IG v Etorro

w00519772

I understand the difference between CFDs and buying shares. I also understand the concept of leverage and the financial risk it incurrs. I also understand stop losses.

I currently have a bank account which holds cash and a stocks and shares ISA with Charles Stanley, which I have held for many years.

I am thinking about opening an account with either Etorro or IG (or both). I understand that more people lose money than make money with these platforms e.g. I believe Etorro say 65% of people lose money. However, despite all of this I would still be interested to hear from people who are a customer of one (or both of these providers) and what you think.

Please don't tell me the risks involved in these platforms - I understand this. I am simply asking for views from people who chose one platform over the other (or both) and why you chose this.

Is there anything stopping me from creating a virtual portfolio with both of these providers and then learning more about "investing"?. Again I understand the difference between CFDs and investing for the long term.

WillGates

I use IG and have for quite awhile.
I've had no problems with them and the platform is stable and very good, I'm still on the "old platform" because I just like it. You get the option of using the old or new platform.
IG have all the instruments I want/need so I'll stick with them.

I use them for the Spreadbet Options (Calls and Puts) to hedge the Nasdaq 100 against my SIPP holding.
Gives you the possibility of 'getting money out' of SIPP tax free/dividend off SIPP holding.
With the Spreadbet Options there is no overnight charge, so you just pay the Bid/Ask spread.

Works for me.

Sorry I have no knowledge of Etorro, looked into them awhile back but couldn't see any good reason to change.

On the 65% who "lose money" I like losing money on IG, it means my SIPP is gaining! I usually am hedged 3 long (SIPP) to 1 "short" (IG).

I don't Buy Options I Sell/Write them.

Good luck.

w00519772

Is there anything to stop me creating virtual portfolios with IG sand Etorro to see, which environment I prefer?

WillGates wrote: »

I use IG and have for quite awhile.
I like losing money on IG, it means my SIPP is gaining!
Good luck.

Could you clarify what you mean by this? Are you saying that as one goes up the other goes down i.e. you have conflicting "investments"?

WillGates

You can open a Demo Account with IG.

Yes if the Nasdaq 100 goes up my holding in the SIPP goes up and my holding in IG goes down.
And vice versa.

It gives some protection should the Nas100 crash.

On that 65% lose again, how is it defined?
65% of what lose?
My bet is that 100% of people lose at some point, then gain, then lose...
More than 65% lost in 2008/9.

webjaved

I wonder where they've got the 65% figure from?

N1ckS

Bux disclaimer indicates that 77.7% of retail investor accounts lose money CFD trading with them:
https://twitter.com/bux

Reaper

There was a discussion about eToro recently. It doesn't look great:
https://forums.moneysavingexpert.com/discussion/6030786/etoro-trading-criminal-records

to_jackie_too

WillGates wrote: »

I use them for the Spreadbet Options (Calls and Puts) to hedge the Nasdaq 100 against my SIPP holding.
Gives you the possibility of 'getting money out' of SIPP tax free/dividend off SIPP holding.

I like losing money on IG, it means my SIPP is gaining! I usually am hedged 3 long (SIPP) to 1 "short" (IG).

WillGates wrote: »

Yes if the Nasdaq 100 goes up my holding in the SIPP goes up and my holding in IG goes down.
And vice versa.

It gives some protection should the Nas100 crash.

Sorry to hijack the thread, but this strategy doesn't seem to make any sense.

If your SIPP has more exposure to the Nasdaq than you want, then you could just sell part of your Nasdaq holding inside the SIPP (e.g. 1/3 of it, since that's how much you're hedging), and hold that in cash or something similar (e.g. a short-term, investment-grade bond ETF) inside the SIPP.

You can indeed achieve a similar effect by hedging outside the SIPP. But this introduces extra costs, both explicit and implicit, and carries an extra, unnecessary risk that it will all blow up in your face, because you have to use synthetic instruments to give you "short" exposure.

You claim to be happy whichever way the Nasdaq goes, up or down. But this makes no logical sense. Because

1) In term of overall exposure to the Nasdaq, you apparently are overall long. So you make money when it goes up, and lose when it goes down. So you are not gaining anything when it goes down.

2) In term of tax, you do indeed effectively extract some value, tax-free, from your SIPP when the Nasdaq goes down. But when it goes up, you effectively contribute more to your SIPP, without gaining any tax relief on those contributions.

Putting (1) & (2) together ... When the Nasdaq rises, you gain from (1) but lose from (2); when it falls, you gain from (2) but lose from (1).

Provided that the likely tax rate you would eventually pay to take money out of your pension will be less than 67% (and even going over the "lifetime allowance" wouldn't make it that high), you are still better off when the Nasdaq rises, worse off when it falls. You are surely fooling yourself in being happy whichever way it goes. So why not just scale down your Nasdaq exposure in the SIPP, and stop messing around with derivatives?

w00519772

WillGates wrote: »

You can open a Demo Account with IG.

Yes if the Nasdaq 100 goes up my holding in the SIPP goes up and my holding in IG goes down.
And vice versa.

It gives some protection should the Nas100 crash.

On that 65% lose again, how is it defined?
65% of what lose?
My bet is that 100% of people lose at some point, then gain, then lose...
More than 65% lost in 2008/9.

Is it ok to have demo accounts with both providers I.e. IG and Etorro?

WillGates

w00519772 wrote: »

Is it ok to have demo accounts with both providers I.e. IG and Etorro?

Yes you can have demo accounts with multiple providers.

WillGates

So why not just scale down your Nasdaq exposure in the SIPP, and stop messing around with derivatives?

I am happy with my Net Delta in the Nas100.
I've been "messing around" with derivatives since 1999 so please don't concern yourself too much.

PS. Try taking some lessons in manners.