Spread Betting Firms - Trustworthy ?

Falken · Feb 27, 2009

Hello there. As mentioned before I'm planning to open an account with these guys:
Impeo Markets - Home

My plan is to daytrade US stocks. Thats what I simply want to do.
I have a question though, is there anything I should know about spread betting firms ?

I haven't used a spread betting broker before so once again, is there anything a newbie should know about that "all others know about" ?

- Are these playas trustworthy ?
- Will they earn money if I LOSE money ? :S
- Do you really ned Direct market access, level2 screens and so on to trade well ? I thought I might just start of my career with these guys. Is it possible to profit from a spread betting broker ? Some people must be doing it, right ?

Sorry for many confused questions!

//Thanks

Falken · Mar 1, 2009

Comon guys, share some of that importaint info to a newbie if there is any..

thunderbolt1 · Mar 1, 2009

Hi Ive been spread betting for a couple of months now so just to give you my 2 cents worth

1. Day trading so early on is something I was always warned against. Its much more high risk. Your better off learning how to master the longer term trades first as they can me much more profitable and easier to control.

2. US stocks have massive movements compared to the UK etc. So the risk is increased dramatically. Controlling the downside should be one of your main objectives so you end up in a situation where even if more than half the trades you make are wrong you`ll still make a profit.

3. As for spread betting firms most spread bettors have more than one account the reason being that they can shop around for better spreads or if one platform is having technical problems. Im with Capital Spreads at the moment. If your looking for a company with a larger selection of stocks try worldspreads.

Hope im some help.

Trader333 · Mar 1, 2009

Can you post some examples of what the Bid - Ask spread is some of the US stocks that you wish to trade ?

Paul

Splitlink · Mar 1, 2009

Falken said:
Hello there. As mentioned before I'm planning to open an account with these guys:
Impeo Markets - Home

My plan is to daytrade US stocks. Thats what I simply want to do.
I have a question though, is there anything I should know about spread betting firms ?

I haven't used a spread betting broker before so once again, is there anything a newbie should know about that "all others know about" ?

- Are these playas trustworthy ?
- Will they earn money if I LOSE money ? :S
- Do you really ned Direct market access, level2 screens and so on to trade well ? I thought I might just start of my career with these guys. Is it possible to profit from a spread betting broker ? Some people must be doing it, right ?

Sorry for many confused questions!

//Thanks

There is a difference of opinion amongst us about SB firms. I use one, only, because I see no point in going from one to another. Perhaps, if one goes into US stocks, commodities, etc. there is a difference, but I'm fairly staid and don't go, much, outside my trading preferences.

Honest? I'll find that out when they do me!

So far, mine has, at least, a ten years clean sheet and they don't argue the toss with me as much as my medical insurers, traffic wardens and other pirates do!

It amazes me how much the council, water, gas and other services fiddle us, but if a SB company differs from our own opinion of how things should be there is hell to pay.

A lot of these firms are offering money to attract customers. Why not take them up on it and see how their spreads are?

Other questions: Yes, they will earn money on the spreads, if you lose. They , always, will make money, it is their business. It is up to you to make your slice, ie. get it right.

Direct access, etc.? It is a matter of personal choice but, remember, if you are going to lose money, you will lose less spreadbetting because you can trade less than a contract size.

Taylored001 · Mar 1, 2009

Splitlink said:
There is a difference of opinion amongst us about SB firms. I use one, only, because I see no point in going from one to another. Perhaps, if one goes into US stocks, commodities, etc. there is a difference, but I'm fairly staid and don't go, much, outside my trading preferences.

Honest? I'll find that out when they do me! So far, mine has, at least, a ten years clean sheet and they don't argue the toss with me as much as my medical insurers, traffic wardens and other pirates do!

It amazes me how much the council, water, gas and other services fiddle us, but if a SB company differs from our own opinion of how things should be there is hell to pay.

A lot of these firms are offering money to attract customers. Why not take them up on it and see how their spreads are?

Other questions: Yes, they will earn money on the spreads, if you lose. They , always, will make money, it is their business. It is up to you to make your slice, ie. get it right.

Direct access, etc.? It is a matter of personal choice but, remember, if you are going to lose money, you will lose less spreadbetting because you can trade less than a contract size.

Which do you use?

I don't know whether to spread-bet or just to get into the real market and trade through brokerage/CFD.
My main problem with spread-betting is whether there is a potential to make a million using it, when you see people's boastful statements in SB. Its always £1k to £20k, i want to see someone take £200k to £5mil, but you never see it and i wonder if its because its not possible using SB because they'll start to mess you about or... i dunno.

thunderbolt1 · Mar 1, 2009

Taylored001 said:
Which do you use?

I don't know whether to spread-bet or just to get into the real market and trade through brokerage/CFD.
My main problem with spread-betting is whether there is a potential to make a million using it, when you see people's boastful statements in SB. Its always £1k to £20k, i want to see someone take £200k to £5mil, but you never see it and i wonder if its because its not possible using SB because they'll start to mess you about or... i dunno.

Probably the reason your seeing £1k to £20k and not the £200k to £5 million is that all ( I think) Spread betting firms have a limit of how much you can trade per point. So lets say for example that its £500 a point, to grow £200k to £5mil you would need to gain 10000 points. I would guess that it would take some time to do this when you factor in your losses.

Im only a few months in this game but the most I have ever seen is someone bet is £150 a point.

Falken · Mar 1, 2009

Trader333 said:
Can you post some examples of what the Bid - Ask spread is some of the US stocks that you wish to trade ?

Paul

Dell computers: 8.54 - 8.55

Cisco systems: 14.57 - 14.60

Nvidia corp: 8.26 - 8.28

Just a few examples..

Trader333 · Mar 1, 2009

Direct access, etc.? It is a matter of personal choice but, remember, if you are going to lose money, you will lose less spreadbetting because you can trade less than a contract size.

This depends on what you trade and is not the case with currencies. Also the spread is narrower using DA and any losses can be offset for tax reasons into the future which is not an option when using SB.

Paul

Trader333 · Mar 1, 2009

Falken said:
Dell computers: 8.54 - 8.55

Cisco systems: 14.57 - 14.60

Nvidia corp: 8.26 - 8.28

Just a few examples..

The spreads look good. If you go ahead it will be interesting to see how you get on.

Paul

Splitlink · Mar 1, 2009

Trader333 said:
This depends on what you trade and is not the case with currencies. Also the spread is narrower using DA and any losses can be offset for tax reasons into the future which is not an option when using SB.

Paul

Ok, something learned.

As a matter of interest (I don't do currencies, often) with Finspreads GBP/Euro has a 3 point spread and it is possible to trade for 50p per point. Margin for that, would be 65p, less with stop.

What would be the minimum trade DA and for what margin?

Don't need an answer too quick, but when you are on your site I'd appreciate a check, please.

Split

Trader333 · Mar 1, 2009

I don't know the answer for GBPEUR as I don't trade it and this is all about equivalent size per pip movement. So as an example if you were trading GBPUSD then a size of 25,000 would give a 1 pip move of $2.5 which is now about £1.75. There are two exchanges on IB for trading Spot forex (IdealPro and Ideal) and there is a minimum size for IdealPro of 25K but for Ideal I am not aware of any minimum limit. If you don't trade enough size the execution is automatically routed through Ideal.

I would have to look at the spreads to give an answer on what they are for the likes of GBPEUR. For the likes of EURUSD they are often 0

Paul

Splitlink · Mar 1, 2009

Trader333 said:
I don't know the answer for GBPEUR as I don't trade it and this is all about equivalent size per pip movement. So as an example if you were trading GBPUSD then a size of 25,000 would give a 1 pip move of $2.5 which is now about £1.75. There are two exchanges on IB for trading Spot forex (IdealPro and Ideal) and there is a minimum size for IdealPro of 25K but for Ideal I am not aware of any minimum limit. If you don't trade enough size the execution is automatically routed through Ideal.

I would have to look at the spreads to give an answer on what they are for the likes of GBPEUR. For the likes of EURUSD they are often 0

Paul

Thanks.

Spread Betting Firms - Trustworthy ?

Falken

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Falken

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thunderbolt1

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Trader333

Splitlink

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Taylored001

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thunderbolt1

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Falken

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Trader333

Trader333

Splitlink

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Trader333

Splitlink

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