My son lost money on Trading 212

[johnh77]

Hi all,

This may probably be a stupid question to most on here but, my son opened an account on Trade 212 and thought he had bough Tesla and Pepsi stock. But as the stock value went down, he lost money out of the account.

I didn’t think this was possible with stocks, as I understood it you buy at that price point and if the stock goes down then the stock you hold is just worth less.

I’ve not used the Trading 212 platform but has my son somehow used borrowing and put his money into Pepsi and Tesla in a different way?

 

[Sharky]

Sounds like he used CFDs, see: https://www.trading212.com/cfd - with cfds you never actually own the underlying asset and they use leverage, which means if he's maxing out at 5x leverage, a 20% move in the wrong direction would reduce his stake to zero. There's more info on the Trading212 help section here: https://helpcentre.trading212.com/h...he-difference-between-CFD-and-Invest-account-

 

[johnh77]

Sounds like he used CFDs, see: https://www.trading212.com/cfd - with cfds you never actually own the underlying asset and they use leverage, which means if he's maxing out at 5x leverage, a 20% move in the wrong direction would reduce his stake to zero. There's more info on the Trading212 help section here: https://helpcentre.trading212.com/h...he-difference-between-CFD-and-Invest-account-

Thanks yes that makes sense. I’ll send him your reply, much appreciated

 

[Quantt]

CFDs are evil IMHO

 

[johnh77]

CFDs are evil IMHO

I’ve told him to steer clear. He thought he was getting actual stocks. One of his friends trades forex and is making a few thousand a month so I think his mate made it out to be simple.

 

[Inquisitor]

How much money did your son put into the account to start with?
It would be interesting to know what strategy his friend is using to make several thousand a month trading forex as that would require either very high leverage or very large funds?

 

[johnh77]

How much money did your son put into the account to start with?
It would be interesting to know what strategy his friend is using to make several thousand a month trading forex as that would require either very high leverage or very large funds?

I think it was a few hundred, but that’s enough to him he’s still at uni. My son did asked his mate to teach him at some point, but I think this has stung him and put him off tbh. He’s going to finish his LPC/masters at uni first and come back to this when he’s earning more.

 

[Inquisitor]

I think it was a few hundred, but that’s enough to him he’s still at uni. My son did asked his mate to teach him at some point, but I think this has stung him and put him off tbh. He’s going to finish his LPC/masters at uni first and come back to this when he’s earning more.

Your son seems to have been a little uninformed. Tesla is today at around £160 and Pepsi at around £147 so even with £600 the best he could have had was around 2 shares in each stock which is nowhere near enough to engage in any form of trading. Hopefully he will learn more about "leveraged" products before engaging in future speculative ventures.

 

[winifred]

johnh77- There is any change to get back your son money ? Or did you tried?​

If someone lost their money, due to some mistakes , what are the changes to have a refund?