Hedge/Speculation/Both Account Application?

cshieldsx · Aug 20, 2007

Hi all,
Due to being a student various SB companies have rejected me an account. All of them ask the quesiton "for what reason will you use this account?" and the 3 answers are "hedging other investments" "speculation" or "both". Whats the best answer to give to imply that I am lower risk ? Or does it make no difference at all ?

Seems a strange question but the only companies that seem to give me an account are the ones with huge spreads.

Thanks

nkruger · Aug 20, 2007

cshieldsx said:
Hi all,
Due to being a student various SB companies have rejected me an account. All of them ask the quesiton "for what reason will you use this account?" and the 3 answers are "hedging other investments" "speculation" or "both". Whats the best answer to give to imply that I am lower risk ? Or does it make no difference at all ?

Seems a strange question but the only companies that seem to give me an account are the ones with huge spreads.

Thanks

Wouldn't have thought it mattered. If you're not applying for a CREDIT ACCOUNT they shouldn't give a t*ss what your reason is as you would have to deposit money with them before you can enter a trade. The only reason they may reject your application is if you have a poor credit history.

I'd ring them up and ask them - all the companies I deal with have friendly staff.

Let us know how you get on.

NK

cshieldsx · Aug 20, 2007

well CMC markets and capital spreads only appear to have one type of account, presumably a credit account because that is the norm isnt it ? only a few of the not so great SB firms have limited risk accounts.

nkruger · Aug 21, 2007

cshieldsx said:
well CMC markets and capital spreads only appear to have one type of account, presumably a credit account because that is the norm isnt it ? only a few of the not so great SB firms have limited risk accounts.

I have Acc's with those 2 as well - the 'standard' account with CS is not a credit one. The norm is not a credit account, that is where the SB company allows you trade with money borrowed from them - so they will check you fairly rigorously.

Nick

cshieldsx · Aug 21, 2007

well just out of interest anyways, which answer to the question would be considered lower risk ?

nkruger · Aug 21, 2007

cshieldsx said:
well just out of interest anyways, which answer to the question would be considered lower risk ?

You could argue that if you said 'Hedge' it would imply you already did a bit of trading and so would be more successful than merely 'Speculation' where you maybe a newbie.

I honestly believe though, they couldn't really care less, it's just a box they have to tick, as a SB company, for FSA rules.

Hedge/Speculation/Both Account Application?

cshieldsx

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