Discussion
jonamv8 said:
The cost was in the initial spread. 1 point on FTSE and 1.2 points on both Forex.
My FTSE was manually closed as I felt it had run it's course, however I could have hung on for a few more points but I had stuff to do.
My GBP/USD was auto closed as it hit my limit.
My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.
OK,let's pretend I'm a complete novice and ask you to explain ALL the jargon on this post.My FTSE was manually closed as I felt it had run it's course, however I could have hung on for a few more points but I had stuff to do.
My GBP/USD was auto closed as it hit my limit.
My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.
I do know what the FTSE,Forex and the currency abbreviations are.
avinalarf said:
jonamv8 said:
The cost was in the initial spread. 1 point on FTSE and 1.2 points on both Forex.
My FTSE was manually closed as I felt it had run it's course, however I could have hung on for a few more points but I had stuff to do.
My GBP/USD was auto closed as it hit my limit.
My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.
OK,let's pretend I'm a complete novice and ask you to explain ALL the jargon on this post.My FTSE was manually closed as I felt it had run it's course, however I could have hung on for a few more points but I had stuff to do.
My GBP/USD was auto closed as it hit my limit.
My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.
I do know what the FTSE,Forex and the currency abbreviations are.
When I say manually closed, I manually executed the trade to stop as opposed to having a predetermined stop point.
Let me know if I missed anything?
I've just gone long (BUY) on Bund. 11/08/16 13:30:18
Open 167.78
Stop Limit 167.57 to protect me against losses, potential loss of 21 points
Auto close trade at 168.48, a potential gain of 70 points although in reality I'd probably manually exit before but I could get called out of the office
Wish me luck
Open 167.78
Stop Limit 167.57 to protect me against losses, potential loss of 21 points
Auto close trade at 168.48, a potential gain of 70 points although in reality I'd probably manually exit before but I could get called out of the office
Wish me luck
jonamv8 said:
avinalarf said:
jonamv8 said:
The cost was in the initial spread. 1 point on FTSE and 1.2 points on both Forex.
My FTSE was manually closed as I felt it had run it's course, however I could have hung on,,, for a few more points but I had stuff to do.
My GBP/USD was auto closed as it hit my limit.
My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.
OK,let's pretend I'm a complete novice and ask you to explain ALL the jargon on this post.My FTSE was manually closed as I felt it had run it's course, however I could have hung on,,, for a few more points but I had stuff to do.
My GBP/USD was auto closed as it hit my limit.
My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.
I do know what the FTSE,Forex and the currency abbreviations are.
When I say manually closed, I manually executed the trade to stop as opposed to having a predetermined stop point.
Let me know if I missed anything?
You're sitting there watching the screen and make your decision to buy/ sell ?
If so,in the seconds it takes to deal,the position could change,how do you avoid that delay.
When I bought the shares on HG the price I was offered was a tad more than the live price I'd been looking at on my screen.
Was that me or is that how it always is ?
I don't have the time to watch the screen all day so can I put in a deal to buy the share in a future date at a price I decide ?
Is there a charge for having a predetermined stop point ?
Is there a charge for the stop/loss facility ?
How do you limit exposure to losses whilst spread betting and is there a charge ?
Re. Points how do you equate that with cash value ? Do you put in the cash/point ratio before you deal ,that is say £50 a point.
On that basis if the FTSE lost 10 points you'd lose £500 ?
Do you have to pay dealing costs and stamp duty spread betting ?
Edited by avinalarf on Thursday 11th August 14:21
jonamv8 said:
I've just gone long (BUY) on Bund. 11/08/16 13:30:18
Open 167.78
Stop Limit 167.57 to protect me against losses, potential loss of 21 points
Auto close trade at 168.48, a potential gain of 70 points although in reality I'd probably manually exit before but I could get called out of the office
Wish me luck
Good luck.....so that's 50/50 if you win....sharesy,sharesy. Open 167.78
Stop Limit 167.57 to protect me against losses, potential loss of 21 points
Auto close trade at 168.48, a potential gain of 70 points although in reality I'd probably manually exit before but I could get called out of the office
Wish me luck
Edited by avinalarf on Thursday 11th August 14:30
So you're spread betting on the FTSE going up or down,obviously different than share day trading ?
- You can spread bet on shares too. And lots of other things. (Commodities, options, politics, house prices etc...)
You're sitting there watching the screen and make your decision to buy/ sell ?
- Yes.
- Although if you have set up with a stop and/or limit, you could just let it run.
If so,in the seconds it takes to deal,the position could change,how do you avoid that delay.
- There is no delay. Your order changes in front of your eyes as you set it up. When you place it, that's the price - or better.
When I bought the shares on HG the price I was offered was a tad more than the live price I'd been looking at on my screen.
- Sometimes the live price is the mid-point of the bid-offer (aka the spread) - there is always a spread.
- Or you were front run by HFT!
Was that me or is that how it always is ?
- Will always happen.
Is there a charge for having a predetermined stop point ?
- On IG there is no charge unless you want a GUARANTEED stop.
- Stops can be missed if there simply isn't the liquidity to close it.
- For example, if there is very bad news overnight, the ONLY available offer to buy (say) might be down -10%. If you had a stop down -5%, then since it isn't physically possible to close just down -5%, you get hit for the full -10%.
- Unless you go for a guarantee in which case, IG eat the extra loss and you get just -5%.
- They do charge for this with a wider spread.
Is there a charge for the stop/loss facility ?
- No, other than the guarantee above which isn't mandatory.
How do you limit exposure to losses whilst spread betting and is there a charge ?
- Use stops, as above.
Re. Points how do you equate that with cash value ? Do you put in the cash/point ratio before you deal ,that is say £50 a point.
- You set the value of a point (within limits).
- e.g. sometimes they won't let you go smaller than say £0.50p a point
On that basis if the FTSE lost 10 points you'd lose £500 ?
- Yes.
Do you have to pay dealing costs and stamp duty spread betting ?
- No, there is no stamp duty (it's a bet you don't actually OWN the underlying) and the dealing charge is built into the spread.
- You can spread bet on shares too. And lots of other things. (Commodities, options, politics, house prices etc...)
You're sitting there watching the screen and make your decision to buy/ sell ?
- Yes.
- Although if you have set up with a stop and/or limit, you could just let it run.
If so,in the seconds it takes to deal,the position could change,how do you avoid that delay.
- There is no delay. Your order changes in front of your eyes as you set it up. When you place it, that's the price - or better.
When I bought the shares on HG the price I was offered was a tad more than the live price I'd been looking at on my screen.
- Sometimes the live price is the mid-point of the bid-offer (aka the spread) - there is always a spread.
- Or you were front run by HFT!
Was that me or is that how it always is ?
- Will always happen.
Is there a charge for having a predetermined stop point ?
- On IG there is no charge unless you want a GUARANTEED stop.
- Stops can be missed if there simply isn't the liquidity to close it.
- For example, if there is very bad news overnight, the ONLY available offer to buy (say) might be down -10%. If you had a stop down -5%, then since it isn't physically possible to close just down -5%, you get hit for the full -10%.
- Unless you go for a guarantee in which case, IG eat the extra loss and you get just -5%.
- They do charge for this with a wider spread.
Is there a charge for the stop/loss facility ?
- No, other than the guarantee above which isn't mandatory.
How do you limit exposure to losses whilst spread betting and is there a charge ?
- Use stops, as above.
Re. Points how do you equate that with cash value ? Do you put in the cash/point ratio before you deal ,that is say £50 a point.
- You set the value of a point (within limits).
- e.g. sometimes they won't let you go smaller than say £0.50p a point
On that basis if the FTSE lost 10 points you'd lose £500 ?
- Yes.
Do you have to pay dealing costs and stamp duty spread betting ?
- No, there is no stamp duty (it's a bet you don't actually OWN the underlying) and the dealing charge is built into the spread.
Thanks Walm....
So that leads me to conclude that if you just fancy a punt,spread betting is the more efficient way to go.
Efficient in that you pay no stamp duty or dealing costs.
So IG are like bookies making their money from the bets that lose ?
I read that spread betting is very dangerous and that you can lose your pants.
Surely if you use stop losses this goes a long way to limiting a loss.
Unless you get carried away and apply to much leverage,what's the problem ?
Say I bet £20 a point on the FTSE with a stop loss of minus 10 points...the most I might lose is £200 ?
Don't understand....... £20 x 10( points ) = £200
No hang on ...from your example it'll be £2000 ?
So if the FTSE rises 10 points do I win £2000 ?
So that leads me to conclude that if you just fancy a punt,spread betting is the more efficient way to go.
Efficient in that you pay no stamp duty or dealing costs.
So IG are like bookies making their money from the bets that lose ?
I read that spread betting is very dangerous and that you can lose your pants.
Surely if you use stop losses this goes a long way to limiting a loss.
Unless you get carried away and apply to much leverage,what's the problem ?
Say I bet £20 a point on the FTSE with a stop loss of minus 10 points...the most I might lose is £200 ?
Don't understand....... £20 x 10( points ) = £200
No hang on ...from your example it'll be £2000 ?
So if the FTSE rises 10 points do I win £2000 ?
Edited by avinalarf on Thursday 11th August 14:45
avinalarf said:
jonamv8 said:
I've just gone long (BUY) on Bund. 11/08/16 13:30:18
Open 167.78
Stop Limit 167.57 to protect me against losses, potential loss of 21 points
Auto close trade at 168.48, a potential gain of 70 points although in reality I'd probably manually exit before but I could get called out of the office
Wish me luck
Good luck.....so that's 50/50 if you win....sharesy,sharesy. Open 167.78
Stop Limit 167.57 to protect me against losses, potential loss of 21 points
Auto close trade at 168.48, a potential gain of 70 points although in reality I'd probably manually exit before but I could get called out of the office
Wish me luck
Edited by avinalarf on Thursday 11th August 14:30
avinalarf said:
Thanks Walm....
So that leads me to conclude that if you just fancy a punt,spread betting is the more efficient way to go.
Efficient in that you pay no stamp duty or dealing costs.
So IG are like bookies making their money from the bets that lose ?
I read that spread betting is very dangerous and that you can lose your pants.
Surely if you use stop losses this goes a long way to limiting a loss.
Unless you get carried away and apply to much leverage,what's the problem ?
Say I bet £20 a point on the FTSE with a stop loss of minus 10 points...the most I might lose is £200 ?
Depends but I prefer it. Long term shares in an ISA is as tax efficient but that's a whole other discussion.So that leads me to conclude that if you just fancy a punt,spread betting is the more efficient way to go.
Efficient in that you pay no stamp duty or dealing costs.
So IG are like bookies making their money from the bets that lose ?
I read that spread betting is very dangerous and that you can lose your pants.
Surely if you use stop losses this goes a long way to limiting a loss.
Unless you get carried away and apply to much leverage,what's the problem ?
Say I bet £20 a point on the FTSE with a stop loss of minus 10 points...the most I might lose is £200 ?
No stamp no dealing costs as walm says.
IG are yes but sometimes they just place your trade themselves so they are happy if you win, they make their cut from the spread. Someimes they will risk it and take your bet themselves depending how much exposure they have.
Spread big with no stops and yes you can lose your house, IG would pursue you and your assets.
£20 a point on FTSE requires a large ish account balance for a newbie - circa £700
Edited by jonamv8 on Thursday 11th August 14:54
jonamv8 said:
Depends but I prefer it. Long term shares in an ISA is as tax efficient but that's a whole other discussion.
No stamp no dealing costs as walm says.
IG are yes but sometimes they just place your trade themselves so they are happy if you win, they make their cut from the spread. Someimes they will risk it and take your bet themselves depending how much exposure they have.
Spread big with no stops and yes you can lose your house, IG would pursue you and your assets.
£20 a point on FTSE requires a large account balance
Why a big account balance ?No stamp no dealing costs as walm says.
IG are yes but sometimes they just place your trade themselves so they are happy if you win, they make their cut from the spread. Someimes they will risk it and take your bet themselves depending how much exposure they have.
Spread big with no stops and yes you can lose your house, IG would pursue you and your assets.
£20 a point on FTSE requires a large account balance
Surely if you bet £20 a point, and you put a stop loss if the FTSE drops 5 point you lose £20 x 5 = £100
Or are you saying I'm actually betting on a movement of 0.01 x my position.
So that's £10,000 loss ?
avinalarf said:
jonamv8 said:
Depends but I prefer it. Long term shares in an ISA is as tax efficient but that's a whole other discussion.
No stamp no dealing costs as walm says.
IG are yes but sometimes they just place your trade themselves so they are happy if you win, they make their cut from the spread. Someimes they will risk it and take your bet themselves depending how much exposure they have.
Spread big with no stops and yes you can lose your house, IG would pursue you and your assets.
£20 a point on FTSE requires a large account balance
Why a big account balance ?No stamp no dealing costs as walm says.
IG are yes but sometimes they just place your trade themselves so they are happy if you win, they make their cut from the spread. Someimes they will risk it and take your bet themselves depending how much exposure they have.
Spread big with no stops and yes you can lose your house, IG would pursue you and your assets.
£20 a point on FTSE requires a large account balance
Surely if you bet £20 a point, and you put a stop loss if the FTSE drops 5 point you lose £20 x 5 = £100
Or are you saying I'm actually betting on a movement of 0.01 x my position.
So that's £10,000 loss ?
No you are betting per point, not 0.01
Take a read of http://www.cityindex.co.uk/margin-and-leverage.asp...
avinalarf said:
Thanks Walm....
So that leads me to conclude that if you just fancy a punt,spread betting is the more efficient way to go.
Just my opinion, leverage for a new trader is far too dangerous. Learn to trade and manage risk before going anywhere near leverage or even shorting stocks. So that leads me to conclude that if you just fancy a punt,spread betting is the more efficient way to go.
Edited by avinalarf on Thursday 11th August 14:45
avinalarf said:
Why a big account balance ?
Surely if you bet £20 a point, and you put a stop loss if the FTSE drops 5 point you lose £20 x 5 = £100
Or are you saying I'm actually betting on a movement of 0.01 x my position.
So that's £10,000 loss ?
I am a conservative guy so I have opened an account that only lets me bet money I have in the account - such that I can NEVER have a negative balance with IG.Surely if you bet £20 a point, and you put a stop loss if the FTSE drops 5 point you lose £20 x 5 = £100
Or are you saying I'm actually betting on a movement of 0.01 x my position.
So that's £10,000 loss ?
The characteristics are that the account forces every bet to have a stop and forces me to have a guaranteed stop.
I can't choose to put a trade on any other way.
However, let's say I put £1,000 in there.
I could then put on a FTSE bet at £10 a point with a 100 point stop.
At that point I am long the FTSE to the tune of nearly £69,000.
i.e. if it goes up 1%, I will make 1% x £69k = £690.
(And vice versa.)
Now you CAN choose to have a more risky account where you aren't forced to take stops or guarantees.
Then you can put on £10 a point using just £10.
But your account will be zero as soon as you put the bet on (because they charge a 1pt spread) - and then if the FTSE drops you will have a negative balance with them, which they will chase you for.
For new customers I think they don't allow that. They make you either have a big buffer in the account OR take a no-negative-balance account like mine.
It probably is a little cheaper than buying a FTSE tracker through an ISA.
twinturboz said:
avinalarf said:
Thanks Walm....
So that leads me to conclude that if you just fancy a punt,spread betting is the more efficient way to go.
Just my opinion, leverage for a new trader is far too dangerous. Learn to trade and manage risk before going anywhere near leverage or even shorting stocks. So that leads me to conclude that if you just fancy a punt,spread betting is the more efficient way to go.
Edited by avinalarf on Thursday 11th August 14:45
jonamv8 said:
...
Margin and Leverage - You cannot open a £20 per point trade with 5 point stop loss for £100 as slippage may occur as detailed in walms explanation above. The stop is not guaranteed unless you pay for a guarantee.
No you are betting per point, not 0.01
Take a read of http://www.cityindex.co.uk/margin-and-leverage.asp...
Sorry not quite following this.......Margin and Leverage - You cannot open a £20 per point trade with 5 point stop loss for £100 as slippage may occur as detailed in walms explanation above. The stop is not guaranteed unless you pay for a guarantee.
No you are betting per point, not 0.01
Take a read of http://www.cityindex.co.uk/margin-and-leverage.asp...
On this example they gave........
For example: If you want to spread bet £10 per point on Vodafone, with a current share price of £2.40, the total value of your position will will be £10 x 240 = £2400. With a margin factor of 4% your margin requirement would be £2400 *4% = £96.
So the £96 is a charge you pay them ?
Not sure I understand what the term ..."margin" means.
So on the example above is the most you can lose £2400 plus any slippage.
And the gain £10 a point so if FTSE rises 10 points you win £10 x 10 =£100
I think I'm missing something here.
EDITED TO SAY....just seen Walm"s post,.
Edited by avinalarf on Thursday 11th August 15:40
avinalarf said:
jonamv8 said:
...
Margin and Leverage - You cannot open a £20 per point trade with 5 point stop loss for £100 as slippage may occur as detailed in walms explanation above. The stop is not guaranteed unless you pay for a guarantee.
No you are betting per point, not 0.01
Take a read of http://www.cityindex.co.uk/margin-and-leverage.asp...
Sorry not quite following this.......Margin and Leverage - You cannot open a £20 per point trade with 5 point stop loss for £100 as slippage may occur as detailed in walms explanation above. The stop is not guaranteed unless you pay for a guarantee.
No you are betting per point, not 0.01
Take a read of http://www.cityindex.co.uk/margin-and-leverage.asp...
On this example they gave........
For example: If you want to spread bet £10 per point on Vodafone, with a current share price of £2.40, the total value of your position will will be £10 x 240 = £2400. With a margin factor of 4% your margin requirement would be £2400 *4% = £96.
So the £96 is a charge you pay them ?
Not sure I understand what the term ..."margin" means.
So on the example above is the most you can lose £2400 plus any slippage.
And the gain £10 a point so if FTSE rises 10 points you win £10 x 10 =£100
I think I'm missing something here.
EDITED TO SAY....just seen Walm"s post,.
Edited by avinalarf on Thursday 11th August 15:40
In the example you gave you'd need the £10 in your account plus the £96 margin, £106. The minute voda went down you'd be negative and they would be all over you. So really you'd need £10 + £96 + £100 or so to cover any movements in the wrong direction while you kept your position open.
Edited by jonamv8 on Thursday 11th August 15:57
Edited by jonamv8 on Thursday 11th August 15:58
PM not as good as AM for me, shorting and missing. 14 points loss on my earlier 30 ish gains.
Walk away or look for another in the next hour is the question.
Just offering this as a balance to anyone who thinks winning is easy. If I' missed the morning session I would be down overall today...
Walk away or look for another in the next hour is the question.
Just offering this as a balance to anyone who thinks winning is easy. If I' missed the morning session I would be down overall today...
avinalarf said:
So the £96 is a charge you pay them ?
Not sure I understand what the term ..."margin" means.
The margin is really the buffer they want to be comfortable that they are unlikely to be out of pocket even if your trade goes wrong.Not sure I understand what the term ..."margin" means.
In VOD's case it isn't very volatile.
It is very rare to have a 4% swing in a day for example.
A more volatile stock (such as something on AIM) would command a higher margin most likely but each spread betting company sets their own margins.
You don't pay them £96. Unless of course VOD DOES drop 4%, in which case, that's how much you lost in the bet.
You just pay them the spread.
In VOD's case again, the spread on IG is about 0.5pt. So you would be paying them £5 for a £10 per point bet.
As an aside - people often get undone by so called "margin calls".
As your trade goes against you, you need to maintain the buffer (the company always wants a 4% distance between the current spot price and when your account hits zero).
So you keep having to pump in money to keep the trade open.
As above the £106 is effectively gone as soon as the trade is on, BUT you get £96 back/available as soon as you close the trade.
If you can't maintain the buffer they can close the trade.
So if a stock spikes down even for an instant, they might close the trade since in that instant you failed to meet the margin call.
Gassing Station | Finance | Top of Page | What's New | My Stuff