Best Thread Other Side of the Screen

LLSS

Junior member
16 21
How do SB firms feel about opening a buy and sell on a stock at the same time? The idea being to close the profitable position, then wait for the trend to end and close the other with minimal loss or break even, maybe even in profit too. I know the indices are so volatile you possibly couldn't open both positions fast enough, but on stocks this isn't a real problem.

Another idea would be to close one when the trend after a particular event has been established and keep open the profitable one.

Hello Stargunner,

It isn't too much of a problem to be honest (may depend on your broker i suppose) but in general from what I have seen countless times, this method usually ends badly for the trader and so it can only be beneficial to us.

Using an approach such as this requires too much accuracy and no one can pick tops/bottoms perfectly so what you would find is, if you opened up one side, and then your trade begun going against you, you would probably have to take some pain on it. Other factors such as spread and financing charges (swaps etc) will also factor in meaning that you have even more odds stacked against you.
 

rjmahan

Junior member
23 0
Hi,
Just a quick series of questions / observations from me.

I am a reasonably profitable (though still small £20-30k account size) spreadbetter. I deal in individual equities, generally on the quarterly contracts. I can hold positions for many, many years. I mostly invest via spreadbet cos to minimize CGT liability. Usual (initial) position size £5-10k -ocassionally running up to £30.

I don't place stops - generally I will exit a position when the facts on the ground change / I change my mind / things have played out. I am not highly leveraged so I take huge profits -300% 400% and, inevitably occasional 75% / 100% losses.

Are there many like me about ?

How do the spreadcos see guys like me ? It often feels like guys like me are a neglected minority - the marketing is all based around so many pips on the dax etc...

Any advice on how to improve / How the spreadcos see me.

I am often a little concerned that the individual equities side of the business will go away.

Comments appreciated.
 

CityMasterTrader

Member
77 2
Hi,
Just a quick series of questions / observations from me.

I am a reasonably profitable (though still small £20-30k account size) spreadbetter. I deal in individual equities, generally on the quarterly contracts. I can hold positions for many, many years. I mostly invest via spreadbet cos to minimize CGT liability. Usual (initial) position size £5-10k -ocassionally running up to £30.

I don't place stops - generally I will exit a position when the facts on the ground change / I change my mind / things have played out. I am not highly leveraged so I take huge profits -300% 400% and, inevitably occasional 75% / 100% losses.

Are there many like me about ?

How do the spreadcos see guys like me ? It often feels like guys like me are a neglected minority - the marketing is all based around so many pips on the dax etc...

Any advice on how to improve / How the spreadcos see me.

I am often a little concerned that the individual equities side of the business will go away.

Comments appreciated.

Hi there. Firstly I wouldn’t be worried about the equities side of SB disappearing anytime soon. Although marketing seems to focus on FX, indices and commodities, I’m pretty sure equities still makes up an significant part of the business. With regards to how the companies view you, I’d say you are a fairly typical client, with a healthy pot trying to make money in a tax efficient way. If you feel like you want better service speak to them and see whether you can negotiate a better spread or more service. However, don’t forget that for the benefit of tax free gains, you are paying a spread on top of the market price for every trade (unlike CFDs using Direct Market Access) which will be eating into your profitability. In terms of not placing stops, this is fine if you can keep a constant eye on your positions. Otherwise my rule is to always have a stop just in case, and to always be looking for at least 3.0x upside versus risk. So if I am prepared to lose £1,000, then I must be aiming to make £3,000. I know I won’t win every one, but I know that 1 win in 4 will keep me at breakeven. Increase the multiple and you can cover more losses. Decrease it and you risk struggling. Risk vs reward is key.
 

tar

Legendary member
10,443 1,313
Hi there. Firstly I wouldn’t be worried about the equities side of SB disappearing anytime soon. Although marketing seems to focus on FX, indices and commodities, I’m pretty sure equities still makes up an significant part of the business. With regards to how the companies view you, I’d say you are a fairly typical client, with a healthy pot trying to make money in a tax efficient way. If you feel like you want better service speak to them and see whether you can negotiate a better spread or more service. However, don’t forget that for the benefit of tax free gains, you are paying a spread on top of the market price for every trade (unlike CFDs using Direct Market Access) which will be eating into your profitability. In terms of not placing stops, this is fine if you can keep a constant eye on your positions. Otherwise my rule is to always have a stop just in case, and to always be looking for at least 3.0x upside versus risk. So if I am prepared to lose £1,000, then I must be aiming to make £3,000. I know I won’t win every one, but I know that 1 win in 4 will keep me at breakeven. Increase the multiple and you can cover more losses. Decrease it and you risk struggling. Risk vs reward is key.

According to IG's report - P8 - Indices is 46% of the business , FX 23% , Shares 19% and Commodities 6% ...

http://www.iggroup.com/content/files/interim_pres_jan14.pdf
 

rjmahan

Junior member
23 0
I do find its annoying I am paying market spread + spreadco spread - I would be prepared to enter at bid and pay just spreadco spread but no-one seems to offer this sort of service - any idea why - I can get on the order book with IG and some other providers but no spreadco...
 

CityMasterTrader

Member
77 2
Don’t forget spreadbetting always involves an additional spread on top of the bid/ask price in the market (that’s how they make their money). If you want market prices you’ll need to use something like CFDs on which you can get Direct Market Access (DMA). Or You need to research to find the spread betting provider offering the tightest spread versus market. Research on the tools you use is key. Good luck.
 

BigDeal

Active member
117 57
I have found this thread really interesting, and it dispels some of the myths. I have had stops triggered in the past and felt they were 'captured' but realise that this would be futile based on my trading levels. Once I'd started becoming profitable I wondered whether I'd be asked to close my account. I am reassured that this will not happen!
I've been spreadbetting for just over 10 years, and lost fairly consistently for around 7 of those, principally because I had no discipline, idea of what I wanted to trade, did no research before trading, and just enjoyed the gamble TBH. However I eventually got to the point of realising I had to stop or get my act together. One thing I had done over the years, however, was keep records of what I'd traded. I analysed all my previous trades and looked at where I'd been successful. I now trade full time and am consistently profitable. I have a very simple strategy. I never place stops because I pairs trade, ie hedge instead, usually the main indices (and I only use SBs who do not automatically impose automatic stops because that would be a nightmare for the strategy I adopt. I use 2 different brokers. I have even managed to negotiate better overnight financing charges with one of them which has made a massive difference to my profitability.
 
 
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