BBC 2 - July 9 - The Money Programme

[Merlins]

BBC 2 - Tonight 9:50 - The money programme

Good afternoon ,

"Gambling on the war : Investigation into who made money and who lost out in the risky world of financial spread betting during the first three weeks of the iraq war"

Should be an interesting watch.

 

[cassiopeia]

Thought the name Paul Scott was familiar.

http://boards.fool.co.uk/Message.asp?mid=7991196&sort=whole

I think the programme was a bit misleading suggesting that spread betting companies make all their money attempting to out-think the punter. This may be more true of IG than the others but a lot of SB co. profits must come from the spread, so they can win either way in a fully hedged position. If their employees can usually guess which way the market will go why don't they take it up privately?

 

[Merlins]

Hi cassiopeia ,

Yes, i thought it was a bit odd how they keeped going on about the profit and how "well" IG was doing. In my view spread betting firms get a very bad reputation for no reason ( bias is a pain though ) - i think they offer a great service. Of course they are in the game to make money - why the hell would they do it otherwise ?

At the end of the day if you as a client places a spread bet on an indice or whatever, and you predict it right you win, if you dont, you lose. Simple.

Well, i think ALOT of them do it on the side, they might as-well.

The moral issue was a bit of a joke imho, like it was THERE fault a war happened, strange that.

What markets do you trade ?

 

[Helenqu]

I found the whole programme dissapointing and shallow. And Paul wasn't his usual self at all (mind you I've usually met him when he's had a few drinks )

I think they made it sound as if all the "punters" did was take wild stabs at the market, there was no look at people who use a more structured approach than Paul. I loved the bit where he wrote his deal down on a scrap of paper

 

[Merlins]

Hi Helen ,

Yes, the bit when he phoned hes trade in seemed a bit "staged" to me, more of a demonstration than a "real" trade. When he reached for the paper as you said, it was quite odd, hehe.

 

[FTSE Beater]

Hi all.

I have to say I was disappointed too
I thought it was going to be 2 top traders battling it out, instead it was a spreadbetting company and someone who rarely trades the markets (sorry Paul but I'm sure that's not your main money stream).

It was good seeing Paul though, but Helen's right - not his usually self. Would have been an excellent watch if he was

Just my thoughts

 

[cassiopeia]

Merlins

I trade mainly individual stocks/CFDs at the moment. I used to bet on the SB indices but D4Fs pricing has definitely become more biased for certain instruments since Sep 11th. In fact they admitted this to me but in different terminology. My long term strategy is one of waiting for opportunities, even if it takes some time.


Helen

Yes, they definitely made the whole thing look very amateurish from the traders side at least, no mention of the futures or underlying stocks being the main driver of prices. No money management or systems of any kind. Just look at the news, gut feeling, I think that...... oh I will close that now. You might as well back a horse, but showing a structured scientific approach might turn viewers off. A confrontational approach of 'them and us' using judgment and conflicting views makes compelling viewing (to the masses) I suppose.

 

[Halo]

I must say I found the IG Traders came across as quite sub-standard. Anyone that's ever worked in a real dealing room will have picked up that a weekly P&L analysis of "we lost a bit on indices, but made a bit more on house prices, that's the way it goes sometimes" does not really cut it. The IG guys are evidently just call centre staff. Sorry to offend but it amazed me that the people that seemed to 'run' the desk were so amateur.

 

[reddragon]

MONEY Programme - Wed night 9.50pm

Hi all,
Well, did anybody see this prog. last night?. It showed
how IG Index dealt with the Iraq war from a SB point of view.
I was chuffed to see how often the Oxbridge educated dealers
were looking blank faced trying to suss out where the index
would go in response to the latest piece of breaking news
about the war. It bought a smile to my face that the Director
in charge of financial spreads admit that they got it wrong
at least twice, and that during the military action the clients
got it right more often than IG did !!!
It just goes to show that at times nobody is really "in the know"
in this game !!
Cheers.

 

[The Beyonder]

Yes, I saw it. Their not all Masters of the Universe, as they might think.i Was a bit disappointed though, could have been more enlightening.
However, I was surprised they were making big losses anyway. I thought they hedged client positions on the mkt to protect themselves.

 

[stoploss please]

IG tried to give an opinion that they are big swingging dicks in the market and their goal was to profit from trading. If so, how can they justify eight point spreads on the Dow. IG should be able to employ a few monkeys and pay them to manage eight point spreads. How hard can it be to turn a profit when you have all the cards stacked in your favor.

 

[spreadbet]

the program was disappointing, it failed to show how spreadbet companies hedge their bets in the futures markets.

cheers

spreadbet

 

[Skimbleshanks]

Perhaps that is because they don't hedge?

 

[spreadbet]

Hi Skimbleshanks

When I traded with D4F I seem to remember reading someplace in their bumf that they did indeed hedge on the futures. Seems to me the logical thing to do. Any bookie will lay bets off at some point.

Cheers

spreadbet

 

[Skimbleshanks]

I agree - it does sound logical. But ... with 95% losing, then perhaps it makes more business sense not to hedge. One of the SB companies (I believe it was IG, but I could easily be wrong) stated in their annual report and accounts that they had suffered financially by not hedging.

I do know of one trader who took a certain SB company to the cleaners, and they had to write a cheque for the largest amount they had ever written for a month's trading. They weren't happy bunnies, and got very badly burnt. So much so that they changed their systems to prevent something like that happening again.

 

[FTSE Beater]

I do know of one trader who took a certain SB company to the cleaners, and they had to write a cheque for the largest amount they had ever written for a month's trading.

SKIM - You been upto your old tricks again


I think we have to remember that the program wasn't designed with traders in mind - I presumed that the idea was to kick up the whole "is shorting morally correct" - but ethics only got mentioned at the end

Oh dear I used the ethics word

 

[Skimbleshanks]

LOL - no it wasn't me, although I did do rather well that month too, up over 1,000%, my best ever. That was the month that we had 400 point swings on the Dow - it was just incredibly easy to make money.

It was a huge lesson for me - I got a bit cocky and promptly lost half of my gains the following month (not helped incidentally by the SB company changing its spread, bias, etc). It was very humbling because it made me realise that no matter how good I was, the SB company was better! I had to forgo my very profitable strategy as it just didn't work as well, and it was back to the drawing board.

 

[Trader333]

This is interesting as we have seen many disagreements on these boards about whether there is SB bias or not. For the SB companies that do not hedge it must be in their interest for the punter to lose and so biasing of spreads must be too tempting not to happen.

In an annual report one SB company's excuse for not making greater profits was that punters had been more lucky than was expected and that this luck was not expected to continue. A policy of greater biasing perhaps ?


Also Skim has made a good point in that it is very easy to get over confident when you have had a good couple of trades. I am as guilty as anyone else of this as when this happens it is easy to let the discipline slack thinking that you are some great invincible trader to be brought straight back down to Earth with a loss that would have been smaller or avoided if you had stuck to your rules of trading.

Paul

 

[spreadbet]

I do know of one trader who took a certain SB company to the cleaners, and they had to write a cheque for the largest amount they had ever written for a month's trading. They weren't happy bunnies, and got very badly burnt. So much so that they changed their systems to prevent something like that happening again.

I wonder if they refused to trade with that particular trader again, good luck to him/her.

Cheers

spreadbet

 

[dsmodi]

quote:
--------------------------------------------------------------------------------
Originally posted by Skimbleshanks
I do know of one trader who took a certain SB company to the cleaners, and they had to write a cheque for the largest amount they had ever written for a month's trading.

What are the details on this - how anyone managed to take an SB co. to the cleaners is well worth knowing about...