available to you. I will be happy to forward them to you if you'd like.
In the past 9 months, I have learned to use your site and become quite an avid trader. My trading volume must easily rank in the top traders on your combined websites. I trade sports and financials. However, the only thing that I now like about your website is strictly the concept of it. The unresponsiveness of the management and the disregard for the customers is alarming.
On this past Monday evening, The SMC/USF game was a live featured event. The forum reference for this issue is (http://forum.tradesports.com/eve/forums/a/tpc/f/809603632/m/3621061412). With one minute to go in the game, the exchange was closed for maintenance. The game was a 9 point game with a 5.5 spread. The game was an 8 point game with under 30 seconds to go, and the spread was totally in play. I first dialed your 1-866 phone #, and got no live help, I then sat waiting for live help via the internet and got no response even though I was first in line for over 5 minutes. Luckily for me, the game ended in my favor and the $2200 that I had at risk was credited back to my account. If you question my intention to trade in the last 1 minute of the game, let me include my trade lines from World Sports EXchange :
02/20/2007 02:06:18
Sell
10
CB-02-19-07-M1
ST MARYS -5.5
$90
Complete Fill
02/20/2007 02:06:23
Sell
4
CB-02-19-07-M1
ST MARYS -5.5
$90
Partial Fill
02/20/2007 02:08:56
Sell
1
CB-02-19-07-M1
ST MARYS -5.5
$100
Complete Fill
Unfortunately, I was unable to cover on TS because your staff closed out the system, and was 100% unresponsive. If you review the emails to and from live help and myself on the past few Monday nights you will clearly see that I remind your staff not to close out the system during a game, and get back messages from them basically telling me that they know. Well, apparently, they don't know, or possibly they don't care. Your promise to allow trading to the end of the game/event was 100% violated. I paid $44.80 in fees to trade this STC/USF game - and was approximately 20% of your volume. TEN should do the right thing and refund EVERY trader their fees from that entire game, and quite possibly take them from the employee who continues to make late night errors. If these were my employees who kept making stupid errors that upset a large portion of my clients, I would terminate them immediately. And this is not the first occurrence. To the same extent, many events have been paused before their completion - with the final outcome still in doubt - in an event to avoid traders covering their positions, so that TEN can save every last dollar in fees.(http://forum.tradesports.com/eve/forums/a/tpc/f/809603632/m/7751024691).
This brings me to my next two points, the first of which being your new fee structure. We all heard what it was designed to do. Increase traders and liquidity. I read the flowery statement from the CEO (http://www.intrade.com/news/news_101.html), about open contracts, new traders, new interest, etc., etc. But it has not resulted in increased liquidity. And if it has, none of the traders can see it. Don't you see the problem? TEN has created this mad dash to cover at the end of events to save a few cents as a trader, and has created this urgency in its employees to get events paused so they can save a few cents also. A well thought out plan would have eliminated this need to cover. It would allow a user holding a winning contract to sit back and relax, it would allow TEN employees to take their time in pausing an event to actually make sure the event is over. In addition this new fee structure has killed trading at the extremes, which is clearly proven in volumes in late game/event situations. When I am trading with TEN on a normal basis, my fees amount to $3000 a month. I don't mind paying a fee for a service, but the service I get in return from TEN is no where close to what should be expected. In addition to paying fees and being 'charged' for a service, have you ever considered giving a discount? This is the only site that I have used that offers nothing back to its users, and is by far the most expensive site to use. No refunds for being a large trader, no bonus, nothing In this link you will find a proposal I made regarding a fee refund structure that would promote higher volume and liquidity and be advantageous to being a high volume trader. (http://forum.tradesports.com/eve/forums/a/tpc/f/809603632/m/8451026112)
The next issue is your staffing decisions. It appears that once 4pm Dublin time arrives, there is no one left capable or authorized to make a decision to deal with issues that arise. All these employees are authorized to do it forward emails and leave the problems for the morning. Do you realize that almost all of your sports volume goes on while management sleeps? The majority of your finanacial (Dow/Nasdaq) volume goes on after Dublin business hours? Even a 24 hour McDonalds has a manager on duty at 4am. Someone needs to be responsible for what happens, and to deal with any issues that come about. Judging by emails I receive from live help during non-Dublin business hours, that person does not exist.
Regarding the grading of contracts, we all know there have been many issues. I did not trade the North Korea contract, so I cannot offer my opinion on it. But I have been involved in the past few weeks in a few sports mis-grades that continue to show the haste of TEN to get their fees and get money back into the accounts. Just last night, the LSU/UK game was paused as the clock when to 0, so obviously someone must have been watching the game via satellite. But the final score that the service you use was different from the one quoted at the end of the game. Wouldn't it make sense to clarify the situation before grading the event? This happened in a Chicago Bulls game and another college game earlier in the month. Why the rush? Information is the key to grading the events. And in some cases TEN (and now specifically Intrade) does not have the proper information to even grade events. If you refer back to my DOW Jones Hourly posts. The hourly contracts where TEN pauses at xx:00:00, and then claims - "The source used to expire the intra-day contracts will be the Time Stamped print at 10:00:00am ET/01:00:00pm ET or other contract specific time [or first print thereafter if there is no print at the specified time) as reported on Bloomberg." But in actuality the information that you use to expire these contracts does not ever even include a time stamp! The information that you expire on is some random point beyond xx:00:00 because TEN claims that the data does not exist. How can you have a contract paused at a specific time but then grade it on a data point that exists some random number of seconds beyond when we were allowed to trade it? Do you have any idea how much money I have lost out of on this technicality? Do you even care? The forum references for this issue are (http://forum.tradesports.com/eve/forums/a/tpc/f/809603632/m/2691083191), (http://forum.tradesports.com/eve/forums/a/tpc/f/169603632/m/7701093191), (http://forum.tradesports.com/eve/forums/a/tpc/f/169603632/m/3091048191/p/2)
On the topic of market makers, does TEN realize that their entire system is dependent upon them?? They control all events. Trading, price setting, liquidity. I will never make a market, its not my trading goal. Many others feel the same. These market makers need to be compensated so they don't need to make their markets wider in order to protect themselves. Market makers are openly admitting to changing how they are doing business to protect themselves. Your fee structure and benefits to them should protect them -- in return they will offer traders better markets, promote more volume, and ultimately increase liquidity. This will also motivate them to stay for the entire game/event. (http://forum.tradesports.com/eve/forums/a/tpc/f/809603632/m/8451026112) (http://forum.tradesports.com/eve/forums/a/tpc/f/809603632/m/7341030702) These issues also exist with the financial contract. http://forum.tradesports.com/eve/forums/a/tpc/f/809603632/m/2271068702
In your defense, I must say, dealing with banking issues, and trusting my money with your company, you are second to none. I have never once had an issue regarding a deposit or withdrawal. Any problems or questions that have arose have been dealt with promptly and fairly by some excellent employees. But on the topic of depositing and withdrawing, why haven't some of the suggestions been taken? (http://forum.tradesports.com/eve/forums/a/tpc/f/809603632/m/8451026112) Why is TEN so far behind everyone else? This will hurt volume if money cant be moved freely into and out of the site. Why cant some of those quality employees be available to handle other problems and create methods of increased liquidity?
I hope you do not take my emails and forum posts as personal attacks. Like I said in my opening statements, I like the concepts of TradeSports and Intrade, however there are many issues that go unaddressed -- and that is the fault of management. I would like to see the best for Tradesports/Intrade and would like to make my experience and the experiences of other traders to be positive ones, but I also fully understand the need for a company to make a profit. My suggestions to you take both into account. I have successfully owned, operated, and restructured many businesses and have always felt my opinions to be objective in balancing corporate profits with customer satisfaction. I feel if you begin to look your policies and procedures from both standpoints, your business can run more efficiently, achieve higher profit levels, and create a more stable and trusting customer base.
Thank you for your time and consideration. I hope this time you will take the time to respond to me either via email, or any other method you choose to contact me by. I am more than willing to discuss some of these issues with you further.
Sincerely,
Todd
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