Quite, but I'm going to hazard a guess that commission churning is better for sharky.
Capital Spreads said last year the average account opens with £2000. I think they also said it takes around 6 months for the amateur trader to lose this money.
Furthermore most of these adverts have bounce rates of around 3-6%, with probably 50% of those who click signing up for a demo account and 50% of those people, if they're first timers, signing up after the sales call arrives.
So according to LMQ there is / was 300,000 members. I'm going to raise that amount to 400,000 for guests over the last few years but also for the one off visitor from another forum.
3-6% of people = 16,000 visits
50% of those = 8,000 sign ups
95% of those = 7,600 accounts blow
7,600 generates average revenue of £15,200,000
6 months to blow up account = 35-40 trading days = probably 100-200 trades = £400 commission per estimate.
£400 x 7,600 = £3,040,000
400 people churning commissions who didn't blow up. Etc
- Server fees and staff.
All hypothetical and even if you half these figures or distort them. For example I actually expect the hit rate of adverts to be quite high but the sign ups to be quite low. The figures are still pretty nice.
Just a bit of gental daydreaming.
