A few questions from a beginner

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Old Dec 14, 2010, 10:05pm   #1
Joined Nov 2010
A few questions from a beginner

Hi there, I was wondering if you guys could help me out? This is my situation:

I've been making steady gains on a Capital Spreads demo account for a while now mainly by swing trading on individual US shares. I then decided to open a real account with IG Index because they offer 10p a point. They refused me because I'm unemployed and don't have more than a few thousand in cash. In spite of being unemployed and relatively light financially I am actually quite comfortable due to the old parents, so it is money I can afford to lose (not that I intend to, of course), but then this didn't sway IG Index in their decision (not that it should).

So my question is, are there SB firms that would take a guy of my circumstances on? I've seen a few that offer Limited Risk Accounts. Is there any way they wouldn't take me on? Taking a look at WorldSpreads right now, it says their Limited Account offers a whopping 72 products, which is next to useless for someone who trades individual shares (that is if I've understood trading terminology right?).

Of course, it then occured to me that I could, you know, lie on the application. I've read threads where people have done this and had no problems, but I can't help but wonder A. Do they have any way of finding out? and B. What would be the consequences if they did?

While I'm at it I have a few other things I'm not sure about:

Like everyone else, I've heard about these people who lost tens of thousands or even hundreds of thousands Spread Betting. Having been demo trading at 1 pound a point for some time now it occurs to me that the only way this could happen is if these people made extremely ambitious trades and were massively over leveradged. Am I right? I mean, if you're trading responsibly with manageable leveradge with sensible stop losses then your losses will be minimal, right? What exactly happens when your account goes under 0? Does it just keep on going into the minus indefinetely until you close the transaction?

I noticed that Barclays does Spread Betting. I realise that the spreads are going to be larger but are they, as a well known bank, going to be more reliable, trustworthy and won't use dirty tricks to screw you out of money etc? Would I be correct in assuming that lying on an application would be much more problematic where they're concerned?

That's it basically. I'd be very grateful for any advice.

Thanks.
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Old Dec 14, 2010, 11:01pm   #2
 
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Joined Jan 2004
Re: A few questions from a beginner

Quote:
Originally Posted by captainstern View Post
Hi there, I was wondering if you guys could help me out? This is my situation:

I've been making steady gains on a Capital Spreads demo account for a while now mainly by swing trading on individual US shares. I then decided to open a real account with IG Index because they offer 10p a point. They refused me because I'm unemployed and don't have more than a few thousand in cash. In spite of being unemployed and relatively light financially I am actually quite comfortable due to the old parents, so it is money I can afford to lose (not that I intend to, of course), but then this didn't sway IG Index in their decision (not that it should).

So my question is, are there SB firms that would take a guy of my circumstances on? I've seen a few that offer Limited Risk Accounts. Is there any way they wouldn't take me on? Taking a look at WorldSpreads right now, it says their Limited Account offers a whopping 72 products, which is next to useless for someone who trades individual shares (that is if I've understood trading terminology right?).

Of course, it then occured to me that I could, you know, lie on the application. I've read threads where people have done this and had no problems, but I can't help but wonder A. Do they have any way of finding out? and B. What would be the consequences if they did?

While I'm at it I have a few other things I'm not sure about:

Like everyone else, I've heard about these people who lost tens of thousands or even hundreds of thousands Spread Betting. Having been demo trading at 1 pound a point for some time now it occurs to me that the only way this could happen is if these people made extremely ambitious trades and were massively over leveradged. Am I right? I mean, if you're trading responsibly with manageable leveradge with sensible stop losses then your losses will be minimal, right? What exactly happens when your account goes under 0? Does it just keep on going into the minus indefinetely until you close the transaction?

I noticed that Barclays does Spread Betting. I realise that the spreads are going to be larger but are they, as a well known bank, going to be more reliable, trustworthy and won't use dirty tricks to screw you out of money etc? Would I be correct in assuming that lying on an application would be much more problematic where they're concerned?

That's it basically. I'd be very grateful for any advice.

Thanks.
next time you open an account be more economical with the truth. Most sb firms only check proof of residency and not a full credit check. Im not sure about the unemployed part though.You could say you are a full time trader
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Old Dec 15, 2010, 7:59am   #3
Joined Dec 2003
Re: A few questions from a beginner

Never tell a financial firm the truth about your financial/job situation is rule number 1.

Forget about IG, open an account with FinSpreads as they do 10p a point. 10p a point by the way is a smart move when starting out.
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Old Dec 15, 2010, 8:08am   #4
 
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Joined Dec 2009
Re: A few questions from a beginner

I'm with Flash - just bullsh1t on the application.

Also - can you ask your parents if they are looking to adopt ?
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Old Dec 15, 2010, 11:33am   #5
Joined May 2010
Re: A few questions from a beginner

Quote:
Originally Posted by captainstern View Post
Hi there, I was wondering if you guys could help me out? This is my situation:

I've been making steady gains on a Capital Spreads demo account for a while now mainly by swing trading on individual US shares. I then decided to open a real account with IG Index because they offer 10p a point. They refused me because I'm unemployed and don't have more than a few thousand in cash. In spite of being unemployed and relatively light financially I am actually quite comfortable due to the old parents, so it is money I can afford to lose (not that I intend to, of course), but then this didn't sway IG Index in their decision (not that it should).

So my question is, are there SB firms that would take a guy of my circumstances on? I've seen a few that offer Limited Risk Accounts. Is there any way they wouldn't take me on? Taking a look at WorldSpreads right now, it says their Limited Account offers a whopping 72 products, which is next to useless for someone who trades individual shares (that is if I've understood trading terminology right?).

Of course, it then occured to me that I could, you know, lie on the application. I've read threads where people have done this and had no problems, but I can't help but wonder A. Do they have any way of finding out? and B. What would be the consequences if they did?

While I'm at it I have a few other things I'm not sure about:

Like everyone else, I've heard about these people who lost tens of thousands or even hundreds of thousands Spread Betting. Having been demo trading at 1 pound a point for some time now it occurs to me that the only way this could happen is if these people made extremely ambitious trades and were massively over leveradged. Am I right? I mean, if you're trading responsibly with manageable leveradge with sensible stop losses then your losses will be minimal, right? What exactly happens when your account goes under 0? Does it just keep on going into the minus indefinetely until you close the transaction?

I noticed that Barclays does Spread Betting. I realise that the spreads are going to be larger but are they, as a well known bank, going to be more reliable, trustworthy and won't use dirty tricks to screw you out of money etc? Would I be correct in assuming that lying on an application would be much more problematic where they're concerned?

That's it basically. I'd be very grateful for any advice.

Thanks.

I'm not sure lieing on an application is a particularly sensible approach.

Any person who spreadbets full time will be classed as unemployed due to the tax nature of spreadbetting. I have accounts with a range of spreadbet firms and have had no trouble. Of course the amount of liquid (i.e. cash) assets you have and your trading experience will determine whether an SB fir is willing to provide you with an account as you can obviously lose more than your stake and they will need to ensure that you have sufficient cash reserves to meet any potential liabilities.

There are plenty of SB firms out there that offer 10p per pip bets so I would try them first. Maybe speaking to someone on the phone before you make the application would be helpful too to ensure that your employment status and cash assets will not be a problem to them.

Imagine if you lied and did get into trouble and couldn't meet your financial obligsations...that is when your dishonesty would be found out and it would surely be deemed that you obtained the account through fraudulent misrepresentation (don't quote me on this!)...not exactly a situation you want to find yourself in is it...so I would recommend you apply for some more and if having trouble speak to their customer services etc. Have you spoken to IG and found out why your account application was turned down?
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Old Dec 15, 2010, 12:12pm   #6
Joined Jul 2010
Re: A few questions from a beginner

I agree. Considering the amount of flak SB companies get on here for indulging in allegedly dishonest tricks, advising someone to lie on an application form seems a bit ironic.
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Old Dec 15, 2010, 12:29pm   #7
Joined Dec 2003
Re: A few questions from a beginner

Most if not all financial firms will happily lie to their clients to get hold of their cash, or at least hold back the truth.

So if these are the rules they play by, we get a licence to do the same. Plus, what exactly are they going to do if they find out about the lie - send an FSA interrogation squad to start waterboarding? No, all they're going to do is say 'thanks for your business but we cannot accept it any more'.

The other alternative for the OP is to tell the truth, that he has no job and is an age where retirement is not applicable. If I was the SB firm I'd refuse his application every time so trading is going to be 100% out of the question.

It's a simple choice to make.......
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