Shares & Trading (Spread Betting)

#1

Financial Spread betting… Does anyone do financial spread betting? I’ve never done it but am interested in starting. If you do, what sites do you use and what kind of markets do you bet on? Also how do people do their research?

Cheers!

#2

I use CMC Markets when i spread bet. You can bet on any type of market from futures in oil to the ftse 100 etc. I personally traded stocks i liked. You will learn when trading on the ftse you can lose and gain a lot of money very quickly.

You are basically betting per point different. For example, the FTSE will usually go up or down by 30 points each day for example. If you long it (you want it to go up) and you put £1 a point on it and it went up by 30 points you will make £30.

However, I strongly suggest you place a stop order loss which means you can stop your bet immediately if it goes to a point where you don’t want to lose any more money. The markets are very volatile at the moment and you could find yourself in some difficult situations - also look at the different between stop orders and guranteed stop orders - VERY IMPORTANT DIFFERENCE!

Basically, i went to the CMC trading school they held in London. The guy said that you lose a lot more trades than you will win. BUT, if you diversify and place sensible stop orders you will make profit. Also, for research this is personal and people use different methods but for inspiration i would watch MILLION DOLLAR TRADERS that has been on TV recently because that was basically spread betting, and look at their methods.

#3

Ah! I saw Million Dollar Traders - great programme! But didn’t they make about 1% profit in three months? I could do better than that in a current account at RBS!

So, is spread betting essentially the same as the operations in a hedge fund?

#4

The difference between spread betting and hedge fund is that hedge fund you actually buy or short the shares so you own them. Spread betting you are just betting whether they go up and down and how much per point so you never actually own them.

They are basically a bet because in terms of law CMC Markets dont have to pay out your winnings the same as bookies don’t if you win a bet. However, you can buy what are called contracts for difference (CDO) from CMC Markets which are the same thing as spread betting, but in terms of law they have to pay you. However, spread betting you dont pay tax and CDO’s you do have to pay tax. CMC have been going for a long time so are very unlikely to not pay out so i would rather save the tax.

Hedge funds are just aggressive strategies that include short selling, abitrage etc. So spread betting is a form of what hedge funds do. Its all about diversification and hedging from what i have learnt!

#5

How are you doing at the moment? Isn’t the stock market making everything very difficult to judge?

In spread betting, if you made a bet that a company’s shares will go up by ten points, do you have to state the time period? E.g. do you have to bet that RBS share price will be up ten points at 2pm tomorrow, or can you just bet they’ll go up, then if they go down in value, hold your bet and “cash it in” when the share price goes up again?

#6

I am not trading at the moment, still a student so not got enough money since for £1 point you place you need about £50 capital on since it could go up or down quickly and so CMC take around £50 just so you could pay for your losses.

You dont bet on a time period. Say you think that the ftse will rise tomorrow. When the markets open tomorrow you press on the trading program that you want to long £1 on the ftse100. Straight away it brings up the profit and loss figure so you can see how your doing. As the time unfolds you will either see how the profit rises or falls depending where the ftse is going. It is personally up to you when you sell, so it could go up to 40 points (£40) and therefore you close your position. It doesnt matter then if the market rises or falls because you will not have an open position. I usually left an automatic order sell so if i made £30 if would automatically close my position so if you couldnt watch it all the time.

So basically, you can open and close trades all the time and it is easy to see your profit/loss. Although, i recommend not sitting and watching the arrows asd the profit and loss goes up and down every few seconds - drives you mental!

#7

Ab304 what exactly do u do for IG? How did u apply and what qualifications did u require? I’d love to work for a spread better.

I use IG index for short term commodity trades at the moment. There trading platform is very good. Bloomberg is good for research although it’s normally slightly delayed but free. Their economic calender is good.

#8

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