Interesting article on spread betting

[meanreversion]

Any idea who charges what?

 

[Black Swan]

Cheers guys, I will ask.... Any other questions just keep 'em coming.

 

[Jack Hughes]

Remember to ask them how/why they treat clients differently, contrary to the MiFID directive.

 

[Paul71]

TBH I thought the market place, in terms of active traders, was bigger than this article suggests. But we're a right clever bunch of over-educated nerds...

New research gives a snapshot of the UK’s investment industry, and shows that punters are a demanding bunch

SPREAD BETTING has been in the UK for more than a decade now and it has been growing rapidly in popularity among the private investor community. But just who is your typical spread better, why do they use spread betting and what exactly do they think of all the providers battling it out for market share? The answers to all these questions can be found in a new report from Australian research firm Investment Trends, which conducted the first ever survey of British financial spread betters and contracts for difference (CFDs) traders on behalf of the spread betting industry in the UK.

So just how big is the financial spread betting industry? Only 83,000 spread betters have placed at least one trade in the past 12 months, which is fewer than you might have thought. And of these 83,000 spread betters, only a tenth also trade CFDs. (The number of traders who only use CFDs is estimated to be 10,000.)

Tim Howkins, chief executive of IG Group, says: “This survey shows that although the industry may have a strong and growing client base, there’s still plenty of potential to introduce many more retail customers to this innovative form of trading.”

And who are these spread betters? Well, unsurprisingly they are likely to be male. Just 7 per cent of active spread betters are women – an issue the industry is well aware it has to address if it wants to grow its client base. And most spread betters do so part time: only 4 per cent of spread betters consider themselves to be a professional trader. Indeed, there are as many retired people or students spread betting as there are professional traders. The majority either work in finance (15 per cent) or in computing (14 per cent).

And on the whole, financial spread betters tend to be highly educated individuals with 35 per cent having an undergraduate degree and 16 per cent a masters. More than 10 per cent of CFD traders have an MBA qualification and they are also more likely to have a graduate qualification than spread betters.

So why are these traders using spread betting and CFDs rather than using a stock broker or an independent financial adviser? Well, according to the research, the three main reasons cited by active spread betters are access to markets that would otherwise be unavailable, the ability to go short, and exploiting leverage to accelerate investment returns. Only 22 per cent of financial spread betters say that they use the product in order to hedge their existing investments, confirming spread betting as a predominantly speculative tool. Spread betting’s tax free status in the UK was also a consideration for 49 per cent of spread betters

http://www.cityam.com/markets-and-investments/i5yjswhkfk.html

Interesting post.

The figures don't surprise me at all and the player types stereotypically fit the bill quite well. I think most SBers look to the markets as just another form of online gaming, i've said before that trading is just like some kind of archaic Atari game. My wife calls me a geek for being so interested in something so apparently mundane...it's all in the mind.

 

[meanreversion]

If anyone has done research into the overnight roll charges at different spreadbetting platforms, I'd be interested to know. Otherwise I will start digging myself. All this "EUR/USD spreads from 0.8 pip" is total baloney if they're ripping you for 0.8 pip every night on open positions..!

 

[montmorencyt2w]

Bingo, I'm due to meet with a few of the major SB firms over the next fortnight can we use this thread as a 'forum' to line up any questions we may have for them? Not just on the tax issue but on any other issues/subjects? Perhaps in an attempt to slay or substantiate a few urban myths? TIA

What are you doing; negotiating special terms with them or something?

 

[HawkTrader]

What are you doing; negotiating special terms with them or something?

Insider tradin' that is.

 

[montmorencyt2w]

If anyone has done research into the overnight roll charges at different spreadbetting platforms, I'd be interested to know. Otherwise I will start digging myself. All this "EUR/USD spreads from 0.8 pip" is total baloney if they're ripping you for 0.8 pip every night on open positions..!

I wouldn't call it research, but I've been pleasantly surprised at the relatively low charges at Tradefair and relatively high credits when it works out in your favour. In this respect, they are the best that I've tried so far. I think overnight EUR/USD is about 0.1 pip.

 

[Black Swan]

What are you doing; negotiating special terms with them or something?

I'm trying to get them to buy my Supa nitro-power-fap-signal-divergence-turbo-crossover system....it also uses price action (just in case) They buy it and bury it, otherwise I launch it to the public... Muhahahahaha...

The meetings are to do with my general business activities Mike...