With Kind Permission of Sir Buns Up Knealing
mcn said that you could only make serious money by punting (presumably on indices) £10 a point or more. Well that would depend on who you are and what serious money looks like to you. It would also depend on the frequency of your trading and the percentage of your winning trades. You can vary your trade weights as you see fit, like changing gears on a bike, depending on your level of confidence in your decisions. Around last June I upped my stakes when I was certain that I knew what I was doing and which way the market was heading and it made a big difference. I dropped down when my surety ebbed. soi used to have a range of bets which he called light, medium and heavy. I stopped spreadbetting companies because their prices move too slowly. Take LLOYDS for example, there are only 50 points in it and the price changes at a relatively glacial rate compared to that of an index and meanwhile you accrue overnight holding charges.
There is of course nothing to stop one (except time and resources) from spreadbetting and trading real shares. Indeed some people use one to hedge the other, as one can short with SBs. That is a strategy that adds just too much complication for me. Personally I have stripped down to spreadbetting indices only because it is less time demanding but they move quick as I said above. I rarely trade shares whereas I use to do a lot of swing trading for many years; I keep some for dividends. I think I first came across soi a dozen years ago. He was typically frenetically trading real shares only at the time. At some point he got into spreadbetting and although he held and traded real shares he shifted his focus largely to spreadbetting because it was a quicker route to financial gains. And a challenge. In 2016 he could see that I was doing fairly well swing trading blue chips (usually a 3 week horizon per trade). So he so he says to me that I am missing out on 50% of the game, i.e being able to go short and "come on in the water is fine". As he made it all look so easy I jumped in and set about with the idea of showing him how to do it properly. If ever there was doomed project that was it! You have to learn most of that game for yourself and the learning never stops with many a torment along the way and I stayed many miles behind soi.
Get it consistently right and it is the key to Fort Knox. Or get locked up yourself if you get it wrong. Last year I more than doubled my money in my spreadbetting account due to winning trades. Obviously I don't want to talk about this year as I have gone into sharp reverse! I remark on this just to show what is possible, even with playing a far from perfect game. I don't see a lot of people getting anything like such a return on shareholdings within a calendar year from trading real shares and collecting divis. On iii they used to talk about 10 baggers but forgot about those companies of theirs which turned turtle. Yes there is a lot of risk involved in spreadbetting but with index trading you know that the instrument is not going to suddenly go bust, like several companies I have owned. The two big pluses of derivative trading are: 1. the ability to short 2. and no tax no matter how much you make - and long may that continue!
IMHO,
SBK
My personal opine of spreadbetting remains unchanged . Personally I would rather use leveraged Indices , as a safer way to lose your money .
Gold
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