HSBC Sharedealing Account - What Can I Lose?

[Progressive]

Hi there,

I am a complete trading novice. I recently set up a HSBC Sharedealing account an now wish to purchase shares in a company (FTSE listed). I have done some research but cannot find an answer for the following. Again, excuse my very basic knowledge, although admittedly I am being somewhat cautious.

I have (say) £1,000 in my HSBC current account and invest (say) £100 in the company I would like to invest in. What is my total risk in my investment?

Is it £100 or am I exposing my myself (read my current account)? Should the share price fall to £0.00 or the company go bust, do I just lose my stake of £100 or am I liable for more.

Thanks for your assistance!

[soprano]

Progressive said:

Hi there,

I am a complete trading novice. I recently set up a HSBC Sharedealing account an now wish to purchase shares in a company (FTSE listed). I have done some research but cannot find an answer for the following. Again, excuse my very basic knowledge, although admittedly I am being somewhat cautious.

I have (say) £1,000 in my HSBC current account and invest (say) £100 in the company I would like to invest in. What is my total risk in my investment?

Is it £100 or am I exposing my myself (read my current account)? Should the share price fall to £0.00 or the company go bust, do I just lose my stake of £100 or am I liable for more.

Thanks for your assistance!

You can't lose more than you invest

You also need to consider the share trade fee and stamp duty

[Lawrence5]

I think HSBC is a normal share platform. You get fees even if your in cash on the share account and there are fees fo selling too. If you work out its £10 to buy and £10 to sell and 0.5% stamp duty there's a fair bit to cover.....

Read the naked trader by Robbie Burns.... Suggests with costs you should be thinking about £2k in shares as a minimum.

You can look at spread betting (plenty on here about it) where you don't have to buy the share just bet on gains and losses. But I you are risk adverse then it's not for you.....

[raptor600]

Buying £100 of one stock is absolute suicide.

You will pay £10 to buy and £10 to sell - and 0.5% stamp duty.

You are down 20.5% straight away!

The absolute minimum I would say you should invest in one stock is £1000.

[Lawrence5]

HSBC regular saver may be a better bet - save up to £250 a month paying 6% interest or 8% on premier. Then buy a block in a couple of years....

Oh and do look at the fees - I went elsewhere even though I bank with HSBC

[hornet]

Assuming you haven't already, why not open a Shares ISA? Index trackers and ETFs are generally cheap, and most will allow you to drip feed a regular investment. Far better bet than putting all your eggs in one basket IMO.

[Progressive]

raptor600 said:

Buying £100 of one stock is absolute suicide.

You will pay £10 to buy and £10 to sell - and 0.5% stamp duty.

You are down 20.5% straight away!

The absolute minimum I would say you should invest in one stock is £1000.

Hi there,

Completely aware of this. The numbers were straight forward examples for the sake of ease and confidentiality on a public forum.

Point noted though, as it's important.

Cheers

[Progressive]

raptor600 said:

Buying £100 of one stock is absolute suicide.

You will pay £10 to buy and £10 to sell - and 0.5% stamp duty.

You are down 20.5% straight away!

The absolute minimum I would say you should invest in one stock is £1000.

Hi there,

Completely aware of this. The numbers were straight forward examples for the sake of ease and confidentiality on a public forum.

Point noted though, as it's important.

Cheers

[fid]

You could lose the will to live if you broke your little key log-in thingy the day you need to sell some shares sharpish! Bloody stupid that HSBC make us use these for InvestDirect.

[Progressive]

fid said:

You could lose the will to live if you broke your little key log-in thingy the day you need to sell some shares sharpish! Bloody stupid that HSBC make us use these for InvestDirect.

Oh yes. Never even gave that a thought. Another poor example of those annoying little things.

What's the benefit of the 'bank' sharedealing accounts over a third party one? All I can think of it convenience...

[Lawrence5]

Progressive said:

Oh yes. Never even gave that a thought. Another poor example of those annoying little things.

What's the benefit of the 'bank' sharedealing accounts over a third party one? All I can think of it convenience...

Charges are the main 3rd party benefit
https://investments.hsbc.co.uk/pdf/41018-Invest-Di...


<<Rates and fees – other charges
HSBC UK Funds of Funds – Initial Charge 1% taken from your original investment.
}Annual Management charge 1.25%
}Other expenses approximately 0.8% per year>>

I use shareprice iPhone and android app £9 flat trading fee and bugger all other charges.... Just make sure you pick something regulated if using the Internet.

[charlie926J]

You might like to look at the Motley Fool website - fool.co.uk Plenty of common sense articles on there about starting in buying shares and building up portfolios. A lot of them relate to buying/investing for dividend yield which is a longer term type of investment. Also an active message board section.

No idea about the HSBC account, I use Stocktrade.

[AndySpecD]

Taking things slightly o/t, anyone able to recommend a company that I can use to buy and sell shares online that is decent, has limit buys/sells and is cheaper than HSBC.

I took the attitude that £12.95 on purchase and sale wouldn't cut into my profits too much, then adding it all up, it's been nearly £800 in the last 12 months!!

[Dakkon]

I use Iweb and they have just dropped their fees to £5 a trade buy / sell.

[twinturboz]

AndySpecD said:

Taking things slightly o/t, anyone able to recommend a company that I can use to buy and sell shares online that is decent, has limit buys/sells and is cheaper than HSBC.

I took the attitude that £12.95 on purchase and sale wouldn't cut into my profits too much, then adding it all up, it's been nearly £800 in the last 12 months!!

How often are you trading?

[Newc]

twinturboz said:

AndySpecD said:

Taking things slightly o/t, anyone able to recommend a company that I can use to buy and sell shares online that is decent, has limit buys/sells and is cheaper than HSBC.

I took the attitude that £12.95 on purchase and sale wouldn't cut into my profits too much, then adding it all up, it's been nearly £800 in the last 12 months!!

How often are you trading?

I'm going to take a stab in the dark here and guess an average of 5 times a month ?

OP - Interactive Brokers are £6 / trade and have an extensive set of security types available.

[twinturboz]

Newc said:

twinturboz said:

AndySpecD said:

Taking things slightly o/t, anyone able to recommend a company that I can use to buy and sell shares online that is decent, has limit buys/sells and is cheaper than HSBC.

I took the attitude that £12.95 on purchase and sale wouldn't cut into my profits too much, then adding it all up, it's been nearly £800 in the last 12 months!!

How often are you trading?

I'm going to take a stab in the dark here and guess an average of 5 times a month ?

OP - Interactive Brokers are £6 / trade and have an extensive set of security types available.

Tdwaterhouse is £8.95 if your trading 15 times + a quarter.

Was going to suggest IB as I use them myself but they also have a market data charge to take into account Think £5 a month for lse data, not a lot if your regularly trading and more than worth it considering the platform is light years ahead of the rest.

If I remember right Tdwaterhouse used to take 10 mins plus just to change or cancel a limit order.

[Birkin1932]

Based on the OP's comments, I would say DO NOT TRADE

Get some books etc and maybe trade then.

I'm afraid you will get burnt.

I would never trade shares in the normal sense, I would set up a spread betting account, you then have no tax issues,.

BUT AGAIN I STRESS YOU REALLY NEED TO KNOW WHAT YOU ARE DOING, MARKET MAKERS ARE EXPERTS AT RELIEVING AMATEURS OF THEIR HARD EARNED CASH.

Edited by Birkin1932 on Wednesday 17th October 22:01