Potential mass exodus from Spreadbetters.

Lepope

Newbie
3 0
Got an email from my spreadbetter, telling me that margins are likely going through the roof on all instruments. This is due to ESMA's plan to restrict the leverage available to retail clients to a maximum of 30:1. In plain english, unless you have hundreds of thousands of pounds in your account, you're out the game.

Having rung around most spreadbetters today, it appears that this is across the board and having spoken to my own spreadbetting firm at length today, it appears that this is a done deal.

I trade forex and indices. Can someone recommend a broker, (or alternative vehicle to spreadbetting), to trade these markets, ie a broker who will deal with the average man in the street, not just a professional.

Thanks.

David.
 

tomorton

Legendary member
7,250 969
Worrying news indeed David. Might have to seek alternatives myself too.

Anybody know anything more about this?
 

Dowser

Experienced member
1,253 283
30:1 sounds pretty sensible to me. You'd need a grand in your acc to trade the DOW at £1/pt, whats wrong with that? or have I misunderstood?
 

tomorton

Legendary member
7,250 969
 

kalott

Established member
677 57
30:1 sounds pretty sensible to me. You'd need a grand in your acc to trade the DOW at £1/pt, whats wrong with that? or have I misunderstood?
yes, if we get 30 on indices and major forex?

and maybe negative balance protection? (not sure about that)
 
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new_trader

Legendary member
6,205 1,263
Got an email from my spreadbetter, telling me that margins are likely going through the roof on all instruments. This is due to ESMA's plan to restrict the leverage available to retail clients to a maximum of 30:1. In plain english, unless you have hundreds of thousands of pounds in your account, you're out the game.

Having rung around most spreadbetters today, it appears that this is across the board and having spoken to my own spreadbetting firm at length today, it appears that this is a done deal.

I trade forex and indices. Can someone recommend a broker, (or alternative vehicle to spreadbetting), to trade these markets, ie a broker who will deal with the average man in the street, not just a professional.

Thanks.

David.
They only mention CFD's and Binary Options, nothing about Spread-betting. CFD's are generally considered to be a more "Professional" product so I can understand why they want to limit access to retail customers.
 

Lepope

Newbie
3 0
30:1 sounds pretty sensible to me. You'd need a grand in your acc to trade the DOW at £1/pt, whats wrong with that? or have I misunderstood?
I don't know, they're mentioning needing 23k in your account just to do 10pp on Ftse. as opposed to £155 now. That's quite a jump in my eyes. That being said, I have my doubts as to whether they know the true figures.
 

new_trader

Legendary member
6,205 1,263
No it's everything.
I have accounts with 2 different spread-betting brokers and until I get the e-mail you got, I will give myself the benefit of the doubt and say that it is only CFD's and Binary Options and any other leverged product that is considered "professional".

Retail clients are the bread and butter for Spread betting companies. If what you are saying is right they would all go out of business...£23K to trade 10pp? You are kidding!! My DMA broker in the US doesn't require margins anywhere near that size to trade real E-mini S&P500 Futures contracts @ US$50/point.
 

tomorton

Legendary member
7,250 969
I have accounts with 2 different spread-betting brokers and until I get the e-mail you got, I will give myself the benefit of the doubt and say that it is only CFD's and Binary Options and any other leverged product that is considered "professional".

Retail clients are the bread and butter for Spread betting companies. If what you are saying is right they would all go out of business...£23K to trade 10pp? You are kidding!! My DMA broker in the US doesn't require margins anywhere near that size to trade real E-mini Futures contracts @ US$50/point.

I've emailed my account manager at my SB firm, will see what they can say.
 

Dowser

Experienced member
1,253 283
I don't know, they're mentioning needing 23k in your account just to do 10pp on Ftse. as opposed to £155 now. That's quite a jump in my eyes. That being said, I have my doubts as to whether they know the true figures.
That doesn't make sense to me, with £23K in your acc, you should be able to trade FTSE at £3/pt without using any margin...
 

tomorton

Legendary member
7,250 969
LCG can only say nothing has been announced yet re any leverage changes, so they can only wait for what the FCA decide and then go with it.
 

tomorton

Legendary member
7,250 969
Have emailed FCA to ask if SB will be included or excluded from leverage restrictions. They should get back to me within 2 days.