A dabble on the market

morganedge

MrOrchard wrote: »

I'm tempted into the world of Spead betting (IG Index et. al) but am fairly new to this, whilst I understand the principles and the markets to a degree, i'm not really clear about the charging structure in place.

Does anyone out there have any sage advice?

Thanks, Mr. O

There isn't a 'charge' as such. They make their money on the spread (the difference between the price you can sell at and the price you can but at, at any given time)

Say you want to go long the FTSE, it might be 5000 / 5004
You buy £1 per pip at 5004 and you are already losing £4 even though it hasn't moved, because if you were to sell now, you'd sell as 5000.
You need it to tick up 4 pips just to break even.

Other than that, there can be some small overnight charges, although sometimes they'll pay you to hold trades overnight too.
Depends on the instrument, and whether you are 'long' or 'short'.

I'm up somewhere around 3.5k this year, and I trade at tiny stakes.

That's another thing - If you were to go for it with a live account, I'd recommend an account where you can trade really really small.
Under £1 per pip, because even at £1 per pip, you can wipe a huge chunk of that 1k with a very bad days trading.

Biggles

morganedge wrote: »

Other than that, there can be some small overnight charges, although sometimes they'll pay you to hold trades overnight too.
Depends on the instrument, and whether you are 'long' or 'short'.

The overnight funding charge used to result in a payment to you when you were Short, but that was when interest rates were higher. Now you just pay IG less. The only time they pay you overnight is when you are Long and a dividend is paid; obviously, it works the other way round if you are Short.

morganedge

I'm currently being paid overnight on my cable (GBPUSD) long position

morganedge

how about trade a live account with the houses money:
http://www.intertrader.com/legal/100free_dem/

sabretoothtigger

^^ A demo account usually means no real money, pretend trading only.
They are offering to give 100 extra if you deposit 500, is that right. These offers can be tricky, I saw one recently requiring trades of a million before it paid which goes against the idea of keeping things small while basically knowing nothing

morganedge wrote: »

I'm currently being paid overnight on my cable (GBPUSD) long position

We have higher interest rates then USA so you borrow dollars to deposit sterling.
Still UK is 0.5% only so Im surprised it pays after they deduct overheads or whatever but AUD/USD would be quite nice maybe, presuming its not a horrible loss from strong dollar

morganedge

sabretoothtigger wrote: »

^^ A demo account usually means no real money, pretend trading only.

Yes,
It's a bit confusing, but as I understand it, that offer is for people who open a live account with that particular firm.
Open a live account, email them quoting the 'free100' promotion, and they put £100 in your account.

I don't have a live account with them yet, but may open one to see if I can make a few quid with them.

I have lots of live trading accounts.

cepheus

MrOrchard wrote: »

I'm tempted into the world of Spead betting (IG Index et. al) but am fairly new to this, whilst I understand the principles and the markets to a degree, i'm not really clear about the charging structure in place.

Does anyone out there have any sage advice?

Thanks, Mr. O

I have a spreadsheet here

Always think in terms of what the value of shares would be, so if you buy to open a 'share' worth 100p at £100 per point you are effectively buying 100 x 100 = £10,000 worth of shares (see lower table to convert). Providing you realise that, there is no essential difference to buying the shares (although the dividend return can be different depending on the spread betting company).

The 'problem' is that the overall 'charges' can be cheaper, (the top table gives you the 'saving' relative to conventional share dealing) so it tempts you to trade more. Assuming you buy the equivalent amount is the excessive trading and quality of decisions which is the danger not the spread betting as such.

gkerr4

morganedge wrote: »

There isn't a 'charge' as such. They make their money on the spread (the difference between the price you can sell at and the price you can but at, at any given time)

Say you want to go long the FTSE, it might be 5000 / 5004
You buy £1 per pip at 5004 and you are already losing £4 even though it hasn't moved, because if you were to sell now, you'd sell as 5000.
You need it to tick up 4 pips just to break even.

Other than that, there can be some small overnight charges, although sometimes they'll pay you to hold trades overnight too.
Depends on the instrument, and whether you are 'long' or 'short'.

I'm up somewhere around 3.5k this year, and I trade at tiny stakes.

That's another thing - If you were to go for it with a live account, I'd recommend an account where you can trade really really small.
Under £1 per pip, because even at £1 per pip, you can wipe a huge chunk of that 1k with a very bad days trading.

totally agree! - a £1 a point can quickly gain or lose on a volatile stock! - you have to hunt out the ones that move a number of points on a daily basis - no point having a £1/point on a company that only moves a point or two a day. FX is good for this.

I opened an account in the summer when i was off work for a period - i put £300 in it and it is currently sat at £507 - it has been has high nearly £700 though (and as low as £100!) - ok, so it's inly £200 up, but it's a whopping % gain.

its fun and interesting - the science behind herd mentality is interesting also - i think if you have a bit of money and want to try then go for it - imo the 'worst' think you can do with a few hundred quid is put it in a 'fund' as some have suggested - what would you hope to get from it? Practically nothing!

anyway - enjoy

spender

Did MrOrchard ever update on his success or loss?

bowlhead99

spender wrote: »

Did MrOrchard ever update on his success or loss?

Nah. A few posts around the same time on a "100 ways to make £80" thread, then some on a losing weight thread, and finally how to borrow money on your mortgage to do some home improvements - nothing in the last year since.

If you ask a gambler how they did, or how they're doing, they'll either tell you about all their awesome wins... or if if goes the exact opposite way they'll tell you they are "up a bit, down a bit, pretty close to breakeven but I'm not tracking it all to closely, it's just a bit of fun". Rarely will they come back of their own volition and say they lost their shirt and the wife won't let them do it again.