Spread betting offers the private investor access to an incredible variety of markets. But what's the best way to get involved and what are the pitfalls to look out for? Shares' Chris Bourke gathered four experts around a table and asked them to provide some answers
Chris Bourke, Shares: There are so many new spread betting firms around today it can be confusing deciding which one is best for you. Is it just a matter of looking for the tightest spreads?
David Mercer, Finspreads:
Price is obviously one of the things customers are looking for but we break it down - price, product, platform, people and service. Some people are very price sensitive. Spreads are becoming pretty similar across the product ranges so you move down to what product range companies offer; is it rolling trades, is it futures they want, is it even things like binary bets?
After this, you get on to platforms - that is down to individual choice. We all constantly redevelop our platforms and hope at one time or other to have the best platform. But a lot of that also is individual to the customer, to the client. What do they want? Do they want professional looking service, do they want something that's easy to use, do they want complex charting packages, do they want market information?
Then it is down to the people. You still have to talk to them. I know it is predominantly an online business but you still have sales traders and customer services to speak to, and occasionally market makers. The hardest part of the business to differentiate but probably the most important is service. Where do you get the best service? It might be that you get a tighter spread somewhere else but you prefer the service; that means on-line Internet service and people customer-facing service as well.
Dan Moczulski, IG: Spread is important but to a large degree, it is like comparing a Skoda and a Ferrari. One is cheaper but it all depends on what people are looking for. If you need a telephone service, obviously make sure the firm provides the telephone service. If you need the firm to be 24 hours, go to a firm that's 24 hours. A lot of companies are new entrants into spread betting and keen to attract business. The way they do this is by offering tight spreads, but they may not possibly have the infrastructure behind them. I would recommend everybody to simply phone a spread betting company. How long does it take to get an answer that you want? Are they helpful? Are they spending time with you? And that gives you an indication of how a relationship would continue further down the line.
Bourke: Some people might be intimidated by speaking to a company if they are going to consider spread betting. I've sometimes called up spread guys and they have just been curt and off-putting. What would you say to someone who is unsure of what to do?
Dan Moczulski, IG: Unfortunately there still seems to be this image that we are all rough, tough dealers that when you call up we are going to bark down your phone if you have not said the five magic words we need to hear to trade. At IG, we have dedicated account managers - rather than just dealers - who are there to explain any issues the client may need explaining. We have people who have the time, the energy and the training to make sure they can deal with people who are new to spread betting. If speaking to a dealer unnerves you, send the firm an e-mail or use the chat facility that's on the website. We recognise one of the most important things with relation to spread betting is education.
Ian Jenkins, Cantor Index:
Picking the right spread betting firm for you is a combination of everything. It isn't just a matter of the tighter spreads. We have had no more winners on a Monday's daily FTSE when we have had one point spread, so the market movement is way more important than any spread charged
Dan mentioned an important thing - if you are in this market seriously, it is a 24-hour world. One of the key things is you do need a 24 hour desk - certainly one account has to be 24-hour dealing
People and relationships are very important. If a dealer can save you one or two pips just by being quicker on the ball because he knows you, that is way more important than spread
You should also look at the capital adequacy of the companies you are dealing with. We live in a very, very hostile world and the company you are with needs deep pockets and big resources to withstand some of these shocks that have hit the City over the last couple of months.
Bourke: And how do you go about finding that out if you are a spread better?
Ian Jenkins, Cantor Index: It's up to you to build up as you would with any other type of business. Information like 24-hour dealing and the spreads themselves is largely in the blurb of the companies involved and the capital adequacies of companies are just there for people to see. It really is plain who has money backing them up and who doesn't.
David Jones, CMC:
To me, spread is important. I think if you have multiple accounts and you have one account where - and let's take currencies as an example - their spread is two points wider; if you are trading £10 a point, why trade with someone who is two points wider, because you are effectively burning £20 every time you are placing a trade
There's a spread war that's gone on over the last couple years, which is great because it has made spread betting a viable alternative to other forms of trading. A good online platform is also important as well as additional services. Spread betting is not a licence to print money - there are risks that have to be weighed up against the potential rewards. So you have to look at what in addition a spread betting company is going to offer. We all offer seminars to one extent or another. CMC has invested in building a training room in our office in London. We have run two seminars for clients this week on technical analysis and we are running seminars next week on an introduction to spread betting for non-clients. Headline spreads are important, together with an online platform and good telephone service - but then look at the additional services that that spread betting company offers you
Bourke: Do you think that there are too many spread betting companies around?
David Jones, CMC: I think there has been an explosion in spread betting companies over the last couple of years and it is difficult to see a few years down the line that all these companies will be out there. I would expect there is going to be some consolidation in the industry. But again, it is great for your readers because they have all these companies to choose from and go with the company that best suits them.
Bourke: In Shares we have mentioned that there is a dilemma about setting stop losses either too close or too wide. Traders are concerned about being gapped out but don't want to be stopped out too quickly. What do you guys think is the solution?
Ian Jenkins, Cantor Index: I genuinely don't know the answer. I would say it is not a bad thing trading with stops, you can sleep at night, you know there is a finite risk - or there should be a finite risk. It is just so wrapped up in the trading style and in your risk profile.
Dan Moczulski, IG: I think a lot of people wrongly choose how to include a stop or at least the distance that they have the stop loss. Many people choose their stake first and then include a stop loss that risks a certain amount of money. I would thoroughly recommend to people that when they are looking at a market; decide where the stop should go first. It should be the level that if the market does go down to there, you are glad to be out, you're are not upset about it. Now, this may be still a tight stop if you are short-term trading. It may be a wide stop if you are long-term trading, but it should be at the level that you are glad to be out. And so I would recommend choosing your stop size, working out how much you would like to risk and then determining what your stake should be.
David Jones, CMC:
I would agree with Dan there. I think stops are a good thing. I think there is maybe a reluctance with certain people to not want to use stops but you are exposing yourself to levels of risk there. You shouldn't really say, 'Right, I'm going to buy the Euro £20 a point, I only want to lose £200 so I'll have my stop loss ten points away.'
Because, as we know, 10 points in the Euro is like 3 points in something like BHP Billiton. So if you are looking to catch a major move you need to place your stops accordingly to give the market a bit of room to move around and then size your trade
There is no perfect way to setting stops. Occasionally, you are going to get stopped out and if you are long, you might end up getting stopped out on the low of the day and then the market goes through the roof and you have missed out on profits. That is just all part and parcel of setting stops but it is better to be stopped out and live to trade another day rather than not be stopped out and then see your account blow up because of one trade where you wouldn't throw in the towel, and take a small initial loss.
Dan Moczulski, IG: People should do what suits them the most - maybe look at options or binary betting where the risk is limited and the products are formulated where there are not stops but it is still limited risk.
David Mercer, Finspreads: I think the key thing for a client is that if you are going to use a stop, you have to be disciplined and understand what they are. People sometimes feel they are unlucky if they got stopped out and it happened to be the low of the day. Well, it happens and that was the most you wanted to lose at that point in time. You have to accept that and move on to your next trade. And I think when they assess what their level should be, they have got to look at their risk profile. Get as much information as you can about trading styles and then use those that suit you best and likewise use guaranteed stops.
Bourke: How does having access to Level 2 benefit the spread better; is it only for fanatics?
Dan Moczulski, IG: Once again, it is very much what individuals need to help in their trading decisions. If you are a day trader and perhaps jumping in and out of shares constantly throughout a single day, then yes I can see the benefit for Level 2 where a penny here or a penny there is important. If you are perhaps more long-term, it is not so useful. Level 2 itself gives you information on how a price is made through the depth of the market. For some people it will be of use, for other people it will not
Trading is something that requires a lot of effort on your behalf and no single thing will make you profitable as opposed to losing money.
David Jones, CMC:
I completely agree there. I think the Internet has been fantastic with what it has done for private investors over the last five years; the level of information you can get out there, real-time prices, real-time charts, Level 2 - all this fantastic stuff. But it is finding a strategy and approach that works for you that is most important
Let's say you want to do a trade on Vodafone and you are going to take a position on where Vodafone is going to go over the next two months - it's pretty pointless for you to sit there and watch the Vodafone Level 2 screen all day long with the prices flashing in and out and a quarter-of-a-pence change every hour. So it depends on your time-frame, if you are an active day trader, then yes, I am sure Level 2 does give you an edge.
David Mercer, Finspreads: Information is key to any trading style. So if you feel that Level 2 benefits you, go get it. But it all depends on what your style is - short term, long term...
Ian Jenkins, Cantor Index: It is just another tool out there, for about £30- 40 a month you can get Level 2. It helps some people, it doesn't help others.
David Mercer, Finspreads: It can also help people with seeing levels of support and resistance, so it can assist you when deciding where to place your stops and how to trade and what your profile is for that trade. .
Bourke: Which is the better tool for today's markets, spread betting or CFDs - and why?
David Jones, CMC: I would say spread betting. We all offer CFDs and spread betting and a couple of years ago there was a definite difference between CFDs and spread betting. With CFDs you got the market spread; so if Vodafone was 140 to sell and 140-and-a-quarter to buy, the CFD price would typically be 140/140-and-a quarter and the spread bet price for all companies would be a bit wider. So there were pros and cons in both approaches. But now, if you trade Vodafone with CMC and the market is 140-140-and-a-quarter, the CFD is 140-140-and-aquarter and CMC Rolling Cash price is 140-140-and-a-quarter. From a UK investor's point of view, spread betting is tax free and it may be a bit easier when it comes to figuring out where you are going to place your stop and what your risk is going to be.
Ian Jenkins, Cantor Index: For private individuals spread betting gives a massive 40% tax advantage. If you then add all the whistles of spread betting; you can deal in pounds per point whichever market you are in, there are guaranteed stops, you have credit available in spread betting and 24 hour trading - it is a far better product.
Dan Moczulski, IG: I disagree - it boils down to what people are looking for. Because a CFD doesn't have the tax wrapper and is classified as investment, you can use it in several other ways. For example, we have an advisory team that can advise on CFDs so if you are looking for help, if you are looking for someone to analyse your portfolio to aid you in making your trading decisions; you can do that with a CFD but you can't do it with a spread bet. You can trade using direct market access with CFDs but not spread betting. It depends where you see added value. If you are a person who we would classify as execution only then I think predominantly the spread bet will be better because you are simply clicking on a price and taking it on; the more profit it makes the better, because of the tax break. But if you are somebody who wants a few bells and whistlesrelated to the product that are not available from spread betting, then go for the CFD - it is your choice entirely.
David Mercer, Finspreads: With the CFD you have £8,500 capital gains tax allowance which you can use and if you are hedging you can offset your losses. With a spread bet you can't offset your losses within that account. Other advantages you have with spread betting are the breadth of product.
David Jones, CMC: For me, the only reason I could think of for using CFD is if you were looking to hedge. I don't see why, even if you had a two to threemonth view on a market you would use a CFD rather than a spread bet.
Ian Jenkins, Cantor Index: If you make money, 40% difference in the returns just blows away absolutely everything. All the rest is fiddling around with points here and there; hedging and stuff like that. It just doesn't exist anywhere else in the world - spread betting is absolutely way better than CFDs for the normal private investor.
Bourke: So if spread betting is such a good way to make money, why are you guys sitting here instead of in Monaco?
Ian Jenkins, Cantor Index: In a nutshell, I am not a very good trader. I wouldn't be able to make money to sustain my life from trading and the best of luck to anybody who does trade. It is a very, very hard game. I think pretty much everybody knows there are more losers than winners in the game. And spread betting is risky. The risk warnings that every company plasters all over its literature attests to that.
David Jones, CMC: Unfortunately, I think a lot of people never investigate things like spread betting and CFDs because they hear about spread betting and they think, 'Oh that is very risky.' But it's not. Spread betting does not make the markets any riskier than they are. The underlying risk is there in the markets. With spread betting, if your strategy is no good, you are still going to lose money and with leverage you could lose more money than you would if you were trading through a traditional stockbroker. But of course, the flip side is if you have a good strategy, you will make more money. Spread betting is not a licence to print money. You need to have a good strategy.
David Mercer, Finspreads: Trading is inherently risky. That's it. But you know what - we're all exposed to risk. There are around 10 million direct equity holders in the UK. They are all long and sometimes they are long and wrong. They are all long in their property portfolios as well. Now, everyone is moving towards self managed pension funds. We are being asked to take control of our finances. More and more, people are going to have to understand financial markets, understand what is in their pension fund, understand how to trade. So people have to be aware of the risk and remember to use spread betting as a wealth management tool and a wealth creation tool rather than a punt.
Dan Moczulski, IG: It's always risk-reward, if you are interested purely in reward, do the lottery. There is a high risk you will lose £1 every week but the reward is there for you, everything is risk reward. The trick is to use your research and analysis to lower that risk.
Bourke: How does someone hedge their share portfolio by using spread betting, or is there perhaps a better tool for this?
David Jones, CMC: You could do it, of course - let's say a basket of FTSE stocks and the FTSE's trading round about 5400, and you think 'My portfolio is doing well but I am a little bit worried up here'. Theoretically, if you were long £1,000 worth of stocks you could short the FTSE 100 Index on a spread bet and hedge yourself. So if the market drops 10%, your investments drop 10% but of course you make 10% on the spread bet. The tricky side is if you get the hedge wrong and the stock market carries on going up, you are going to make money on your investments, which may be liable to tax at some point when you come to sell, but you are going to lose money on the spread bet which you can't offset against tax.
Dan Moczulski, IG: Any market you can go short on, you can use to hedge a position that you are long on. We could have a lot of clients who perhaps are buying property in Europe and they don't complete for another six months. They could use us to hedge the currency risk - it works.
Bourke: So you have a lot of clients who actually do use spread betting for hedging?
Dan Moczulski, IG: I think everybody here knows that 95% of people are using us for speculative means but it's being used for taking away any risk by using it as a hedging tool. It's very easy to pick up, it's not difficult to do, you can have it on the same account you trade your shares with - it's easy.
Ian Jenkins, Cantor Index: If you are long shares and then you go short, you don't have a position - that's not hedging. I know it is semantics, for example a hedge fund does anything but hedging. They should throw the word hedge out and put punting in. It is a punting fund.
David Mercer, Finspreads: The concept of going short is almost foreign to a lot of traders. All their lives, since they first bought BT shares, they have just been long. The ability to profit by having a bearish view is something new to them and that is what they have got to get their head around first.
Dan Moczulski, IG: I think there are circumstances where it is actually valid if you don't want to sell the stock. Let's assume it is a tax issue. You are coming to the end of the tax year. There may well be a stock that you have made a profit on, that you are worried about going down in price. You could then use the spread bet to hedge because obviously if you were to close the position out, it would be accountable for tax this year whereas you could hold the position through the physical, have a short position on a spread bet and it would take over your tax liability for the next year.
David Jones, CMC: That's a good point. I suppose if it was the end of March, coming up to the end of the tax year and if you sell xyz share you are going to incur a big tax bill and you wanted to defer that for a year, effectively you crystalise your profit or you lock in where you are now using the spread bet and then you close the spread when a new tax year starts, of course you pay tax on your share profits, but you have deferred it for a year.
Bourke: Is there much point in spread betting individual stocks because it just seems simpler to trade the FTSE or the sector and means less homework?
David Mercer, Finspreads: People are informed about certain stocks or feel they have greater knowledge about stocks. Certain people follow stocks for years and probably have better knowledge of it than any of us round the table. Certainly when you get to the small caps stocks, that will be the case. It is probably foolish to try and pick out HSBC or Vodafone to be the best performers over the index. If you just think it is going up or you just think it is going down, then trade the index not the stock.
Bourke: Is there a general feeling that some people have more success on indices rather than individual stocks?
Dan Moczulski, IG: It's all to do with volatility. If the way that you are trading is to do with short-term volatility, then yes go for the FTSE or a sector. It will have more volatility over a short time frame. Equally, the reasons that will move the FTSE or the sector are more macroeconomic so less in-depth research is required.
David Jones, CMC: I think it is down to the individual's personal style of trading or investing. People who haven't spread betted before who come from a traditional share-dealing background will find the transition easier if they start trading stuff like Barclays, Vodafone and HSBC. I think it is important to clarify a common misconception in spread-betting; you don't have to be stuck to your screen ten hours a day jumping in and out all the time. If you have a two-monthly view on Vodafone, then you can trade on a spread bet, put your stop loss in place and let it run. If you want to sit there and jump in and out 10-15 times a day, then definitely the FTSE indices, the Dow, the S&P, the Nasdaq are good in terms of day-to-day volatility. Within an index, there are certain sectors that are stronger than others and there are individual good stock picks in there. So again it is down to you, however you want to do it, there is the opportunity for trading it both ways and I don't think there is a hard and fast rule that says 'No, you do it this way.' You do whatever suits your style.
Bourke: Finding stocks to short-sell can be a difficult task especially when the market continues to rise. Should traders always have shorts in their portfolio and if so, what advice can you give on finding them?
David Mercer, Finspreads: None. We don't provide an advisory service like other spread betting firms. How do you find a stock that is going to go up? How do you find a stock that is going to go down? You have got to do your research. You have got to find out what you don't fancy and the great thing with spread betting and CFDs is that it gives you the ability to short that stock and take a bearish view.
Bourke: Do you think clients should spread their risk and have a certain percentage of shorts in there?
David Mercer, Finspreads: I suggest that most people leave that to a fund that they invest in or leave that to the professionals. It is very hard for us to get the correlations right as laymen.
David Jones, CMC: I think if you can find these stocks, then definitely short them but if you look at a big chunk of the UK market, there is stuff out there that maybe is going sideways but there isn't exactly an enormous raft of stuff that looks like it is about to fall off the cliff. Famous last words!
Ian Jenkins, Cantor Index: Going long or short isn't that much different really, it is just interpreting whatever you are looking to interpret. You are trading and going with it.
Dan Moczulski, IG: If we were currently in the middle of a bear market, it would be difficult to find stocks that you'd go long off. It's just simply what you are happier trading on at that time. Whether you go long, whether you go short, is not in itself the driver of whether you trade or not, it is whether you see an opportunity to make a profit.
. It is important for a private trader to have the same opportunities that an institution has. By doing spread betting, he has those same opportunities but likewise, he should only use the opportunities when it proves prudent to use them.
Ian Jenkins, Cantor Index: For 50/60 years stockbrokers would only let you go long. To me that is just tying your hands behind your back. At least spread betters are given the opportunity to short the same way as your Merrill Lynch and your JP Morgan traders.
Bourke: How much margin would you recommend was given to a spread better with little experience and how easy is that to increase?
Ian Jenkins, Cantor Index: If someone comes and his investment portfolio is £10 million, it may be £1 million you would put as margin. If someone has come with £10,000, maybe as little as £1,000. There used to be advice from the FSA years and years ago and they said don't put more than 20% of your portfolio into speculative markets. I think probably a rough rule of thumb at the moment, whatever your investment portfolio, is look to take about 20% of that as a margin position with a spread better.
Dan Moczulski, IG: Margin itself is the amount of money that you are putting down to hold a particular amount of stock. So generally speaking we offer from 5% on UK stocks. So for £1,000 worth of Vodafone, you only have to put down £50 with ourselves. As an investor, you may actually wish to put £300 or £400 on the account to cover day-to-day movement. But in terms of how much you should use of your own personal wealth, I would suggest the smaller the better to a large degree. Take it very slowly, start with very small bet sizes, put your stop losses on, monitor the market in the way that you are comfortable doing and then take it from there.
David Jones, CMC: When you deposit X with a spread betting company, that spread betting company lets you leverage that money up. I think we have all got fairly generous margins, with us it is 5% on the FTSE350. So again, if you want to do a £10,000 trade on Vodafone, then £500 will be initial margin. But just because we give you the facility to leverage your money, for example 20 times, it doesn't mean that if you put £1,000 in a spread betting account, your first trade has to be a £20,000 position. You can trade with us from as low as £1 a point.
David Mercer, Finspreads: The margin for a spread bet is basically protecting the house against the worst case scenario and it is the same for a trader. If you have got a £100,000 stock portfolio, you have probably got to get your head round the fact that you could lose £5,000 or £10,000 and that's the way you should look at the spread bet.
Can we discuss commodities and which are the best ones to spread bet? Where do we find the most movement and how easy are commodities to trade.
Jenkins: Commodities, probably more than any other sort of markets, come in and out of vogue. When I very first started, everybody traded wheat and soya and cocoa. There was a drought in America. Now it's oil, that's what people are mostly trading in commodities at the moment. That's where the volatility is, that's where the movement is and typically, if you are trading in commodities, that's what you are looking for.
Dan Moczulski, IG: It is a market that becomes popular and then as time goes by, it becomes less popular. The one thing I would make clear to people is that they should make themselves aware of how a particular market trades. Such things as limit up, limit down, still prevalent in commodity markets. Pit-traded products, electronically traded products, they trade in different ways. It is important for potential traders in commodities to recognise these kind of things.
David Jones, CMC: The big high profile one at the moment is oil. We've seen a $5 move this month in oil which is 500 points in spread betting terms. Of course, it's important to understand if you are going to trade in these new markets exactly what a point constitutes. If oil goes from 60 to 65, that's not 5 points but 500 points. If they are new markets to you, start small; keep your risk small to get a feel for how these markets can work . You can trade a whole host of commodity markets.
David Mercer, Finspreads: From time to time, different commodity markets are the movers and sometimes they are more interesting. You have got more propensity to gain through trading commodities than you will do on an index or an individual share. We all offer so many - frozen orange juice, butter, pork bellies.
Bourke: Can you guys explain what a rolling spread bet is and why anybody would use one?
Dan Moczulski, IG: Essentially, it is a bet that is based on one day. Some of those are called rolling spread bets, some are called daily spread bets but generally speaking it is a product that mirrors the market. One of the ways you make futures pricing is to include the opportunity cost of dealing on a market that actually expires in the future, typically called cost of carry.
With a daily bet or a rolling bet, this is not required. So the price that you see mimics 100% the price that is in the market. Every day you roll it over, it will have a financing cost attached to it. Typically speaking, this financing cost is more than would be attributed to a futures trade but because obviously it is over 1,2,3 days, it is not as large and so, in my opinion, it is best used for short-term trades that are, say, sub-20 days. Long-term, I would perhaps go for the futures. But everyone is going to be different in this respect, it all depends on their individual charges.
David Jones, CMC:
It is a bet that if it is not closed at the end of the day, it rolls over to the next day. It is particularly suitable for short-term trades and it is just a fantastic, transparent way of trading. The easiest way to compare market spreads from one company to another is look at the daily bet and see if they are reflecting what is going on in the underlying market. If you are in and out the same day, then there is no finance due so you can margin yourself up and if you close it out by the end of the trading day.
With us, if you don't close it out, we roll that over into the next day and there will be a slight finance adjustment and the trade runs into the next day and into the next day until you choose to close it. The rolling cash flow is fantastic because you have the transparency there with the underlying. We offer rolling cash bets on everything.
Bourke: Do I need to be a chartist to be a good spread-better? Can I not get on with fundamentals instead of learning all the technical guff? .
David Jones, CMC:
Spread betting is a vehicle for trading various financial markets so however you analyse the financial markets that you look at already, there is no reason why you cannot transport that methodology into spread betting on these markets.
If you think Vodafone is going to go up in the next two months because there is going to be a big surge in people signing up to their network and we are going to see an explosion in China of mobile phone use, then I would say you would trade that via a spread bet.
The fact that you are doing it on a spread bet does not change your analysis approach. If you are going to go long FTSE because you think the trend is up then again you would use spread betting as a methodology to carry that trade out. So you do not have to alter your analysis approach to financial markets just because you are spread betting. It is just a way of trading that market from a short to medium-term perspective.
Ian Jenkins, Cantor Index: I know people who make money out of being a chartist, people who lose money being a chartist. I know people who make money with fundamentals and lose money through fundamentals. Spread betting is only the vehicle to make money.
Dan Moczulski, IG: I think it is worth pointing out as well that fundamentals do not affect hour-to-hour trading, it is a more long-term strategy. If there is anything that would affect the fundamentals, such as a piece of news, I think you have to be realistic enough to realise that you won't be the first person to hear that piece of news. And so I perhaps wouldn't trade short-term markets using fundamentals.
David Mercer, Finspreads:
I think one thing I would say as a piece of advice to retail investors is that we all offer charting services and there is a lot out there on the street. We have all got analysts and if you choose to trade that
way and you haven't been exposed to it before in the market, you have got to apply the discipline
these guys teach you.
Sometimes guys learn technical analysis, they become chartists and then all of a sudden, they fancy having a cheeky £100 punt on the Dow. That doesn't suit potentially the strategy the chartists or technical analysts had advised. So if you are going to go with that methodology, keep to your discipline.
Bourke: Could you give me a 6-12 month view on where you think the market is headed?
Ian Jenkins, Cantor Index: If I knew I would be telling you from Monaco. I'm bullish short-term but as we have seen with news events over the last couple of weeks, that can end in the blink of an eye.
Dan Moczulski, IG: Exactly the same - it seems to be going up despite certain elements not necessarily backing the view that it should increase .
David Jones, CMC: A cop-out would be to quote JP Morgan when asked what the market was doing. They said 'It will fluctuate.' I think we have seen three-and-a-half year highs, set on a weekly basis over the last few weeks, that is a sign that the market is very strong, the dips keep getting bought.
David Mercer, Finspreads: I think globally 6-12 months, it looks like it's going up but there are going to be fluctuations and what you are saying to retail investors again is 'Don't try and top and tail'. People try constantly to pick the peaks and the troughs. So pick a trend and get some part of that instead. Don't be scared by spread betting - it is just an efficient vehicle to provide global market access to the retail investor.
Bourke: There is a common myth isn't there that you guys make more money if the punter is losing?
Dan Moczulski, IG: If a client loses, that doesn't go into the coffers of any firm, it doesn't work like that.
David Jones, CMC: Also, if you lose, even if the client blows themselves out, you have to pay marketing to go and get new clients in so you have the cost of acquisition of new clients, whereas if you had all your clients trading back and forwards all day long you would sit and take the spreads, thank you very much.
David Mercer, Finspreads: We want the bit in the middle - it was ever thus in financial markets. The reality is throughout the industry - if someone is trading with you after three years, they will trade with you forever. That's what you want.
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