Spread Betting

[sweetandsour]

Spread betting is not zero sum.

The spread betting firms make 100s of millions a year out of the punters

Well OK, we could have a pedantic argument about the exact meaning of zero-sum game

but the point is all the money in it only comes from the punters.

One person's gain is another person's loss.

One person's loss is another person's gain + the market maker's margin + bank fees for transactions etc etc.

[scaramanga]

With this sort of thing the trouble is to limit losses you can use guaranteed stops, but what will happen is the spread cos know where people's stops are and will manipulate the prices slightly to take them out. e.g. FTSE is at 4000 someone has a short with a stop at 4010. Then you find the price goes to 3900 via 4011 and you got stopped out before you could make the profit. Go to any financial forum and you will be able to find tales of woe along these lines accusing the spread cos of cheating, which it effectively is.

I have not done it personally but heard this a number of times. The 'independent' bookies regulator is a chocolate fireguard as are the FSA.

[Andy2]

With this sort of thing the trouble is to limit losses you can use guaranteed stops, but what will happen is the spread cos know where people's stops are and will manipulate the prices slightly to take them out. e.g. FTSE is at 4000 someone has a short with a stop at 4010. Then you find the price goes to 3900 via 4011 and you got stopped out before you could make the profit. Go to any financial forum and you will be able to find tales of woe along these lines accusing the spread cos of cheating, which it effectively is.

I have not done it personally but heard this a number of times. The 'independent' bookies regulator is a chocolate fireguard as are the FSA.

Cheating is rampant in spread betting . I used to do spread betting but found that charts are manipulated and are different from actual charts

[Liability]

Cheating is rampant in spread betting . I used to do spread betting but found that charts are manipulated and are different from actual charts

are you talking about source and charts from the betting vendor?

[Andy2]

are you talking about source and charts from the betting vendor?

yes

[SantaClaus]

I spreadbet for a living now, but I still contribute to these forums as I worked in IT and banking for 20 years.

There's a lot of un-informed opinion on these thread including some very ambiguous sentences!

There are pros and cons of spreadbetting:

Pros:
-It's tax-free, nothing to pay Hector at all.
-You can use guaranteed stops to limit your risk, i.e. to avoid your stoploss being slipped and possibly infinite losses.
-If you can trade well, a very good living can be made using just a laptop from anywhere in the world. There is no boss to answer to and you choose your own hours.
-Your starting capital can be low.

Cons:
-The spreadbetting company takes the other side of your trade (it doesnt get passed through to the market), therefore they want you to lose as they are not there just to profit from a piddly 3 pips spread.
- They can manipulate charts/price, slip your orders, delay entry. I have even seen them crash the platform just before an important news release. These are all standard tricks.
- 95% of traders blow there account.

To avoid some of the above tricks, either use limit orders with a guaranteed stop and preset profit target, or go through a (non dealing desk) futures broker that passes your orders to the market and doesnt take the opposite side of the trade. But be aware you wll then pay tax on profits. Also, if you use a proper broker, you will need to be well capitalised as you are trading full lots. You will also be exposed to unlimited losses if the market gaps or liquidity temporarily dries up, which can happen a lot during news releases.

In answer to brokers/spreadbetters knowing where your stops are, yes they do! Occasionally they have been known to manipulate their own price to spike out your stoploss, when the underlying market showed no spike at all. In this case you should contact them and dispute it.

However they dont have the power to move the real market and take out your stop. Its the big banks that do that and they are not just aiming for your stop, but 95% of retail traders who place stops at the same level (usually above/below a swing high/low on a low timeframe).

Stophunting usually happens during times of low liquidity (news releases, holidays, Asian trading session) when a relatively small amount of money can move the market for a short amount of time.

And yes, charts do vary. I use Metatrader, but there are plenty others.
Wouldnt trust any chart in isolation.

[Andy2]

I spreadbet for a living now, but I still contribute to these forums as I worked in IT and banking for 20 years.

There are pros and cons of spreadbetting:

Pros:
-It's tax-free, nothing to pay Hector at all.
-You can use guaranteed stops to limit your risk, i.e. to avoid your stoploss being slipped and possibly infinite losses.
-If you can trade well, a very good living can be made using just a laptop from anywhere in the world. There is no boss to answer to and you choose your own hours.
-Your starting capital can be low.

Cons:
-The spreadbetting company takes the other side of your trade (it doesnt get passed through to the market), therefore they want you to lose as they are not there just to profit from a piddly 3 pips spread.
- They can manipulate charts/price, slip your orders, delay entry. I have even seen them crash the platform just before an important news release. These are all standard tricks.
- 95% of traders blow there account.

To avoid some of the above tricks, either use limit orders with a guaranteed stop and preset profit target, or go through a (non dealing desk) futures broker that passes your orders to the market and doesnt take the opposite side of the trade. But be aware you wll then pay tax on profits. Also, if you use a proper broker, you will need to be well capitalised as you are trading full lots. You will also be exposed to unlimited losses if the market gaps or liquidity temporarily dries up, which can happen a lot during news releases.

In answer to brokers/spreadbetters knowing where your stops are, yes they do! Occasionally they have been known to manipulate their own price to spike out your stoploss, when the underlying market showed no spike at all. In this case you should contact them and dispute it.

However they dont have the power to move the real market and take out your stop. Its the big banks that do that and they are not just aiming for your stop, but 95% of retail traders who place stops at the same level (usually above/below a swing high/low on a low timeframe).

Stophunting usually happens during times of low liquidity (news releases, holidays, Asian trading session) when a relatively small amount of money can move the market for a short amount of time.

And yes, charts do vary. I use Metatrader, but there are plenty others.
Wouldnt trust any chart in isolation.

Nice info there
You must be pretty good at it if are making a living out of it
What do you bet on generally ?
Do you bet based on technicals only or some other method ?

[SantaClaus]

Nice info there
You must be pretty good at it if are making a living out of it
What do you bet on generally ?
Do you bet based on technicals only or some other method ?

send me a PM

[Churchill]

Nice info there
You must be pretty good at it if are making a living out of it
What do you bet on generally ?
Do you bet based on technicals only or some other method ?

send me a cheque for £50 and you too can share the secrets to my success.

Fixed it for ya!

[SantaClaus]

Fixed it for ya!

If I ever get as low as trading 1 penny a pip, I'll graciously accept.