Spread betting

Diddums

Diddums

Diddums

Caporegime
Joined
24 Oct 2012
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Yer nan's knickers
Anyone do this? I've been looking at some videos on the 'tube and reading some articles and it looks like it could be a bit of fun and maybe even make a bit of profit too. If not, at least it'll be a learning experience!

I've just opened a practice account at IG.com which gives you £10k to play with to start off with. So far I've seen my only open bet (BT) go down by almost £100, but it's bouncing back nicely and is currently sat at -£12.

This is the video that actually piqued my interest.

https://www.youtube.com/watch?v=t1M2Wk6V56s


At the moment I'm very cynical and am keeping an open mind, but am also very hopeful that this could actually turn into a little hobby on the side and maybe even earn a penny or two.

Anyone else here do it?
 
I just closed that trade at £28 profit :D


Not bad for my first go, opening a new bet now. I'll give it a few weeks on this practice account and then go live if I feel it's for me.

I also need to wait for some of my matched bets to come through before I go ahead as I'd like a decent bit of cash to put in to begin with. If this takes off, I'll have gone from £50 to a couple of grand in a few weeks.

It's fun, enjoying it so far.
 
you're more likely to lose money - wider spreads, slippage etc.. make most bets with a spread betting firm a larger negative proposition than placing a trade in the underlying market

it is perhaps useful if you've not got much spare cash and/or if you're just messing around placing bets etc.. but if you were to look at doing this as a serious part time interest then, assuming sufficient funds, you'd perhaps be better off going with a proper broker and trading the underlying futures contracts or equities etc.. (for UK equities you're best of doing so via a CFD - try interactive brokers for example)
 
dowie said:
he's just going to perpetuate the same nonsense you'll read all over the net - albeit he's presented it all well in a nice book that is easy to read
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What do you mean by nonsense exactly? I've read some of the book and generally it seems logical. It's mainly about going in with you eyes open and to try and take the emotion out of it (be logical and level headed).
 
I've done it in the past, and broke even after six months. I don't have the time or discipline to do it properly, just stick to straight equities now.

If you are spread betting because you don't have the capital to invest directly, then you can't afford the risk tbh.
 
alx said:
What do you mean by nonsense exactly? I've read some of the book and generally it seems logical. It's mainly about going in with you eyes open and to try and take the emotion out of it (be logical and level headed).
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Well what edge does any of it give you, what is going to make your trades have a positive expected value?
 
dowie said:
Well what edge does any of it give you, what is going to make your trades have a positive expected value?
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Its aim is more to explain what spreadbetting is, how it works and how to approach it logically/avoid pitfalls to stop you making mistakes and silly 'beginner' errors.

It never pretends to be a guide to make you millions from spreadbetting by giving 'secret' insider tips etc.
 
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Sadly work got a bit busy yesterday so I had to bin it for a bit, but I'll be taking a few positions later on with my imaginary wealth to see how it goes.

The whole thing with me is that I want this to be separate from my regular income and living expenses hence why I'm funding it from my matched betting profits. It might sound weird but this way it remains a hobby that I can look at objectively rather than it meddling with my life as it is. Once I start taking cash from my salary to fund it, that's when my emotions will take over and I'll make silly decisions.

I really need to find an edge though. I think being based in the headquarters of the largest telecomms company in the world might be a good place to start.
 
I may be stating the obvious here, but you are liable for more than the money you put into your trading account when spread betting.

If you're not using guaranteed stop losses and the market moves against you rapidly you can easily find yourself on the wrong of end a large margin call, which *will* involve money from outside your trading fund.
 
Yeah,IG does have pretty solid stop-losses so I should be able to keep it under control.

One thing I've thought is betting both ways. Take a stock, bet it to go up and set a stop loss, and vice versa. That way regardless of which way the stock goes, provided it goes past a certain threshold it's profit, or am I looking at it wrong?
 
Nah, I'm purely exploring the basics at the moment. The more I can learn before putting any real cash on this the better, I'm hoping to make something of it but losing it all in a week isn't my idea of a fun venture!


I do think it's rather telling that most of the replies here are warnings or suggestions to look elsewhere for profit.

Hmmm...
 
alx said:
Its aim is more to explain what spreadbetting is, how it works and how to approach it logically/avoid pitfalls to stop you making mistakes and silly 'beginner' errors.

It never pretends to be a guide to make you millions from spreadbetting by giving 'secret' insider tips etc.
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Yes something like that is perhaps useful if you need some hand holding and or want some basic explanations. However avoiding silly mistakes is likely to merely just make someone lose money less rapidly. The same sort of information is widely available for free online.
 
Diddums said:
Yeah,IG does have pretty solid stop-losses so I should be able to keep it under control.

One thing I've thought is betting both ways. Take a stock, bet it to go up and set a stop loss, and vice versa. That way regardless of which way the stock goes, provided it goes past a certain threshold it's profit, or am I looking at it wrong?
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yup you're looking at it wrong, two opposing trades make you flat, I don't know what they offer you on your IG platform but that is equivalent to placing two stop orders to open a trade above and below the market... except what you're proposing involves placing two trades initially which means you'll cross the spread twice and incur double the cost. I'm not sure you'd be able to do it even as one trade should simply close the other - then again some FX bucket shops allow this sort of thing as it seems popular for some retail FX punters....
 
dowie said:
Yes something like that is perhaps useful if you need some hand holding and or want some basic explanations. However avoiding silly mistakes is likely to merely just make someone lose money less rapidly. The same sort of information is widely available for free online.
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True, you could find most of what is in it on the internet - but I only bought it for £3-4 so it seemed worthwhile to have the information, in an easier to read/reference format, all in one book.

I'm not trying to say it's a must have, but if people are interested in spreadbetting it's a useful book to give a fairly comprehensive overview and some basic ground rules.
 
I've spent some considerable time reading, watching vids and generally trying to learn as much as I can about this. I tend to go overboard when it comes to things like this but I want all my bases covered 100% before I commit to anything.

So far, I've found that 99% of the stuff you find online either has an agenda or is written by people who got lucky once and suddenly think they're experts. Same for Youtube. Loads of people sharing "secrets" and "tips & tricks" when many of them are just average joes who struck gold once or twice and think they're excellent day traders.

I'll be posting my thoughts and experiences here as I learn them and go through all this in the hope that maybe someone can prevent themselves from losing a ton of cash on what could be perceived as gambling. Nothing I say is gospel, don't forget I'm also learning here so if you have a differing opinion that might help myself or others, maybe even you, to form a better strategy, then by all means share it.

I've found a few resources which are quite good so far, one for the basics:

http://www.sharesmagazine.co.uk/articles/the-key-steps-to-successful-spreadbetting

As per the article above,If you go to GFTUK.com you can get quite a bit of interesting reading material free of charge too. I signed up and got a couple of their PDF documents to read. I haven't opened them yet though, so please keep that in mind. I'll have a read on the tube this evening.

Another interesting person on this matter is Zak Mir. I have no idea who this guy is but he speaks some very solid sense. I found a few interviews on this channel.

As it happens, I'm currently £350 down on a position I opened on the Hong Kong HS50. I've set up a stop loss at £400 and it's been bouncing around all day so let's see where it goes. I've seen it go up to £30+ so I've set a limit there, if it falls on its bum I will have lost £400 max but it's been bouncing around quite a bit so it *should* hopefully hit that £30 again. Not much profit but given I've only been in the position an hour, if it does it quite quickly and it was real cash, I'll have earned a bit more than I would've working, which I suppose is the point.

I picked that option out of the hat on IG's Signal Centre so it's largely a gamble but at this point in time I'm also trying to learn how the system works and get a full understanding of how everything pieces together before I start researching a stock or currency which turns out to be dead wood.

Stay tuned for more adventures of "How Diddums flushes £10k in virtual cash down the pan!"
 
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