Spread Betting Bubble?

[sighthound]

With the influx of more traders and the growth of SB does anyone feel the quality of service is improving as said, many platforms are white labelled or repackaged.Is the quality at par with the growth or are you with whatever broker/s because their as good as it gets.Will somebody new turn up with a new benchmark industry standard service and platform or is it going to be different variations of the same theme?

 

[montmorencyt2w]

I do worry that it would only take a few more cases like the one cited above, selectively reported, to bring down heavy-handed regulation, supposedly to protect us, but probably making things worse.

I just hope that the vast majority of the "bubble"-makers go into the sports-betting side and leave the financial spread-betting side alone, so that maybe this side of the SB fence may be left alone by government. However, after the embarrassments of the last year or so, they are now in a mood to regulate anything that moves, not that it will do any good, but to be seen to be doing something. Painting the deckchairs on the Titanic, or whatever.

 

[donaldduke]

I do worry that it would only take a few more cases like the one cited above, selectively reported, to bring down heavy-handed regulation, supposedly to protect us, but probably making things worse.

I just hope that the vast majority of the "bubble"-makers go into the sports-betting side and leave the financial spread-betting side alone, so that maybe this side of the SB fence may be left alone by government. However, after the embarrassments of the last year or so, they are now in a mood to regulate anything that moves, not that it will do any good, but to be seen to be doing something. Painting the deckchairs on the Titanic, or whatever.

People have been losing fortunes in the markets since for hundreds of years.

Regulations will not stop people stealing money and blowing the lot in either the real market or in bucket shops. If IG had stopped that guy gambling when he was 10K down he would have just gone to City Index then Capital Spreads then CMC....

 

[Black Swan]

in answer to the original question yes, definitely

I have two concerns, firstly the amount of new accounts opened by IG & others on a daily basis since the turn of the year is frightening, in as much as a sudden burst of folk opening accounts is obviously directly related to the state of the economy; in terms of jobs and other opportunites. The vast majority of these new accounts will simply be feeding the beasts with more profit.

Now on the face of it why should we care, more badly informed punters 'putting one on' the more profitability = stronger SB companies....leads me to my second point; stricter regulation may come through govt. intervention as countless stories of the desperate 'betting the farm' (or what's left of it) to re-coup lifestyle and or losses. SB will attract by its very nature an awful lot of short attention span gamblers who can be in business for the cost of a limited account. I fear that addicted gamblers may catch on to SB as opposed to other ways of constantly losing...that's not good.

 

[TomTom]

SB Firms need to be regulated by a seperate arm of FSA so the public can be assured that such firms are all on a leavel playing field. Given time may come. Untill then SB firms will continue to gain more clients, use tricks and high financing methods.
Futuresbetting is a good example of how this should be done.

 

[mgreen]

According to the 2007 Gambling Prevalance study, the biggest in the UK, up to 15% of those who engage in spread betting develop a serious gambling problem, as against 1% fir other types of gambling. The nature of spread betting, instant action, voltaility, use of internet/mobile phones lends itself to become an easy addiction for some, especially those who then end up chasing losses. I think problem cases are under-reported, more effective regulation is required. Financial spreadbetting is an FSA regulated service - would a bank agree to have lent him £70K to 'invest' in spreadbetting, I think not.

 

[donaldduke]

According to the 2007 Gambling Prevalance study, the biggest in the UK, up to 15% of those who engage in spread betting develop a serious gambling problem, as against 1% fir other types of gambling. The nature of spread betting, instant action, voltaility, use of internet/mobile phones lends itself to become an easy addiction for some, especially those who then end up chasing losses. I think problem cases are under-reported, more effective regulation is required.

If the 15% statistic is true, i would think it has to do with SB being potentially winnable, where as beating the casinos is impossible (except maybe blackjack) and most people know it... Spread Betting is more of business challenge and is a beatable foe compared to say a slot machine, hence people are likely to throw more time and money at trying to win at this game.

I dont think this government would be that interested in regulating spread betting in this way, its mainly a middle class activity and labour MPs are more concerned about the working classes not getting ripped off, which is why Tony Blairs plans for Mega casinos were shot down.

 

[arabianights]

Lenin went for the speculators. So did Pol Pot and Hitler. How are this lot any different?

 

[mgreen]

Potentially winnable is correct but the addictive part is more due to the nature of markets and the delivery online. According to the Times article it was noted that 4 in 5 lose. This government would like the UK to be gambling capital of Europe, not sure effective regulation of anything to do with Gambling, other than a window dressing exercise, is their preference. But 30,000 spread bet accounts opened last year, 15% developing serious gambling problems, = 4,500 a year with serious gambling problems with FSA regulated companies, maybe more as professional middle classes less likely to admit it let alone complain. The city turned into a casino under this government, now it is being inflicted on retail customers under the guise of 'investing'. Things will change.

 

[donaldduke]

I think someone who between jobs, gets side tracked into spread betting for six to nine months and loses miserably at it would probably be classed as being a new problem gambler my most people. Where as most traders could probably relate to that and would need more info before they consider such people to have a gambling problem.

For example a newbie starting out might spend 12 hours a day trading or spread betting at this PC.
I would think that is quite normal for a beginning trader learning the ropes, but those doing a gambling study would probably see that as serious gambling problem.

 

[mgreen]

The s/betting firms will know who the problem gamblers are, they will know who loses how much and how often. Not sure that they would volunteer this information to the surveys though...

 

[TheHoneyMonster]

to be fair, as an investment analyst he was already a certified idiot, so...

(p.s. anyone reckon it was Jtrader? )

No

that was me lol.

I came back as twisted evil - JTrader.

But I've asked to be permanently banned again now!

Sorry if i've offended anyone. All controversial comments were in jest.

The trading is going really well now as THM has said. Lets hope it continues.

I promise not to be back!

Peace!

 

[arabianights]

You'll be back

 

[arabianights]

London Capital Group on the wires reporting adverse trading conditions in H1 09...

 

[tar]

London Capital Group on the wires reporting adverse trading conditions in H1 09...

LONDON, July 8 (Reuters) - London Capital Group Holdings Plc : * We have experienced adverse trading conditions in the first half of 2009 * Profits have been impacted by lower levels of interest income * Sees profit before tax at around £3.75M, compared with £5.9M last year
_____

i will take it to CS thread ...