So basically spread betting is a con?

OutnumberedOutgunned

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wow, i have bought shares a few years ago and made a tidy profit before getting a daily grind. Recently i decided to get back into trading and i remembered being told that in a bear market you should "short shares" so i opened up an account with IG Index. But before trading with them i decided to do research (thank heavens for that)

i never knew that spread betting firms hated that you make money, bit silly as i thought they make money from the spread therefore they wanted me to make a profit so i could trade more. So from what i have read SB companies dont like it if i make money because im making it out of them and not "the market"

i always thought you place an order with an SB, they go to the market and say we would like to buy shares at e.g. 150p rather than actual price of 220p, this then meant there was an order to be filled at 150p which made sellers think that their stock was over priced and hence the price came down.

lol i realise i am a complete dreamer
 
wow, i have bought shares a few years ago and made a tidy profit before getting a daily grind. Recently i decided to get back into trading and i remembered being told that in a bear market you should "short shares" so i opened up an account with IG Index. But before trading with them i decided to do research (thank heavens for that)

i never knew that spread betting firms hated that you make money, bit silly as i thought they make money from the spread therefore they wanted me to make a profit so i could trade more. So from what i have read SB companies dont like it if i make money because im making it out of them and not "the market"

i always thought you place an order with an SB, they go to the market and say we would like to buy shares at e.g. 150p rather than actual price of 220p, this then meant there was an order to be filled at 150p which made sellers think that their stock was over priced and hence the price came down.

lol i realise i am a complete dreamer

With a spread pf 2-3 pence, such as those on the FT100, where is your problem? Slow fills, maybe? These people are not as fast as a direct access broker, I agree, but I get along with them by timing my entry when there is a patch of lower activity. Chase a share on a breakout and you are going to make work for yourself, I agree.

Split
 
i never knew that spread betting firms hated that you make money, bit silly as i thought they make money from the spread therefore they wanted me to make a profit so i could trade more. So from what i have read SB companies dont like it if i make money because im making it out of them and not "the market"

This is exactly as it is. You just have to make money if you can until they find an issue with your winning ways and either slow you down or close your account.
When this happens, you move on to the next spreadbet company. :devilish:
 
Thank you for replying.

I was going to open some positions today but if i lose to learn then learn to win then get stopped and have all this hassle of changing company to company with the pain of opening positions with knowledge of success being a future handicap; i dont think i want to even start.

However i use to hear Warren Buffett going "short" on currencies etc was he not with an SB firm? how else do you go short?

i thought we were competing with the market via SB firms not against them but it makes sense they would sabotage those good enough to even make a profit.
 
IG are pretty good in my view. Out of all SB companies you will stand a better chance of making profits with them than others.


Paul
 
Thank you for replying.



However i use to hear Warren Buffett going "short" on currencies etc was he not with an SB firm? how else do you go short?
.

If you go short of one currency you buy a different one. You have a fistful of fivers and change them into dollars, you've gone short sterling and long the dollar. That's pretty much how it works, except you don't have to have the full amount upfront.
 
wow, i have bought shares a few years ago and made a tidy profit before getting a daily grind. Recently i decided to get back into trading and i remembered being told that in a bear market you should "short shares" so i opened up an account with IG Index. But before trading with them i decided to do research (thank heavens for that)

i never knew that spread betting firms hated that you make money, bit silly as i thought they make money from the spread therefore they wanted me to make a profit so i could trade more. So from what i have read SB companies dont like it if i make money because im making it out of them and not "the market"

i always thought you place an order with an SB, they go to the market and say we would like to buy shares at e.g. 150p rather than actual price of 220p, this then meant there was an order to be filled at 150p which made sellers think that their stock was over priced and hence the price came down.

lol i realise i am a complete dreamer

apologies for being slow, but I'm not exactly sutre what your problem with the spread betting companies is? If you want to buy or sell stock, take the market price, apply interest between the date of the bet to the expiry of the contract (Mar, Jun, Sep, Dec), subtract any dividend due, and then add about .8% to the spread (depends on the company) and you have their price.

It's very predictable and not a con. Give me a market price and and dividend's due, I'll work out the spread bet companies qoutes for you.

If you're incredibly successful, they might close you down - though probably not if you're trading shares over longer time frames.

I doubt your suggestion they're "a con" is from your own experience. More likely from 1 of 3 souces;

1. The vast majority who wouldn't make money if they had a copy of next week's financial times, but will balme the SB firm for their shortcomings after reading interenet Bulletin boards telling them so.

2. People who only read internet bulletin boards and regurgitate what they're read, like sheep.

3. Succesful spreadbetters who operate on a short time frame and have cleaned out their bookie.

99% of what you read will fall into either 1, or 2. Probably including your own post - though apologies if this isn't the case.

Good luck.

UTB
 
2. People who only read internet bulletin boards and regurgitate what they're read, like sheep.

There are people who only read internet bulletin boards and regurgitate what they've read, like sheep.

Totally agree with last post - I've been SB'ing since Oct'05 - never ever had a problem with any of them. Usually the people I see complain here are the ones trying to scalp or arbitrage pricing anomolies.
 
I know of a handful of consistently successful financial spreadbetters. (That said, I know a larger number of failed SBers who have since quit.)
 
I trade longer term (2/3 days usually) with CS and very rarely have any problems.

My own impression from reading these and other forums is that SB's simply don't like scalpers/very short-term traders and will "encourage" them to take their business elsewhere rather than simply closing their accounts (probably bad PR).

I think the "problems" that some encounter may be a very heavy hint?
 
How is spreadbetting a con?

I have been spreadbetting for about 1 year now and have not encountered any serious problems apart from the platform freezing at times of exceptional volatility (Eg. Wall St crash).

When I put on a trade and make a loss I do not blame anyone but myself. When you overtrade, blow your account, trade emotionally or fail to trade a plan with an edge then you have only yourself to blame.

If you are trading a plan with an edge and make a loss then this is simply the cost of doing business.

Blaming the spread is also irrelevant - if a winning trade nets you dozens of pips then a 4 pip spread is not a problem.

So, how is spreadbetting a con?
 
I trade longer term (2/3 days usually) with CS and very rarely have any problems.

My own impression from reading these and other forums is that SB's simply don't like scalpers/very short-term traders and will "encourage" them to take their business elsewhere rather than simply closing their accounts (probably bad PR).

I think the "problems" that some encounter may be a very heavy hint?

Anybody here reporting these problems with WS, CS & Fins End-Of-Day Trading (2/3 days usually) ? Or is this a daytrading and intra-daytrading problem?
 
I know of a handful of consistently successful financial spreadbetters. (That said, I know a larger number of failed SBers who have since quit.)


I bet you could have replaced "spreadbetters" with "stock trader" or "derivative trader" or "currency trader" though, couldn't you?

UTB
 
Spread betting can be a con when they pretend you can trade whatever style you wish to trade because you will run into problems sooner or later. However, for slightly longer time frame trading it is no worse than trading with non-SB companies. You have to remember that most of the problems you hear about are most likely not due to malicious intent on the SB's part. It is usually platform issues related to news trading, fills, etc.

If you are the kind of trader who does predefined S/R levels, for example, you can just pick up the phone and put the trade/order on and I am sure you will be ok. The control of your own trade execution that comes with online trading is where the problem is at. You are just scaring hell out of them by having that control and they try to curb that as much as they can and that can be a pain in the backside.

Active online day trading with SB companies in fast markets will, however, cause you headaches
 
Thanks FX

That's what I was hoping as so far I haven't experienced these problems with none of the SB-co's but was watching out for them.

I much prefer EOD type trading, I still make money at it but get allot more time at the beach..
 
Thank you all for posting and i have indeed appreciated your insights.

My title was to provoke a discussion becuase as i have read through this forum all i have read is how 90% fail and the 10% who succeed are told to take their business elsewhere. Personally i dont believe its a con, its business (as convincing as that it) on that basis i believe its fair game.

I dont have any expert or professional instruments that determine whether ill go short or long so i do a lot of reading on individual company's and will trade only a few consistently but if it means i will be sabotaged then i may reconsider speadbetting.
 
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