Spread betting

Adam said:
It's exactly the same :confused: You are betting on an outcome of an event.

I'm also considering this but haven't done enough reading yet.
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Thats like saying that betting on cern destroying the universe is no better than betting on the price of gas and electricity increasing which is blatently false.
 
mangobreeder said:
Killa ken, ignore the people who call you a Mug they in all likelyhood dont understand whats going on, and have never done it before in their life.
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I understand how a spread bet works (it is hardly a complicated instrument now is it) and I also provided some fairly reasonable points arguing against the use of spread betting companies for speculation.

Rather than counter anything I've pointed out you've simply dismissed it and then admitted to being a client of one of these bookies.

thats great, and you can believe all you want, but the reality is that these places are not necessarily an efficient way of accessing the markets and are pretty much equivalent to the 1920s bucket shops that existed in the US pre depression - you might, if you knew a bit about the subject, also realise that this is part of the reason spread betting firms are illegal in the US.
 
JimpsEd said:
Spread betting is no better than betting on a horse.
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probably worse tbh... given that the heavily traded financial markets are likely to be far more efficient than the average horse racing markets I'd say that you've got a much better chance of success trying to find inefficiencies to exploit on betfair than you have trying to find them in a market analysed by countless physics/stats PhDs at various financial institutions and then also overcome the additional costs placed on you by the SB firm.

some people (a minority) will make money at SB firms and fall into (a certain SB firm's) "A book" - always hedged. The majority will be in the B Book which, last time I heard, the head of trading at (a certain SB firm) decided not to hedge at all. Basically the vast majority of the punters lose and the SB firm pockets the entire loss (not just the spread , as some people believe).

Edited to remove name
 
JimpsEd said:
Spread betting is no better than betting on a horse.
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Its worse then horse betting, especially right now in the middle of a collapse.
Horse bet would be a fixed loss, thats closer to a binary bet which some companies do offer.
A spreadbet means the losses are potentially unlimited, a bet of 1 unit could in theory mean you owe them thousands

There is a company which will give you 100 to play with, you dont have to put any money of your own in. Any profit you make is your own, however unlikely that might be also they offer guaranteed stoploss which means you know for sure how much you might lose (by increasing the spread).

Email me if you want brief info on fixed or open loss bets or a referral to a company like above.
Hedging has some merits if you already own shares but I'd agree for almost everyone its a waste of money


If you want the fairy tale heres a good link
http://www.marketoracle.co.uk/Article2499.html

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silversurfer said:
There is a company which will give you 100 to play with, you dont have to put any money of your own in. Any profit you make is your own, however unlikely that might be also they offer guaranteed stoploss which means you know for sure how much you might lose (by increasing the spread).
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The site is iii.co.uk

Why didn't you just post that? They have a spreadbetting academy too.

For those saying huge losses can be made, research what a stop loss is. If your intelligent, you can make a fair amount with the right news stories, timing and stop loss.
 
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Kemik said:
For those saying huge losses can be made, research what a stop loss is. If your intelligent, you can make a fair amount with the right news stories, timing and stop loss.
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What do you reckon the chances are of them executing your stop at the price you placed it at over, say, non farm payrolls?

Anyway it is a fairly irrelevant point, simply having a means to try and reduce potentially large losses isn't going to make you profitable. You need to have an actual edge in order to make money and the way these companies work mean that a lot of the potential ways you could get an edge in the markets are eroded.

Execution is slower and unreliable, prices can/will be skewed at times, you can be re-quoted and the spread can widen significantly (especially over figures/news). Plus you can, at any point, be switched to phone trading only - remember the guy on the phone makes money when you lose and he knows your position & can re-quote you.

What sort of rational person wants to trade like that - IMO mostly just complete mug punters who don't really know/understand what they are doing.
 
Energize said:
Makes money from the referral I assume.
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They dont offer any referal money, theres dozens of other companies which do though. I dont think openly giving a link to something so risky, without discussing it further, is a good idea

Stop losses wont work if the market moves fast and if you check the news it is. Some companies offer guaranteed stop loss which you have to pay for but most dont
 
Kemik said:
Depends how close a stop loss you use to the margin. Obviously you need to give it some space.
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He isn't talking about it getting hit but the price it is executed at when/if it gets hit.

I.e. you are long XYZ market - it is currently trading at 2473 you have a stop at say 2380 - say the market suddenly drops 200 points due to some big unexpected news story your stop could feasibly be executed 200 points lower i.e. at 2270 ish. you might have placed it at 2380 but they are under no obligation to guarantee it will be executed at that price (unless you pay the extra spread for a guaranteed stop that is)
 
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