Spread betting

lvader

I'm currently 6K down on spread betting oil, but I probably gain much more than that from oil prices staying low. It's not a bad way to hedge bets but you need serious cash to cover losses. I got wiped out when oil dropped to about $76. If I didn't have more money to put in that £6 loss would have been crystalised and the pain would have been for nothing if the price of oil shoots back up.

Masomnia

Unless you want either the ability to leverage (not good if you don't know what you're doing) or the flexibility of shorting for example (not good if you don't know what you're doing) then I would leave spread betting alone and get some exposure to stocks through funds while you learn the ropes.

chrismac1

I've been a profitable spread bettor. Is possible to make profits from this, I have not made a fortun doing it but it's just a nice littel hobby which does not take up much time. For hedging all or part of a share portfolio cheaply I would like someone to name a better method!

People who moan about sharp practice from spread companies tend to be losers. I have queried moves a few times with IG Index, CMC and ETX. Sometimes I had missed what the market had done but been able to verify their numbers back to the primary market, other times my positions have been reinstated and the bookie has accepted an error has been made.

New punters in my view should use only guaranteed stops until they gain enough experience. It's all about self-control. I came into spread betting after having made over £70k in sports betting until the bookies cut my bets, so I have self-control well above the average level.

My main rules - increase stakes after a winnning bet, always decrease them after a losing bet, only move your stop losses in the direction of your winning trades to protect profit NEVER for any reason "relax" your stop loss because you have somehow convinced yourself you originally set it too tight.

Sceptic001

EdGasket wrote: »

http://www.timesonline.co.uk/tol/money/investment/article6072968.ece

This article suggests 80% of accounts lose; I have seen 98% somewhere but a newbie is likely to be among the 80% anyway. The problem is that spread betting is not investing; it is short-term gambling and if you have on average half wins and half losses, you lose 2 times the spread on every pair.
The OP saying that stop-losses make it 'risk free' is nonsense. I'll tell you what happens if you set a stop loss: Open bet>check price some time later and it appears not to have moved>check your bet and find out you have been 'stopped out'>query this with the spread bet company and they tell you the price dipped, they closed your bet and then the price recovered> happens all the time, as the spread-bet company is the market maker they can dip the price for a short time to stop people out and make themselves a fortune.
I imagine the successful spread bet accounts use long dated bets to arbitrage with the real market and don't use stop losses.

Thanks for the link.

It looks like a very shoddy, ill-informed piece of journalism, confusing gambling addiction with other spread betting activities, which can range from speculative bets to hedging activities. I looked in vain on the Cass Business School website for the quoted report. 80% still looks high to me.

King_Of_Bling

Any recommendations on the platforms (software)/ charges/ spreads for IG Index, CMC or City Index? Are they all about the same?
(City have a £150 offer with T&C's)

markmh

i guess i need to rephrase relatively risk free. What i meant was that as a smaller amount could be invested in spread betting compared to share the risk of loosing a lot of money is less and the chances of making more when investing less is greater as there is no commission or tax or at least that was my understanding of sb. in any case i was coming at it from a point of view that by "starting off small and the mistakes are cheaper" as blinko said.

As Jegersmart suggests i will have a look at some practice accounts before properly getting involved.

EdGasket

Spread betting is for the pros or losers. Take my advice and avoid it until you have several years of share trading and study under your belt (and even then don't touch it with a bargepole!). If you are determined to lose your money spread betting then don't say you weren't warned.

blinko

EdGasket wrote: »

Spread betting is for the pros or losers. Take my advice and avoid it until you have several years of share trading and study under your belt (and even then don't touch it with a bargepole!). If you are determined to lose your money spread betting then don't say you weren't warned.

I agree avoid it until you have mastered normal investing.

would be interesting to hear peoples views and opinons on spread ebtting companies.

I have IGidnex which have the best selection but slow platform, so not great for trading infact one of the reasons I lost 1k yesterday ouch. reliable too

tradefair, best platform but not that many AIM stocks

cepheus

Lets put it this way, if you spread bet frequently you may win or losedepending on your research and experience, however if you share deal just as frequently with the equavalent exposure, you will almost definitely lose due to the far greater charges imposed by traditional share brokers, and stamp duty, not to mention CG Tax if the unlikely event you do win! I know people who frequently trade shares, and to be frank they may as well write a cheque to these people and save themselves the time!

EdGasket

blinko wrote: »

I agree avoid it until you have mastered normal investing.

would be interesting to hear peoples views and opinons on spread ebtting companies.

I have IGidnex which have the best selection but slow platform, so not great for trading infact one of the reasons I lost 1k yesterday ouch. reliable too

tradefair, best platform but not that many AIM stocks

Blinko, can you tell us honestly whether you are up or down overall on your spread betting?