Can anyone recommend Spread betting company

Loughton_Monkey

blinko wrote: »

I understand leverage and its not something i intend to use, i dont think i will get out done by volatility as i will be aware of teh assets i am trading plus my stops wil be wide enough hopefullly to avoid treeshakes as far as i am convered ibet on a share going up and if it goes up i win if it goes down i lose

Trouble is, leverage is unavoidable, as it's the "nature of the beast". In other words, when you put a bet on, it is "ringfencing" your capital only to the tune of 2%/5% of your actual exposure.

Treeshakes tend to happen only in Aim and Small Cap. But there is an issue regarding the "depth" of the normal waves of a particular share or index. If you set stops cautiously, then you will get stopped out 7 times out of 10 even thought the market is going up. That's because of the normal 'waves'.

So set them much wider, and what happens? You're risking £50 just to gain £20 (realistically). Or, the market turns anyway.

Anyway. Get a practice account and you'll see what I mean.

sabretoothtigger

I'd argue tree shakes, flash crash or whatever is more likely to happen now then any other time in history. Normally its a small part of the market that'll it reverse back and forth, one of those times it wont stop
In may in 15 minutes the ftse dropped over a thousand points to 4200, if you have a tracker or normal investment it never happened but if you spreadbet you lost alot of money

So long as you keep it small I think its ok but if start placing 10 'shares' of Shell like its no big thing it becomes a problem, thats a 20,000 pound investment and they'll lend 95% of it no problem.
1 spreadbet unit is 100 real shares

If you go to finspreads they will start you off at 0.1 units which is only 10 shares so for shell you'd be 'spending' only 200 pounds

Loughton_Monkey

sabretoothtigger wrote: »

I'd argue tree shakes, flash crash or whatever is more likely to happen now then any other time in history.

Don't disagree.

But my comment was based upon "Treeshakes" which is generally confined to the deliberate actions of 'Market Makers' who love to make money by zooming the price down (without a single share changing hands) simply to buy a few at an incredibly cheap price. Relieves the boredom too.

Flash Crashes are something I didn't comment on, but I agree they happen. I have never seen one that goes up! Hence, being a cynical old sod, I do rather suspect foul play sometimes.

blinko

i intend to do £1 per point well its either that or hold the actually share but i would simply put my stop losses in the same region to be honest....

cepheus

This might be useful

Which spread betting firm to use

Be aware that these firms place an extra spread on top of the normal one, and charge financing for the 'borrowed' money. Overall they are generally cheaper than buying shares for short term positions.

It is the short term trading (whether it is spread betting or shares) and associated costs which can gradually hemorrhage the account which is the real danger.

The word 'betting' should remind everyone that is precisely what they are doing when getting involved in the stock-market. This betting is dubbed 'investing' over the long term since the charges are proportionately less, but you are betting that markets will go up long term. Spread betting potentially allows one to make profits (and losses) from dropping markets as well as rising ones.

Most spread betting firms will pay a small bonus to start

blinko

ok just signed up today and deposited £100 and plauyed around on the indexes and managed to lose £50 euurrgghhh but if i had held my position i would be up 50 gggrrrr anyway stopped fiddling around with indexes and now shorted betfair as i feel there IPO has over valued them

turbobob

Loughton_Monkey wrote: »

Flash Crashes are something I didn't comment on, but I agree they happen. I have never seen one that goes up! Hence, being a cynical old sod, I do rather suspect foul play sometimes.

The "short squeeze" can result in very violent upwards moves in share prices. An extreme example of a short squeeze was in shares of Volkswagen in 2008 where they briefly became the largest company in the world by market cap. Brief "dead cat bounces" in down trends where share prices rise dramatically before continuing in their original direction are probably caused by short squeezes.

turbobob

blinko wrote: »

ok just signed up today and deposited £100 and plauyed around on the indexes and managed to lose £50 euurrgghhh but if i had held my position i would be up 50 gggrrrr anyway stopped fiddling around with indexes and now shorted betfair as i feel there IPO has over valued them

This is where being aware of leverage comes in. If you are trading the FTSE at £1 a point the amount of capital at work is £1 x the index i.e. roughly £5700. But the SB companies might let you do that with as little as £50 in your account (over 100:1 leverage). If you start with £100 in your account, the obvious conclusion is if you get it wrong once or twice (unavoidable) your account will be wiped out.

blinko

i know im finding this out the hard way

the problem i have is that long term my bets are good but short term they coudl go either way

i could have made 100% today if i held onto my position but dumbass didnt know what he was doing oh well you have to lose to learn and the lesson is dont trade indicies its more like gambling than an educated guess

anyway gone short on bet fair at £1 i have only put £100 in and get a sign up of £100 so im looking to take 25% profit as soon as it hits or less if my idea changes so hopefuly this will be a nice little entertainer for now

turbobob

Yes short term price movements are very unpredictable. Would suggest having a read of this book - http://www.amazon.co.uk/Financial-Spread-Betting-Handbook-Trading/dp/1897597932/ref=sr_1_4?ie=UTF8&qid=1288630471&sr=8-4