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Send Email. What would you like to talk about? Start WhatsApp. Start Web Chat. It's what they want to achieve in terms of a return at the end of the day. It's going to reflect in the way they trade a spread bet. Jones: What about the mechanics of buying or selling. It's not the same as ringing up a stock broker and saying, 'Hello, I'd like to buy shares in BP', is it?. Let's say, for example, I think that over the next month BP is going to go up.
To keep things easy, we'll talk about the bets that expire every day. How do you quote and what do I need to say? This is the simplest way to look at it. Obviously 1, multiplied by the price of the bet gives you the total consideration. It's up to you.
Actually you generally find that some of the dealers are very, very helpful in explaining this. Ian Jenkins, Cantor Index: One of the biggest tips I would ever give a new trader is never show your hand. A market professional would never say, 'I want to buy this amount, what's your price?
Just ask for a two-way price and deal pounds per point where you want to. You sell it at its bid price, you buy it at its offer price. It's way easier than clients sometimes think. They'd say it's , or whatever. Jones: That's easy, then! Let's talk about how people actually trade - are most of your clients day traders, in and out of Vodafone five times day?
Are they short-term, days or weeks, or are they trading over a few months? When we invented Rolling Cash a few years ago it allowed customers to trade intraday and over a shorter period - far simpler than trading out to a future date. But it's just as simple to trade longer term and we're finding now that we have a good blend of clients who do trade intraday or over days, weeks or months.
Ian Jenkins, Cantor Index: Typically 10 years ago we would have had more City types but it's everybody these days - housewives, everyone. Patrick Latchford, Finspreads: Finspreads has probably got one of the most diverse client bases.
Some of them are thinking about taking it up seriously as a parttime career, others are doing it purely as a hobby. What's happened over the two or three years is that a lot more people from many walks of life are having a go at spread betting. Tom Hougaard, City Index: We're starting to see a new trend where people treat it more as an investment - they're running a particular stock up or down, short or long, and once they're done they take the money back out and we might not hear from them for the next three months.
Tom Hougaard, City Index: People are always talking about the stock market dropping from year to , and they put it into the context of some kind of national or worldwide tragedy. But applications and new accounts were rising during this period while the stock market was falling because people realised, 'this is beautiful, I can actually make money out of the market dropping every single day'.
We don't see a bear market as some inherent evil. We just want trends. We want it to go up or down. Jones: For a lot of people, short selling is an alien concept. Tom Hougaard, City Index: We often see stocks fall a lot faster than they are rising. A lot of City Index clients came to us during the bear market purely because they realised you could make money from falling markets.
Patrick Latchford, Finspreads: If you're only taking advantage of the up movements, you're effectively missing out on half of the opportunities. If the market goes down, the spread bet gives you the opportunity to benefit from that if you make the right call.
Jones: There have been some heated discussions over the last few months from people who say that derivative products like CFDs and spread betting - which allow people to profit from falling share prices - are ruining the stock market for investors. What would you say about that?
It makes just as much sense for companies to lose value when they're underperforming as it does for them to increase their value when they're doing well. And I don't see any problem with a company's value being accurately reflected by as many minds and investors in the country coming together and deciding what the price should be.
Ian Jenkins, Cantor Index: There's also the question of scale here. If you put all the spread-betting companies together, their percentage of stock-market trades is still minuscule compared with those of hedge funds and pension funds, and these have always had the ability to go short, so you're only introducing a tiny dynamic into the London stock market.
Dan Moczulski, IG Index: And all you're doing with spread betting and CFDs is allowing the retail client to do what institutional clients have been doing for decades. Patrick Latchford, Finspreads: If the institutions see a few spread betters moving a price down and there's value in that stock, you can bet your bottom dollar they've got deeper pockets than all of us and they'll invest in that stock straight away, so it's not as if we can influence a stock down.
The institutions with all that money behind them will always buy into value. Derivatives provide more flexibility in the market, which in the long term is better for the private investor. Jones: Let's talk about another conspiracy theory. It is, I think, a common misconception that when it comes to things like stop losses, you make money by me losing money. Tom Hougaard, City Index: No, we are purely a reflection of what's going on in the underlying market.
Spread betters have no interest in their clients losing. We are purely reflecting what we see on the screen and when the price is trading there we have no option, we have no choice but to adhere to stop losses. Dan Moczulski, IG Index: None of the firms here has the facility to push one price to one client and a different price to another client.
Jones: And if that was what companies were trying to do then someone's disadvantage would be someone else's advantage. Jones: Online trading has seen a massive boom over the last three or four years. All of you offer telephone or online trading but does either method make any difference to an investor? Patrick Latchford, Finspreads: The majority of our clients use our on-line trading facilities.
They find it convenient, easy to use, easy to understand and very straightforward. However, we have a number of clients who like to talk to someone at the other end of a telephone when they're putting a bet on. Ian Jenkins, Cantor Index: I think a lot of our clients would disagree with that. They get to know a broker and feel more a part of it, trying to work an order - what do you think you can get me at this level?
What's the market showing? A lot of older clients wouldn't go near a screen: they have an inherent distrust, particularly in the opening minutes of a stock market when there are very, very wide spreads - they need the dealer then to show market depth and stuff like that. I think a lot of our clients would be lost without our dealers. The clients like not having to talk with people, they like dealing with facts and figures, they like seeing the price they're dealing at - they're not waiting for a human to get them a price.
Ian Jenkins, Cantor Index: The thing is you don't always have the internet with you - you can't walk the streets with a PC. Admittedly now we've launched mobile, you're able to deal effectively on a Palm Pilot, but I think clients like the relationship with dealers. Some prefer the phone, some the internet, some the mobile dealing platform. One important aspect is that even if you prefer to deal on-line all the time you have to make sure there is adequate phone back-up.
To use the analogy of a cash machine, if it's not working you've got to go into the bank. It's important to cover all eventualities. Jones: Let's talk about opening a position. Say I'm chartist and I know the high for the year on the FTSE was and I think - if it breaks through here I definitely want to be a buyer because I think it will go through the roof.
How can I use an order to get me into that position so I don't need to sit there and watch the screen all day? Is there a way of using a stop order to get me into a trade? Ian Jenkins, Cantor Index: Absolutely. Simply put, it's an 'opening stop'. You can open and close with stops and limits. With a stop - whether it's an opening or closing stop - you're always looking to do a deal at worse than the prevailing market level.
With a limit, whether it's opening or closing, you're always looking to do a deal at better than the prevailing market rate. Jones: Let's say that is the big level. Ian Jenkins, Cantor Index: And you can then leave a stop on the back of that. I could say - I want to buy here and if that order gets filled I want to have a stop loss at , for example, so I can automate the whole thing.
Dan Moczulski, IG Index: A good example of when you might use it is if a piece of news is coming out and you don't know whether it will be good or bad. Let's assume that you're hoping it is good news and that the market will ramp up.
Leave an order to buy the market 20 points above where it is. Jones: So you're buying into the strength, banking on that strength carrying on. Next, let's talk about limit orders. If BP is trading at and I want to pay , all of you will take limit orders to buy at that price. They're effectively orders to sit there waiting to see if BP trickles down and the order gets filled.
The spread betting companies will do the work for me. Four or five years ago, this was something you couldn't do through a traditional stockbroker. There are some now who will take limit orders and stop losses but I think this whole order process has been driven by the spread betters from day one. Tom Hougaard, City Index: You're absolutely right - you can do everything on-line.
You can put in your limit order, put in your stop loss if your limit order is initiated, and the next step is to trade in stop losses. We have a process where once your position is going into profit it continuously moves your stop as the stock price goes up. Jones: What can spread betting companies give me to help me understand more? Patrick Latchford, Finspreads: Finspreads has a specialisation in this area.
We like to think we're the home for people who have never spread-betted before, for a number of reasons. Firstly we have a Training Academy which takes them through eight easy steps of how to understand what a spread bet is and all the implications around spread betting. We educate those clients over an eight-week period. We allow them to trade in very small size during that period, as little as 1p a bet. That allows them to get a feel for what's going on - not on the demo cam but in the real market.
Our investors and new clients find that very useful - it allows them to learn the intricacies of the software, shows their account balances, the effects of the trades, the values of the trades - everything you need to know to manage your positions.
We also offer weekly seminars that you can attend on spread betting, technical analysis and fundamental analysis, along with the various packages we offer through the software such as charting and fundamental news. All that's supplemented with television that everyone can tune into. Jones: Dan [Moczulski], what sort of stuff do we get if we open an account with IG?
One other service offer we're keen to stress is that clients also get an account manager, and we have a team of people to help you before you open the account. Opening the account doesn't cost anything, doesn't require you to put a deposit down, and you have a manager who sticks with you for the lifetime of your account. Learn from the account managers, ask them questions to make you feel comfortable before you trade. We'd all agree that a situation where a client does not understand how a bet works after he's placed the trade is unattractive to both parties.
We stress that if there is anything a client wants to go through, they can just give us a call or send us an e-mail. We will do everything we can to make sure our clients are comfortable with how spread betting and their accounts work. Ian Jenkins, Cantor Index: One of the main ways people will break their fear barriers down is by talking to dealers and coming into the office.
We have a Monday night when people can come in and as soon as they meet the dealers they realise it isn't nearly as fearful as they think. Jones: How about other markets? Oil or currency, for example - there's never a dull moment in those. Is it an easy transition from investing in shares to spread betting in the wider markets? Tom Hougaard, City Index: People need to make sure they understand what they are going into. If you are trading the oil market, you might find yourself on the right or the wrong side by a significant amount.
Whenever you go into spread betting, it does help if you have a pretty good idea of how the markets move, especially if you start trading the more volatile instruments like currencies or commodities. In spread betting terms that's a point movement and very significant.
Clearly many also trade shares, but increasingly where you see the more volatile markets - such as currencies and the commodities - people are getting into the game. But if we can take the analogy of going to university and studying for maths, the last thing you'd do at the end of a three year course is take your exams in biology, because you're going to fail. It's very important to be comfortable in what you're trading and to educate yourself.
Allow the spread betting firm to help you - don't just jump into a market you think you're going to be able to take advantage of. It's always better to take these things slowly, bet small amounts in the first instance and feel your way in. Jones: A big thing that spread betting does for individuals is allow them to decide their own levels of risk. With a spread better you can wind that risk down to a dollar a point or even lower.
Jones: If I fancy the idea of putting a small amount of money into an account and starting to learn about spread betting, and all I've done for the last couple of years is bought and sold shares through my stockbroker, what do I need to show you to get an account?
Do I need to prove I'm massively experienced? Geoff Langham, CMC Markets, CMC Group: A key difference with spread betting is that you're classified as a private customer and as such do not need to show that you have previous trading experience.
You do, however, need to show that you have an appreciation of the risks involved. The rest of the process is very simple and quick - prove your identity and address, sign a terms of business contract, fund the account and off you go. Dan Moczulski, IG Index: We can, and I think several firms are the same, set up the whole thing over the internet in a few minutes.
Patrick Latchford, Finspreads: If you want to have a go, you can go on-line with Finspreads. Jones: What measures to do you have in place to protect people from themselves? Dan Moczulski, IG Index: First, we won't open accounts for people who are unsuitable - a typical student, say, whose income is his or her grant.
Secondly, when they've got an account, they all have limits attached that we allocate through the risk profile and the circumstances of the client, so they don't make any mistakes that would potentially lose them far more than they anticipated.
We even have what we call a limited risk deposit account where you can't lose any more money than you've specified you are willing to risk. Tom Hougaard, City Index: We do consider every single applicant, whether we find them suitable or not. Ian Jenkins, Cantor Index: There's a financial constraint as well. If you put due diligence in at the start you can prevent much of that. Jones: The last few years has seen an explosion in spread betting.
Do you think it could spell the end of traditional share trading? And is the stock market feeling the pinch? Some people will always prefer to deal in a way that they've been accustomed to over the years. People also gain benefit if their view on the stock is long-term. What I do think it means is the large institutions losing business to companies such as ourselves, more at the retail end of the business, because the advantages we offer are superior to the traditional share trading house.
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Trade over 17, markets With our huge range of markets so we don't attach our. To avoid paying overnight funding, DMA-specific platforms which require blackjack side bets on 3 card hand on futures for indices and. Spread charges apply to CFD for full shares commissions. Trading with APIs Automate your widens, so does ours - to find out more. You can choose to pay a deposit to open a position, and we in effect lend you the rest of data streams and more. The Volatility Index and EU could lose more than expected, for long-term trades, because you that you may profit more the outset. To see the full details for a market, follow the. In each instance, a minimum all our share CFD commissions. To speculate over the longer in the overnight funding section. During the underlying market hours way to speculate on the future price of a financial on the FTSE When we you to offset losses against you can benefit from hour dealing, we offer a wider When you trade either of.prices is referred to as our Spread and will comprise the Market Spread (where your Bets or on any Spread or Charges payable by you pursuant to this (8) Nothing in this Agreement shall limit our liability for personal injury or death. 75% of retail investor accounts lose money when trading spread bets and CFDs The short- to medium-term range for the price of gold is considered between to the longer-term bearish signal inferred by the 'death cross'. CITY spread betting house IG is splashing out $1 billion to buy With share prices booming and US markets hitting highs, IG said the move to.