Lowest Spreadbetting Spreads? And a question about trailing stops

[Dago]

Hi Guys (and Girls?),
I am a very green noob still just reading and learning before i put my feet into this huge pond. I was wondering if anyone would give me their advice on a couple of points:

1. Which Spreadbetting firm has the lowest spreads (and if different ones have different spreads in differnt things, then which has the lowest on US stocks and on UK stocks?)

2. Which platform would allow me to have trailing stop losses on a spreadbetting portfolio?

and lastly, if anyone wants to answer even just in general terms...would I be very wrong if I assumed that in spreadbetting the way to make money is to actually perform better than most people doing it since in essence the situation is not terribly far removed from a casino (with the spreadbetting firm being the "House" and the other traders being other "gamblers" who all play at the same "poker table")? I know the analogy to gambling is far from perfect but I am trying to get a handle on the overall big picture (i.e. where does all the money come from (the spreads ok...but also the bets that go counter to your bet surely? and how is this tracked by the brokers?)

Thanks in advance

 

[shadowninja]

Hi

There are quite a few threads in this section so it's worth reading them.

I have used IG Index for the last year and while the spread isn't that good, the platform is now very reliable. The last thing I want is to find that when I close a position, the software won't let me so I have to keep retrying, while watching profit turn to loss. Or end up having to call the broker.

Good luck.

-Darren

 

[Dago]

Thanks for the reply.
I just read over the last two hours, the ongoing "debate" (not sure what word to use actually ) on the IG Index thread.... kind of opened my eyes to a lot of the questions i had about how this game works....
Once you factor in the sharking that seems to go on with spreadbetting it seems to make it a whole lot less attractive. Manually tweaked things to make you lose seem a mug's game to me....Certainly it would be a mug's game for me now...
I am now wondering if direct trading would be the way to go...but I suppose I had better read up on what that is

Playing poker seems fairer than spreadbetting though when I read about freeze outs etc.
comments?
I know Paulds has strong views and I am too much of a noob to have an opinion, but if nothing else his posts highlighted some stuff that I wondered about.
So thanks for that...

 

[Slorm]

You need to be a little careful here as the size of spread isn't everything. As Shadowninja rightly points out, reliability is very important, the other thing to watch out for is how much the SB firm manipulates the price away from the undelying instrument (this can work in your favour sometimes). For instance, on a volatile day on the FTSE 100 I've seen prices upto 8 points adrift.

I don't know of any SB firm that have automatic trailing stops, you normally have to adjust them manually.

In theory the SB firms hedge the bets that they hold so technically you're not betting against them like in a casino. However you need to perform better than the market AND better than the SB firms price manipulation.

This is "shark infested waters" so expect to lose your initial account balance a good few times. while you are learning.

Open some demo accounts and try it out. See if you like the platform, how reliable it is, but above all get a feel for how the SB firm move their prices. If you're holding overnight positions you'll also need to check the financing cost so use the demo account to check that out as well.

Good luck with it.

 

[Lightning McQueen]

Have a look at GFT, they have trailing stops and a demo account, I do not know if they're ok or not, last time I looked the minimum deposit was hefty @ £1500, so didn't pursue the matter further, it may be a lot less now, from what I have read from others dealbook 360 sounds ok.

http://www.gftuk.com/spreadbetting/orders.asp

 

[Dago]

Thanks guys, funnily enough, GFT is one I looked at too and I also saw they have trailing stops (it seems).
Worrying a bit about the shark infested realm of spreadbetting as a whole though.
What is the closest thing to spreadbetting in principle that actually follows the market though. I mean where the broker does not have a 'spread' but rather a fixed cost of running the trade. CFD? options?
I am aiming to get into leveraged products only probably and am still looking at various products. Spreadbetting seemed ok until I realised that you are basically playing against the brokers that you have an account with.

I know an element of insider trading/unfairness/big volume traders vs little guys etc etc goes against you in all forms of trading...but I'd like to maybe stick with those aspects of this game where those risks are perhaps better understood or at least historically more consistent.
Thanks for your comments btw.

 

[Slorm]

GFT has a great platform but for indices it's a minimum of £1 per pip (not point) so the real minimum is £10 per point. For a total beginner I'd say that's way too high, stick to 50p/£1 pp, for starters.

Frankly I would keep away from using margins (regardless of what you're trading) if it goes against you the speed of wipe-out can be terrifying and margin calls are not a nice experience. Bet what you can afford to lose (in other words make sure there's enough in your account to cover the bet fully once your stop loss is in place).

Once you have a tested trading plan in place only then think about using margins.

Personally I've never traded CFD's but from what I understand you are still betting against the broker unless you have direct market access. DMA accounts require a much higher margin deposit up front from what I can see.

 

[Dago]

Thanks for that Slorm. I do not plan to bet without stop losses nor do I plan to use the margin accounts, i.e. I do plan to have my bet fully covered if it goes badly before i enter it.
I also don't think I'd play indeces so much as specific stocks or metals, forex (which i suppose is a kind of index anyway...)

about DMA accounts, where could I find more info on getting one of them?
Thanks for your input.

 

[Slorm]

I know of one - Interactive Brokers, but there are others around. Have a look through some of the threads or try the search function.

Best of luck in your future trading

 

[gedward3]

Thanks for that Slorm. I do not plan to bet without stop losses nor do I plan to use the margin accounts, i.e. I do plan to have my bet fully covered if it goes badly before i enter it.
I also don't think I'd play indeces so much as specific stocks or metals, forex (which i suppose is a kind of index anyway...)

about DMA accounts, where could I find more info on getting one of them?
Thanks for your input.

Hi Dago,

You can have the Direct Market access within a Tax Free spread bet wrapper through Futuresbetting. You have to put a minimum £5k down but it beats playing against the house. Have a look at the threads below and happy trading.

PS: The site below is actually quite good and contains a lot of informative info.....


http://www.financial-spread-betting.com/Futuresbetting.html

http://www.financial-spread-betting.com/Futures-betting.html

 

[Lightning McQueen]

GFT has a great platform but for indices it's a minimum of £1 per pip (not point) so the real minimum is £10 per point.

I've just had a quick look at their market information sheets for indices and lets take ftse as an example it says that the "tick factor" is "one index point" minimum bet size is £1.

"Tick Factor = the price increment representing 1 whole betting unit"

I cannot see anywhere on there how I couldn't trade with them at £1 per point on indices, just like many other sb companies, as is the 2 point spread.

Of course if im reading this all wrong then ok, fair cop guv:cheesy:

 

[Slorm]

Of course if im reading this all wrong then ok, fair cop guv:cheesy:

If you check the column that says "Lot Size of Underlying Market" for FTSE 100 it's £10, the size column is misleading as their point is one tenth of an index point. You can check it out if you get a demo account, it nearly gave me a heart attack before I realized what was happening.

"It's a fair cop my lad "

 

[Lightning McQueen]

If you check the column that says "Lot Size of Underlying Market" for FTSE 100 it's £10, the size column is misleading as their point is one tenth of an index point. You can check it out if you get a demo account, it nearly gave me a heart attack before I realized what was happening.

"It's a fair cop my lad "

Oh no, It's a bust!

In mitigation m'lud Im still confused on this issue looking at their trading examples they're not coming across to me as easy to understand I have never looked further than their front end page introductory blurb and not taken advantage of the demo.

I would imagine it was a shock trying to trade indices at those bet sizes if unprepared.

cheers

 

[Slorm]

LOL, it was. Those tenths of a point move faster than a rat down a greasy drain