Spread betting

lvader

It's interesting watching people spead bet on III, you get a few people advtertise their bets so that you know what they are. I imagine quite a few people got wiped out again today due to stops put in place. FTSE 5000, Oil $80, DOW 10800 etc.

EdGasket

cepheus wrote: »

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!

You miss the point that if you buy shares and are 'out of the money' for a while, you are not compelled to sell them. Rather for no cost, you can keep them as an investment for better times. With a spread-bet you are compelled to close out at a loss or rollover the bet with a further spread and a margin call.

I believe the way to make money is by generally long-term investment. Short term, prices vary randomly as in a casino and if you don't have an edge (inside information) you will lose whatever trading platform you are using. That is why the companies are pushing spread-bets and CFDs so much; it's good business for them which conversly means it is not for the punter.

blinko

EdGasket wrote: »

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

Down but thats not beacuse i spread bet, thats because i picked shares at the wrong time and computer problems. the onyl reason I spread bet is because I have around 3k and want to get exposure to around 6k

You miss the point that if you buy shares and are 'out of the money' for a while, you are not compelled to sell them. Rather for no cost, you can keep them as an investment for better times. With a spread-bet you are compelled to close out at a loss or rollover the bet with a further spread and a margin call.

I believe the way to make money is by generally long-term investment. Short term, prices vary randomly as in a casino and if you don't have an edge (inside information) you will lose whatever trading platform you are using. That is why the companies are pushing spread-bets and CFDs so much; it's good business for them which conversly means it is not for the punter.

you just pay the spread again ?? if you dont want to pay spread simply get a long contract

cepheus

EdGasket wrote: »

You miss the point that if you buy shares and are 'out of the money' for a while, you are not compelled to sell them. Rather for no cost, you can keep them as an investment for better times. With a spread-bet you are compelled to close out at a loss or rollover the bet with a further spread and a margin call.

You are talking about quarterly contracts. These are inflexible in my opinion and you should stay away.

For equivalent share contracts go for the rolling bets, you can keep them open indefinitely and pay less interest on the borrowing than you could make in a savings account!

chrismac1

I can tell you that 95% of sports bettors lose and I'd expect 90% or so of financial bettors to lose. I have not looked into financial betting statistics to the same extent as sports betting, but I believe the following will apply:

A decent minority of losing sports bettors are in fact pretty good at picking winners. I used to bet on rugby, you had to win 54% of the time to make money. It's easily possible to hit 56% and go bankrupt. I was hitting 60% but in the course of about 1,500 bets I had one winning streak of 12 in a row and one losing one of 9 in a row.

Neither of these runs was statistically significant. But both would have killed me if I had the wrong sort of staking system. A lot of people who are good at picking winners hate having losing months, so tend to increase their stakes when they have lost a few. 9 in a row could easily kill off such a punter. Likewise many such punters get carried away with themselves on good runs and could easily both lower their standards and start placing much bigger bets as the run of 12 in a row builds. I was increasing my stakes in this run - by about 80% in the course of the whole run - but my standards remained constant, just as what constitutes a BUY or SELL for me on spreads or shares or FX remains constant.

You need to be fully in control of your emotions with your ego outside the room.

PJC89

i would stay well clear of spread betting unless u have the capital to start with. i tried it once with IGindex and was very unsuccesfull.

Tom_Pickering

PJC89 wrote: »

i would stay well clear of spread betting unless u have the capital to start with. i tried it once with IGindex and was very unsuccesfull.

Although it may have been an experience you would want to blank out, would you care to share any particular points which caused your losses? What sort of capital would you need (excluding FX)?
Thanks

innovate

what about spread bets arbitrage? (like sports betting arbitrage). Does that work? Are there arbs? do they kill your accounts if they suspect you arb?

experience08

innovate wrote: »

what about spread bets arbitrage? (like sports betting arbitrage). Does that work? Are there arbs? do they kill your accounts if they suspect you arb?

I'm not an expert, but the only way i could see this work is if you are arbing a stock which is quoted on DOW and FTSE (for example) and there was a spread between the two, taking into account currency conversion.

cepheus

You could trade with the same instruments on CityIndex and Finspreads (on say FTSE100) in different directions for a £100 bonus off each. You need 3 trades each.

Others cover your losses up to a limit. You would need a guaranteed stop to do this completely safely though. Here are some of the offers.

http://www.cityindex.co.uk/trading-credit-offer.aspx

http://www.spreadbettingcompanies.com/spread-betting-offers

Consider using binary betting for hedging as well, I suspect this is easier because there is a winner and loser as in sports betting.