Yes a good and balanced article on how the industry operate.
IG Index
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Lee Shepherd
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Maybe not but it gives an idea into the industry and how it works. How one then actually wishes to perceive it is up to them. The ultimate discussion should be who makes money and if they don't is it really the SB fault or their trading. In most circumstances we an all honestly say its the individual. After all, we need others to fail so we can profit. Less than zero sum game.
Yes I noticed that, 2% of IGs clients make 50% of their revenue, interesting. In IGs case these 2% much be very large investors. Surely these clients make use of their service mostly for hedging for exposure in other markets.
I wonder if this figure is the same for others like Capitalspreads (London Capital Group Ltd.)?
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Yes I agree, usually it is the individual fault if he/she do not succeed in trading. But that goes for the DMA trading as well. Only a few percentage of traders are successful whether you trade SB or DMA, but for some reasons the SB trader complains more, probably due to most of them being less experienced. But you are more vulnerable trading SB compared to DMA, as there are more risk parameters that have to be counted for trading SB.
BeginnerJoe
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You mean like they tell you the whole truth ? Imagine they made their 50% from 99% of their clients, would they be stupid enough to tell their punter joes they are all going to loose ?
It is a public company, so I guess there is no need to cover up, especially not IG as they are doing pretty well.
BeginnerJoe
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Then how do you explain all those public companies that went bankrupt ? They didn't cover up nothing and just bad luck ?
Nothing that shows IG is involved in a cover up. They are by far margin the biggest company in the industry and have been so for many years. Yes a few will fail, but that is nothing new under the sun.
BeginnerJoe
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You have no proof they are not covering up.
Yes that is right, but on the other hand I don't think they need to considering the client base they have and the profit they make each year.
Lee Shepherd
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If anyone's covering up anything its the big mothers who actually control the markets whether SB or DMA. Bottom line is.....Do we make money. If we do then everything is good, if we don't, give up SB, try DMA, if still no...Give up entirely.
Yes, ha ha. I honestly don't think you will make it DMA if you fail SB. You will probably lose even more. You have to be dead honest to yourself and ask, is it the SB fault that I'm losing money or is it a lack of self discipline and money management?
In almost 100% of the cases the answer will be the later.
Not entirely satisfied, altogether I am in the green, but I know I can do much better and that is why I still play this game.
R.Charnock
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The thing I don't like about SB providers is the way that they still take any opportunity to grab extra pennies from punters by having T&Cs allowing them to move the goalposts, even though they would still make huge profits just by relying on the clients to lose money because the odds are against them.
If a spread bet company ran the Lottery they'd probably have a T&C clause so they could change the numbers if someone won the jackpot.
If a spread bet company ran the Lottery they'd probably have a T&C clause so they could change the numbers if someone won the jackpot.
These are things that have to be included in the risk profile when trading SB. Although, these T&C clauses contradict the MiFID financial directives in many cases, something that might be worth looking at if you're filing for a complain. Generally speaking I would not trade SB with larger stake, despite of it being tax free. As said before, you have a few more risk parameters to be included trading with them, being a market maker and thus in control of your money.
donaldduke
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The issue was Binaries. These are unhedged for IG and dont work like other instruments. Most of 'adz2k11''s profits came from binaries. I believe the outright Index trades were done to disguise the fact that this was a 'hit' on IG binaries.
Binaries would be a losing proposition for IG, but they apply their own position sizing on punters. Winning punters are restricted by bet size. Losers can bet as big as they like. This allows IG to make millions in profits from them.
If every net winning binary punter was allowed to bet at £400 a point like this 'adz2k11' chap was doing, then IG wouldn't make any money from binaries.
In a good month i can make 10K betting £10 pound a point on binaries.
If IG were to let me bet £400 a point, that would be £400K, but they dont let me bet anything like that, its £10pp if i want to get in and out with zero delay on entry and exit orders (and zero delay/zero rejections are vital in order to cut losses).
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tar
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Most of his profits are from Index outright positions not binaries ...
donaldduke
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R.Charnock
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TBH, I've never understood the point of binaries from the punter's side of the fence. Isn't it effectively the same thing as an underlying index but with a larger spread?
A Dashing Blade
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So no chance of front-running if he worked for a rival then!
