A few questions from a beginner

[captainstern]

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.

 

[Lord Flasheart]

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

 

[anley]

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.

 

[DionysusToast]

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

Also - can you ask your parents if they are looking to adopt ?

 

[lovejoy21]

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?

 

[Ross Spur]

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.

 

[anley]

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.......

 

[anley]

What exactly happens when your account goes under 0? Does it just keep on going into the minus indefinetely until you close the transaction?

It's very hard for this to happen. Think of a Casino (that doesn't allow credit), blow all your chips and then try to bet more, with what exactly?

With a SB firm you can only trade with what you've got in your account so the people who've lost fortunes have large accounts. Yes, always exceptions to the rule but not many and most if not all of them (the big losers) would have had credit accounts and be well known to their SB broker.

 

[lovejoy21]

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.......

I think the ramifications for lieing on an application form are more serious than what you suggest. Deliberate misrepresentation is not something I think anyone should be recommending!

I have no job and am not at retirement age and have never had a problem opening an account with an SB firm. As I said most people who spreadbet full time will be classified as unemployed so it's not a unique situation.

Rather than take the easy option of lieing why not make an effort to communicate with IG and / or try and apply for other accounts and other SB firms.

 

[captainstern]

I think the ramifications for lieing on an application form are more serious than what you suggest. Deliberate misrepresentation is not something I think anyone should be recommending!

I have no job and am not at retirement age and have never had a problem opening an account with an SB firm. As I said most people who spreadbet full time will be classified as unemployed so it's not a unique situation.

Rather than take the easy option of lieing why not make an effort to communicate with IG and / or try and apply for other accounts and other SB firms.

I spoke to IG on the phone. I explained that I was unemployed and only had a few thousand. I told them I wanted to start small, that I would use stop losses and little leverage but they didn't want to know. They told me I should get a job and then get back to them! I got the impression that if you're not that flushed but are employed they'll take you on, and the same if you're indeed unemployed but have decent money. Being unemployed yourself when you began were you rich or well off to begin with?

I've thought about using your approach of phoning each firm up and levelling with them but A I don't want to burn all my bridges and B as Anley says, I really don't think it would work, especially based on the response of IG.

Thanks Lord Flashheart I could indeed put down full time trader as occupation because technically it's true.

 

[anley]

Tell them you're a self employed builder.

Really, they have better things to do that check out what their clients do plus I say again what exactly are they going to do, sue you, report you to the Police, send your details round to every other SB firm via some secret 'black book'.

False information when trying to obtain credit is illegal but you're not applying for this.

Guys, this is the financial markets we're dealing with, snake pits have nothing on the industry, play by their rules not yours..........

 

[captainstern]

Thanks everyone. I'll take everything you've said under consideration.

I've just taken a look at the Finspreads application by the way. It's the most intrusive one of the lot by far.

 

[timsk]

I spoke to IG on the phone. I explained that I was unemployed and only had a few thousand. I told them I wanted to start small, that I would use stop losses and little leverage but they didn't want to know. They told me I should get a job and then get back to them!true.

Hi captainstern,
Welcome to T2W.
I think the SB firm deserves a little credit here - and it's not often you'll read that on these boards! What they're doing is, in all probability, adding 2+2 and making 5. Based on the info' you've supplied, they'll assume (not unreasonably) that you've signed up for some magic holy grail service in the belief that you'll generate a full time income of £2k or £3k+ p/m - from a capital base of just a few thousand. They know that your chances of success are slim (to put it mildly) and that you're far more likely to blow up and end up in debt. Given this scenario, it would be irresponsible of them to let you open an account. After all, for all they know, you're a reporter or someone in the employ of a regulatory body like the FSA. Understandably, they don't want to get caught out.

IMO, being economical with the truth is absolutely fine - so long as you appreciate fully the risks you are taking and don't cry foul if you lose all your money. I've done this with most (all?) of the accounts I've opened and, on several occasions, even been given advice by the account executive at the brokerage firm as to what to say / which boxes to tick etc. to ensure that my application passed compliance checks. For example, for tax reasons, I have a joint account with my wife. The futures brokers I've had accounts with all want to know about her trading experience - which is zero. She's never placed a trade in her life and never will. Do I tell my broker that on the form I fill in? Yeah, sure I do. Not!

Tim.

 

[captainstern]

Hi captainstern,
Welcome to T2W.
I think the SB firm deserves a little credit here - and it's not often you'll read that on these boards! What they're doing is, in all probability, adding 2+2 and making 5. Based on the info' you've supplied, they'll assume (not unreasonably) that you've signed up for some magic holy grail service in the belief that you'll generate a full time income of £2k or £3k+ p/m - from a capital base of just a few thousand. They know that your chances of success are slim (to put it mildly) and that you're far more likely to blow up and end up in debt. Given this scenario, it would be irresponsible of them to let you open an account. After all, for all they know, you're a reporter or someone in the employ of a regulatory body like the FSA. Understandably, they don't want to get caught out.

IMO, being economical with the truth is absolutely fine - so long as you appreciate fully the risks you are taking and don't cry foul if you lose all your money. I've done this with most (all?) of the accounts I've opened and, on several occasions, even been given advice by the account executive at the brokerage firm as to what to say / which boxes to tick etc. to ensure that my application passed compliance checks. For example, for tax reasons, I have a joint account with my wife. The futures brokers I've had accounts with all want to know about her trading experience - which is zero. She's never placed a trade in her life and never will. Do I tell my broker that on the form I fill in? Yeah, sure I do. Not!

Tim.

Thanks for the welcome.

Ye, as you said, you can't really blame them. It's just it sucks for someone in my position! I'll keep on trucking though.

 

[Ross Spur]

Thanks for the welcome.

Ye, as you said, you can't really blame them. It's just it sucks for someone in my position! I'll keep on trucking though.

If it really is the 'unemployed' bit they're worried about, just put self-employed, which would be true if you decide to start a business, doing whatever.