Death of SB

[Your User Name]

Seems like the time to take a massive short out on SB providers.

 

[tomorton]

Hasn't that time come and gone when the ESMA regulations were confirmed?

 

[brewski1984]

I don’t think SB will die, obviously you’re forced to do smaller stakes but people will still lose the same amount of money.

 

[Your User Name]

I think SB providers will lose about 80% of their business unless the 'Professional' qualification is made more realistic.

IG says>>

The Group has received around 15,000 applications since November 2017 from clients to elect to be categorised as professional, and 3,800 clients are now categorised as professional. The Group's process for assessing these applications is appropriately rigorous and over three-quarters of the applicants to date have been rejected. Clients categorised as professional contributed over 35% of UK and EU OTC leveraged revenue in the last three months, and the Group continues to expect this proportion to rise to 50% when the ESMA measures come into effect.

 

[brewski1984]

The thing is that professional means exactly that, it’s not right letting mug punters be “professional”. Whilst I don’t like the changes and feel that I’ve been “done over”, I can understand why they are doing them. Mug punters which lets be honest, is probably 90% of spread betters, should not have access to such dangerous amounts of leverage. I have won and lost ridiculous amounts of money (relative to me) which Is far too high risk... I’ve read stories of people losing their houses when the CHF stopped being supported a while ago.

Anyway, I’m a mug punter and I’ve currently got 1k sat in a SB account. Am I going to stop trading when the changes happen? Probably not! I’m still going to lose that 1k, just the same as every other mug punter will still deposit the same amount of spare money trying to live the dream and then lose it all. I can’t see 80% of the SB industry just stopping overnight... gamblers never quit

But then that’s just my opinion and I’m a mug punter

 

[jm1054]

I think SB providers will lose about 80% of their business unless the 'Professional' qualification is made more realistic.

IG says>>

The Group has received around 15,000 applications since November 2017 from clients to elect to be categorised as professional, and 3,800 clients are now categorised as professional. The Group's process for assessing these applications is appropriately rigorous and over three-quarters of the applicants to date have been rejected. Clients categorised as professional contributed over 35% of UK and EU OTC leveraged revenue in the last three months, and the Group continues to expect this proportion to rise to 50% when the ESMA measures come into effect.

I read somewhere (can't remember where) that SB providers would lose less than 25% revenue from retail traders quitting, or going elsewhere. It seems the "professionals" make up most of their revenue.

The criteria for qualifying as "professional" doesn't help in any way imho. If I had £500,000 in assets, I really wouldn't have a problem stumping up the additional margin required so wouldn't even need to apply to be "professional"!

 

[kalott]

The thing is that professional means exactly that, it’s not right letting mug punters be “professional”. Whilst I don’t like the changes and feel that I’ve been “done over”, I can understand why they are doing them. Mug punters which lets be honest, is probably 90% of spread betters, should not have access to such dangerous amounts of leverage. I have won and lost ridiculous amounts of money (relative to me) which Is far too high risk... I’ve read stories of people losing their houses when the CHF stopped being supported a while ago.

Anyway, I’m a mug punter and I’ve currently got 1k sat in a SB account. Am I going to stop trading when the changes happen? Probably not! I’m still going to lose that 1k, just the same as every other mug punter will still deposit the same amount of spare money trying to live the dream and then lose it all. I can’t see 80% of the SB industry just stopping overnight... gamblers never quit

But then that’s just my opinion and I’m a mug punter

"The thing is that professional means exactly that, it’s not right letting mug punters be “professional”."

yes but if a pizza delivery guy (or someone else) who knows nothing about trading and investing and think dow jones is somekind of exotic pizza

then get a inheritance from a dead aunt of 600 000 and then place 10 big trades and lose 100 000

he still would qualify as a professional

but another guy been trading profitably for maybe 10-20 years and only 400 000 in capital would be retail

 

[brewski1984]

"The thing is that professional means exactly that, it’s not right letting mug punters be “professional”."

yes but if a pizza delivery guy (or someone else) who knows nothing about trading and investing and think dow jones is somekind of exotic pizza

then get a inheritance from a dead aunt of 600 000 and then place 10 big trades and lose 100 000

he still would qualify as a professional

but another guy been trading profitably for maybe 10-20 years and only 400 000 in capital would be retail

Yeah true I guess, it does seem a little bit inconsistent. Maybe it's more just to protect people that don't have a lot of money.

 

[Your User Name]

The thing is that professional means exactly that, it’s not right letting mug punters be “professional”. Whilst I don’t like the changes and feel that I’ve been “done over”, I can understand why they are doing them. Mug punters which lets be honest, is probably 90% of spread betters, should not have access to such dangerous amounts of leverage. I have won and lost ridiculous amounts of money (relative to me) which Is far too high risk... I’ve read stories of people losing their houses when the CHF stopped being supported a while ago.

Anyway, I’m a mug punter and I’ve currently got 1k sat in a SB account. Am I going to stop trading when the changes happen? Probably not! I’m still going to lose that 1k, just the same as every other mug punter will still deposit the same amount of spare money trying to live the dream and then lose it all. I can’t see 80% of the SB industry just stopping overnight... gamblers never quit

But then that’s just my opinion and I’m a mug punter

Won't happen overnight -- just gradually as the smaller accounts dwindle away.

 

[brewski1984]

Won't happen overnight -- just gradually as the smaller accounts dwindle away.

But then won't those accounts be topped up again?

 

[Your User Name]

But then won't those accounts be topped up again?

Easier to keep an account going with a couple of hundred quid, especially in the days when SB actually enticed new clients with free money.

 

[brewski1984]

Yeah but I think you’re missing my point.

It doesn’t matter how long it takes, most people will still lose all their money to the brokers so I don’t see how it will affect their revenue. As I said before, I’ve currently got 1k sat in a CMC account. Now I could lose it in 10 minutes at £10pp or I could lose it in a week at £1pp... either way CMC will still take that 1k from me and add it to their revenue.

Majority of people lose and these margin changes won’t magically turn those losers into winners, they’ll just stay losers for a lot longer.

 

[tomorton]

That's so clear and to the point brew.

I'm waiting with interest to see how I might need to adapt trading to the ESMA leverage rules in 2 weeks. But I should be well enough capitalised it won't affect what I'm doing. However, it will probably keep out the otherwise new traders who would have gone in with just £500 or £1000, too much work for no prospect of great and quick gain.

 

[brewski1984]

However, it will probably keep out the otherwise new traders who would have gone in with just £500 or £1000, too much work for no prospect of great and quick gain.

On one side of the coin these changes will protect those new guys from risks they're not even aware of however I think those new traders will still go in with £500 or £1000 because that's just how people are - they will still think they can make millions from chump change. I've been at this game for years and I still think I can make millions from chump change

 

[Splitlink]

On one side of the coin these changes will protect those new guys from risks they're not even aware of however I think those new traders will still go in with £500 or £1000 because that's just how people are - they will still think they can make millions from chump change. I've been at this game for years and I still think I can make millions from chump change

Seems to me that you and I have much in common. However, I have survived over the years and intend to carry on trading although, obviously, I shall have to trade at lower stake levels. At my age, its a pastime and, as such, have no intention of going professional. That would have happened years ago, if I considered myself proficient enough.

 

[Your User Name]

Yeah but I think you’re missing my point.

It doesn’t matter how long it takes, most people will still lose all their money to the brokers so I don’t see how it will affect their revenue. As I said before, I’ve currently got 1k sat in a CMC account. Now I could lose it in 10 minutes at £10pp or I could lose it in a week at £1pp... either way CMC will still take that 1k from me and add it to their revenue.

Majority of people lose and these margin changes won’t magically turn those losers into winners, they’ll just stay losers for a lot longer.

Yes, I was missing part of your point: '...losers for a lot longer'. Like that phrase!

How much the changes will affect SB providers' profits will depend on how they hedge -- or if they hedge, in some cases.

 

[jm1054]

My favourite quote in relation to ESMA's new rules:
(can you tell I'm still sore?... )

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies.” - C.S. Lewis

 

[jm1054]

Oh and another one...

“Most people do not really want freedom, because freedom involves responsibility, and most people are frightened of responsibility.” - Sigmund Freud

 

[tomorton]

My favourite quote in relation to ESMA's new rules:
(can you tell I'm still sore?... )

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies.” - C.S. Lewis

Thanks for mentioning CS Lewis. Interesting writer, and seems to have been a very kind soul. Died 55 minutes before JFK was shot, so nobody remembers. (Aldous Huxley also died the same day.)

 

[Your User Name]

So are there any alternative reputable SBs that don't spirit your funds away to the Caymans?