Why Spread Bet?

[LoopyLoo]

Hey cheers for that Calvin, I do most of my spreadbettin' on line now too, makes it much easier and you are right no attitude. Havin said that there are times when there is no option but to pick up the phone and also good not to get to reliant on web transactions as sometimes (especially at crucial times such as announcement of figures) the platforms go down!!!!!

Adding to this thread I can't see (apart from maybe specialist dealings) why anyone would want to use any other form method of investing rather than spreadbettin. I guess I just tend to see all the advantages and the dis-advantages can be easily overcome. As it becomes more competetive the advantages seem to grow, as for charts Deal4Free's seem ok to me as well as their tight spreads.

 

[frog]

Spreadbetting offers the best indicator available and that is their bias you don't need anything else apart from support and resistance.The SBs show you the way not to go.
Cheers
Tel

Simple comme bonjour

ps I use Fins and they are VG by me.

 

[Calvin]

Frog - can you expand on that? As a relatively inexperienced spreadbetter, it hadn't occurred to me that the SB prices might reveal clues about why way they think the market is heading.

As someone who shorted Dax and Dow yesterday morning, just before they sky-rocketed, I could do with all the help I can get!

 

[blackcab]

Calvin - there are lots of TW threads that debate this point. I read most of them and learned a lot. If you're SBing the cash index you know it's based on the index future +/- a 'special' SB factor, not the underlying cash index? Ie SB's Dow Cash price is not the Dow - it's the Dow future (DJU4) +/- some.

 

[seancass]

Sharky,

The issue of spreadbetting platforms and the companies that support them e.g. finspreads, Cantor, IG etc.etc. is one which is of great interest to a number of us.

Given that T2W stages some very effective surveys, is it possible that you could hold a survey in respect of members' preferences for the various SB companies, based on effectiveness and ease of online trading platform, reliability of trading platform, response from and attitude of customer services, fairness of the spread, ease of transfer of funds to and from the account etc.

I think this would be of interest to some members, particularly if the results of the survey were to be tabulated for ease of analysis by a technical wizard like your good self! It would certainly offer those to whom SB is a new trading vehicle a further dimension to their final choice of SB company. What do you think?

Seancass

 

[frog]

%

Frog - can you expand on that? As a relatively inexperienced spreadbetter, it hadn't occurred to me that the SB prices might reveal clues about why way they think the market is heading.

As someone who shorted Dax and Dow yesterday morning, just before they sky-rocketed, I could do with all the help I can get!

Calvin-Ok,firstly I work nights so it isn't often I'm in front of the screen all day and I think that's a
great advantage.Today I'm watching but only to reaffirm my position(am also on a rest period) and am happy with my decision thus far.This morning I sold Fins Oct Dow at 10078 so far so good but as I,m watching I'll carry on assessing.The last 3 days I bought and apart from Tuesday which ended flat albeit a small gain for me it has been an excellent week so far.
I'm not sure how the SBs set their spread but it appears to be a mix of futures and other factors I think part of these other factors is the general direction of the position taken by their customers and therefore if in their assessment their customers are wrong(apparently 97%
always are)they move their spread to limit the impact should the public be correct and thus limiting their exposure.
All I do is use their spread to assess the possible next move which usual entails going against the Sbs obvious direction though this has to be considered in the context of support and resistance.Unfortunately these are a matter of conjecture,100 people looking at the same chart could come up with as many variations.
Today was a difficult choice because Fins had their spread straddling yesterdays close but I felt
that we had hit temporary resistance and that it wouldn't go too much further.
As I write there appears to be support at just below 10030 and I had reckoned on this being a probable support yesterday an hour before close of trade.I would like this support to collapse heading towards 10000 then 9985 ,but if looks like it's going to hold I'm out of here.As I write Fins are giving me a buy at 10059 so only a meagre 19 points today.I will keep monitoring.Off for an aperitif.
Cheers
Tel


Simple comme bonjour

 

[Calvin]

Calvin - there are lots of TW threads that debate this point. I read most of them and learned a lot. If you're SBing the cash index you know it's based on the index future +/- a 'special' SB factor, not the underlying cash index? Ie SB's Dow Cash price is not the Dow - it's the Dow future (DJU4) +/- some.

Now you have got me worried. I can see I'm going to have to do some research on this!! I'm betting on the September contracts for the Dow and the Dax - which I presume, by definition, are futures (meaning the SB's best guess at what the September proice will be?)?

And the cash indices, I guess, are the actual realtime prices (though given that the indices I trade on are constantly shifting, I assumed there was a close correlation).

Is that right? Anyway, thanks for pointing this out - I'll search round the threads to see what I can find on the subject. Is the "+/- some" the indicator for the SB's view of the market direction?

Calvin

 

[Calvin]

Frog,

Thanks a lot for that detailed reply. I'm going to pay your post the ultimate compliment by printing it off to take away and digest! I'll see if I can track what you did right and what I've done horribly wrong this week.

If you don't mind me takinig liberties, I might get back to you on it at some point.

Thanks again,

calvin.

 

[frog]

Frog,

Thanks a lot for that detailed reply. I'm going to pay your post the ultimate compliment by printing it off to take away and digest! I'll see if I can track what you did right and what I've done horribly wrong this week.

If you don't mind me takinig liberties, I might get back to you on it at some point.

Thanks again,

calvin.

Hi again,thanks for your faith I'm not sure I deserve it.Don't be mislead by my choice of which futures I trade as I do any off them.I'm only influenced by the position of the spread in relation to the previous days close.I tend to stay away from the day prices as they seem so final to me,apart from a slightly smaller spread I believe the advantage of being able to carry a position over makes me feel that little bit safer.By all means if I can give you any assistance I'll try my best but I must add that a lot of what I do,though simple,involves how I perceive and "feel"the market.
Today is difficult as I can see the market and this can make me act irrationally,but the spread is still in my favour though only 20 points and I'll stick with it for the while.Seem to be sticking around the10040 level and I wish it would break down through,my reading of Fins is that it should.
Time for a bottle of wine the boss(my lovely wife)has just come home.
Later
Tel

Simple comme bonjour

 

[sefty]

The best thing about spread betting is you can bet on Indices. In my opinion it is far easier to see if the tide is going up or down rathering than looking at lots of different boats to put your money into.

As old Doc used to say you gotto understand where the market is at before you start stock picking. there is no better way than learning that than to bet on indices.

Good luck happy betting

Sefty

 

[frog]

The best thing about spread betting is you can bet on Indices. In my opinion it is far easier to see if the tide is going up or down rathering than looking at lots of different boats to put your money into.

As old Doc used to say you gotto understand where the market is at before you start stock picking. there is no better way than learning that than to bet on indices.

Good luck happy betting

Sefty

I agree it's simple and that's how I like it.I take a position once a day,stick to one vehicle on which I concentrate all my attention and it works for me-mostly and that's all I ask.I don't have the income or wealth to do otherwise so SBing suits my purpose and if I can increase my meagre salary by 20 or 30% by month that's fine by me.As I write Fins have done me proud with
a buy of 10014 and I think it's time I took some of that.
Well my days nearly done feeling mellow and pleased.
Cheers and I reciprocate your good wishes.
Bonne nuit
Tel

Simple comme bonjour

 

[frog]

Well what do you reckon peeps?
Close at 10040
Some support around 9990
Spread nicely below yesterdays close.
Fins was 10017-10027 for Oct.
Cheers
Tel

Simple comme bonjour

 

[Calvin]

So what is your reading of it today, Frog?

I'm still stuck in open sells on Dow and Dax (Sept). As I type, I'm tantalisingly close to heading back into profitable territory on the Dax (I sold at 3700), but a I'm still 100 points adrift on the Dow.

Looking at the Dow chart, I can't see much hope of a 100 point drop any time soon, so sooner or later I guess I'm going to have to take the loss...

This lark isn't as easy as it looks...

 

[frog]

So what is your reading of it today, Frog?

I'm still stuck in open sells on Dow and Dax (Sept). As I type, I'm tantalisingly close to heading back into profitable territory on the Dax (I sold at 3700), but a I'm still 100 points adrift on the Dow.

Looking at the Dow chart, I can't see much hope of a 100 point drop any time soon, so sooner or later I guess I'm going to have to take the loss...

This lark isn't as easy as it looks...

Hi Calvin,
Well it's Friday never the best day of the week.Generally too wishywashy and often I don,t trade
particularly if previously the week has been good to me.
But I,m feeling brave today or is that reckless???I would anticipate quite a tight range today
support around 9990(should this fail I'm stuffed) and resistance around 10050.My read of Fins is that(considering their spread earlier today)they anticipate upwards pressure if any.The best opportunity might be a spike at the start of trade.Don't usually do this as normally I'd be asleep
and prefer not to see what's going on but when I'm about I just feel the need to take a peek.
Glad I'm not long term short mind but it could easily come back your way eventually it's just that I prefer the day to day stuff.
Good luck.
Off to fix the Citroen(again)See you at the open perhaps.
Cheers
Tel

Simple comme bonjour.

 

[frog]

Hi all,
Just finished the motor which now bounces as it should.It's got that typical Citroen suspension
the front of which had progressively lost its give.
Just noticed that Fins have moved their spread further from the yesterdays' close,serves me right for peeking I suppose,it's a better position than I took this morning but "c'est la vie" as we say here.

Simple comme bonjour

 

[Calvin]

I prefer the day to day stuff too really - I never intended this sell position to be a long term one, it's just sort of working out that way...! I actually got back to break even on the Dax earlier, and thought about closing the position, but with my usual skillful reading of the market I thought it might carry on down, so naturally it's bounced back up now. Great.

And the Dow has, of course, swung 40+ points up again. A move one way, followed by a more forceful swing the other way to close seems to be the way of things at the moment...

 

[frog]

I prefer the day to day stuff too really - I never intended this sell position to be a long term one, it's just sort of working out that way...! I actually got back to break even on the Dax earlier, and thought about closing the position, but with my usual skillful reading of the market I thought it might carry on down, so naturally it's bounced back up now. Great.

And the Dow has, of course, swung 40+ points up again. A move one way, followed by a more forceful swing the other way to close seems to be the way of things at the moment...

The open was very interesting and despite the Dow dropping to about 10019,Fins moved their spread up and put me a winning position straight away.I've been out shopping since and have come back to a small 19 point gain and it's looking flat and dull to me, so I will keep watching.Wouldbe good if it could get over 10050 with a bit of conviction and give me some more gains but I doubt it.
Cheers
Tel

Simple comme bonjour

 

[frog]

Calvin,
Can't stand it any more and have just sold for 10088 for a gain of 60 points which is quite a result considering my earlier prognosis.Should it continue and go through 10080 with some conviction(Wednesdays' close)then I've missed some greater gains but I'm pleased with my unexpected result.I'm off for a Ruby to celebrate.Will try and post my dealings over the weekend to give you an idea of what I'm doing.
But for now I'll leave you with this thought;
Imagine the worse scenario,Bush assassinated(not sure about that one),we run out of oil or Greenspan admits he's screwed it up.What would happen to the Dow?Where would Fins set their spread and what would you do ?
Have a good weekend
Good luck
Salut
Tel.

Simple comme bonjour

Just checked back with Fins and it seems to have flatlined for the minute.I'll look at the close later and see if I did right to pull my position when I did.I don't know how people can sit and watch the screen all day,it plays total havoc with my swede and is about as interesting as watching jelly set.On that note I'm out of here.

 

[Airthrey Capital]

Meanwhile, getting back to the subject of spreadbetting..........

Assuming you are a high rate tax payer in the UK, and you are not trading professionally, and you earn more income from your usual day job than from spreadbetting........

Let's take the example of someone who wishes to buy a FTSE option from an SB (say, City Index), compared to making the transaction through a traditional options broker (say ODL Securities / MyBroker)


1) City Index Example

Sep FTSE 4475 Call - ( City Index Quote 20-24)

Action: place an "up" bet at £50 per point at 24 to open

7 days later....

Sep FTSE 4475 Call - (City Index quote 30-34)

Action: place a "down" bet at £50 per point at 30 to close

Result: £300 trading profit

= £300 profit


2) ODL Securities Example...

Sep FTSE 4475 Call - (Market quote 21-22)

Action: Buy 5 lots at 22 to open

7 days later...

Sep FTSE 4475 Call - (Market quote 31-32)

Action: Sell 5 lots at 31 to close

Result: £500 trading profit Less £48 commission Less£200 CGT

= £252 Profit


Granted, in my example above, both the market quote and the City Index quote have moved exactly in line ( i.e 10 points). In reality, there may be some bias of a point or 2 either way in City's quote.

If your profile fits the opening paragraph, it may well make sense to spreadbet after all.

 

[frog]

Is that aimed at me?
I thought my general comments were about spreadbetting.
It can be quite stressful and I can't see any real harm in a touch of social banter.
I assume it's a senior members perogative to chastise us amateurs and I bow to your obvious
superiority.
I was hoping to show those learning the ropes an alternative to the usual ideas for successful trading but I'm not fussed whether I do or not,it's your choice.
But before I leave I would ask if you actually traded the FTSE scenario and acquired the spread
that you have quoted 'cos I'll change my SB provider forthwith.
I'm just home from the nightshift and am rather tired(I apologise yet again for going off topic)
but as a parting gesture will post my last weeks trades,spreads and S/Ls that I took on my 5 successful positions on the Dow before the day is out.

Frog

Les mots sont facile à dire mes les actions parlent beaucoup plus fort.