I believe it was James who said that for every £1 spread bet on the FTSE, you should have £7200 - perhaps even deposited on your account. That's your true leverage.
If you (one) is 'joking' around with a few hundred points worth of cash on your account, and worry about losing your 'pot' I have a tip for you. Withdraw your cash and go to the nearest casino, and stick it all on red. Your odds will be much better, and you may actually win something back.
I feel your pain. I did really well with my SB demo account and progressed to trading in a live account with real money. Long story short, after much time, effort and stress I finally got out more or less at break even. I was almost drawn back into it on a couple of occasions when seeing 'opportunities' but managed to stop myself doing it and then closed my SB accounts so I wouldn't succumb to temptation again.
Going by the statistics very few people are successful at spread betting. I've had much more success with buying and holding shares and ITs coupled with occasional swing trading and I'd go as far as to say I rather enjoy it.
Good luck to you whether you stick with it or find another way of doing things.
Hi JD - your right to say not to panic and it feels to me as we speak now that the worst is behind us for the time being and both S&P , Dow & less so FTSE have tried to bottom and touch the early weeks lows.
Although, I have no SB FTSE exposure at the moment I know that pain from time to time which made me reduce my stake and trade a little like JTT in trying to stage in similarly with individual shares as we cannot get it right on the first time of asking . No need giving you advise as you will know what you need to do if markets are kind to you from here. Maybe with a bounce in the FTSE will allow you to de-leverage a few individual stocks without pain.
Shocking, terrible, the world is ending. However, at 25000 odd, it's the equivalent of 400 point moves in 2008/9 when the Dow was around 10,000. The absolute number is high yes
("biggest point fall in history"...".2nd biggest point fall in history after monday" etc etc)
however, in percentage terms there's nothing that we should be too worried about here. In fact, after the relentless low vol grind up, a bit of volatility might just bring some sense back to the market.
Hopefully it won't come to that Jack (losing your pot that is). You have always posted worts and all and that is good to see, even if it is painful. That is reality with leverage. I have been mindful of leverage but still got caught out by not anticipating such a quick big move.
FWIW I think 7000 will hold although of course I don't know. Lets see what the US session brings and then next week.
Just came across this in my email account during my ongoing purge of accumulated mails. Thought some might find it interesting. 'Carnage', FTSE drops 2.7% to 5689. Funny really, that 2 years after this 'carnage' and after our recent 'carnage' we're sat at 7153!
Everything is relative, and we're currently accustomed to teh 7000's, it will be very interesting to see what the story is in 2 years time?
Anyway, if you enjoy this sort of thing, then this is your sort of thing.
Thanks. I'll certainly need plenty of luck & the rest. Margin will be under extreme pressure if similar degrees of selling continue well beyond this week. As we appreciate, no hiding place for those found out with leverage & I've decided a while back that I'll not be throwing more cash at it.
Though my biggest challenges with SBs run across a few leveraged longs on individual stocks, also mostly well down, there is at least some grounds for thinking that UKX may see a bottom very soon. Which would help matters.
As regards UK's closing levels (not intraday or after-hours noise), one sees UKX saw a lot of support not far below these levels back in April 2017. If those levels hold, as we know, things can change fast again in this game.
Only a couple of weeks ago it wasn't unusual to see many BB comments & financial press articles speculating on UKX making new highs soon & DOW to test 30K later this year. Now some talk about UKX well under 7K & DOW under 20K.
Well that remains to be seen. For my money, the selling is now overdone, but so was the buying before it.
Key thing is not panicking & knowing one's limits. If I lose my SB account, however financially painful that'll be, I'll also have learned much more about what NOT to do in future. - All the best!
Good luck Jack. I am also a trapped bull as must be obvious to all. My plan was to sit it out if something went wrong, which it has, and as Jack mentioned those dividends are going to cover holding costs.
I use leverage to juice up my ISA returns. I wasnt expecting the magnitude of the drop that we had this week, we live and learn. The UK is not overvalued like the US and the dividend yield is good so its not a bad place to hold. But its not nice being underwater.
I hope you manage to weather this one out. Not many people seem to be making money out of this at the moment - becoming an expensive hobby.
Dow closed at 28/11/17 level. Discounting the election announcement blip in April 2017 we are still hovering at level not seen since the end of 2016. It seems that all the heat has built up on the DOW and we are being dragged down by the correction. I would expect the DOW up today and a chance the FTSE will be in positive territory at the close.
Typo corrected, as long only on UKX: "NB: though of little consolation to my 2 well underwater UKX LONGS (though I've taken many UKX points on quick unannounced day trades), maybe of interest is that UKX divis are about to rise again, which at least covers holding costs. Next week over 25 pts, then almost 10 pts week after & by the time those are paid, divis for March & following months will start to rise sharply."
Though huge sell-offs after periods of euphoric buying nothing new, the degree of extreme volatility seen almost hourly over recent days across UKX, but not least in US & Asia, also indicates the growing predominance of trading algorithms. Vast majority of trades on Wall Street now algo-driven. Hence, the frequency of some very sudden drops of hundreds of points in some indexes.
Not unusual to see DOW swinging many hundreds of points almost hourly & even UKX, mostly tied to that mad American arena, also seeing moves of over 200 pts daily, if including after-hours trading.
Lest we forget, this theatre is dominated by large hedgies, with hundreds of millions of margin to play with, in turn frequently squeezing myriads of retail traders out of their positions at huge loss.
To play with the big boys & survive over the long-term, you need either huge margin, a hell of a lot of skill, or else plenty of luck.
Needless to say, unlike my success with real shares, with leverage I'm fighting on a few fronts just to survive this carnage. If I don't last out, I'll be closing down my SB account. - My first trade was done 23/02/2011. In nearly 7 years trading SBs, still not made a penny profit from it overall.
They say, only some 10% of leveraged traders are successful over time. But of that percentage, IMO, far fewer are good enough to do it as their sole source of income.
Frankly, IMO, markets a bit of a lottery the past few days & backing racing horses is probably no less reliable.
NB: though of little consolation to my 2 well underwater UKX shorts (though I've taken many UKX points on quick unannounced day trades), maybe of interest is that UKX divis are about to rise again, which at least covers holding costs. Next week over 25 pts, then almost 10 pts week after & by the time those are paid, divis for March & following months will start to rise sharply.
Probably not looking for any more BP but I may top up a few funds here and there. This thing has a little further to play out so key I guess for all of us is to try and stay nimble. Easier said than done.
FTSE only 24 off after a (1000) dow. Pretty impressive to be fair.
" FTSE FOR FRIDAY (FTSE:UKX) It's rare for us to approach the weekend with a "thank goodness it's over" but the last week has been rather foul. We love market volatility as it makes life bearable but the FTSE has shown more movement in the ..."
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