A: Below, I've outlined how a conversation should go with your spread betting firm; don't expect a long-winded courtesy as dealers are typically very busy and they have to supply you with a quote as quick as possible.
Let's assume that you think (from your research) that British Airways has become overvalued and you expect them to go down. You'll phone for a quote and you'll say:
'Hello, can I have a dealing quote for British Airways Rolling Cash for a £10 a point bet please?'
(NEVER tell the dealer when you ask for a quote whether you want to place an up bet or a down bet, example: 'British Airways Short please'. Simply ask for the British Airways quote).
The dealer will then quote a price, for example 180-181. This quote represents the bid offer spread for British Airways 'Rolling Cash'.
Compare the dealer's quote with where you think the price of British Airways will go. If you think it will go lower than 180, you would say: 'Sell £10 a point.' The dealer will then confirm the trade to you: 'At 180, you sell £10 per point British Airways Rolling Cash.'
You must always wait for the dealer to confirm your trade and not assume that you have executed your trade on giving your instructions to buy or sell.
It is important that you give your order immediately. Prices in the markets are changing all the time, and a price quotation has to be accepted or refused within seconds.
If you don't wish to make a trade after receiving the quote, simply say: 'Nothing done'. Communication over the phone can be risky, and when it's as serious as this it has to be made clear so that each party understands. It's not being rude at all; you are just doing business.
It is worth noting that dealers present the Sell and Buy as two numbers. They rarely say: "Sell is...." etc. They simply state: "British Airways 180-181". You should read these as the first number being the SELL and the second being the BUY. This is standard practice and if you're not sure what they said, ask them to repeat it. However, the second time around it maybe a different number as the markets do move very quickly. In this case you might hear 'out' or 'change' meaning that the price has now and you can no longer deal at the original quote. You may then request a new quote. That's how fast spread betting quotes can change, and what makes it such an exciting, adrenalin fuelled trading vehicle. That, and the money you can make from it!
By instigating the trade in the above example, you now have an open position.You are now short a £10 bet of British Airways at 118.
Please note that no cancellation, adjustment or waiving of a bet is possible once it is executed - you can only close the position.
To close your spread bet position, simply follow the same procedure described above, this time placing an equal and opposite spread bet in the same way as previously opened. In the above example you would now need to instruct the dealer to buy £10 a point Rolling Cash bet on British Airways to close your open position.
A: In most instances the markets move so quickly that phone trading is not viable IMHO. I rarely have problems with spread betting providers accepting orders online.
Investors who deal online will soon understand the inherent advantages of internet dealing compared to telephone trading. You can put in stops, you can even put in orders that have not yet been executed (referred to as limit orders). You can access, you don't even need a piece of software, you can go into an internet cafe in Majorca and place a bet if that's what you want.
For instance I rarely have a problem with IG Index accepting an order online. If using a decent (low latency) connection 99% of orders get filled at the price displayed when you click. The other 1% get rejected if the market moves. Using the mobile trader application on a mobile phone may lead to an increase in rejection incidents - but that's understandable. I don't think anyone can feel it's 'unfair' if the dealer rejects an order because you're using a connection with so much latency that the market moved away from the price you were originally quoted.
Keep in mind that most providers are targeted to retail individuals and they probably don't like you using phones to take up dealer time, some even charge extra or not allow it. They would also have to be open to kind treatment per the FSA's Treating Customer's Fairly principle meaning that all clients (be it a small punter or hedge fund manager) would be offered the same level of service.
Of course if you are not intraday trading and taking on a position for some months intraday volatility is less relevant in this context and placing a bet on the telephone would work fine.
Note: Never phone for a quote and tell the dealer what you want to do, for instance do not phone up and say, 'I want to sell £50 per point, can I have a price?' - just ask for a price...
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