Life Expectancy of a Spread Bettor
May 3, 2012 at 3:39 pm in Trading Mistakes by
I was communicating the other day with a representative from one of the spread betting firms, but I can’t tell you which one. She (I assumed from the name on the email address) divulged some information about the life expectancy of a spread bettor. I don’t mean how long we live, but how long a new spread bettor keeps it up before giving up or at least switching to a different spread betting company.
Apparently, the average client lifetime for a spread betting company is just 6 months, although this particular spread betting company (which I really can’t name) claims an average client lifetime of 12+ months.
By these standards I am positively ancient, having held accounts with a number of spread betting companies (on and off) for several years.
Another couple of facts and figures for you, according to my secret source:
Spread bettors, on average, make 40+ opening trades per month with an average stake of £4-per-point (presumably on big-ticket items like the FTSE 100 at ~6000).
It’s just a thought, but maybe if newbie spread bettors made fewer trades and practiced prudent position sizing then they wouldn’t end up as losers and would live longer (metaphorically, but maybe literally as well) than the expected 6-12 months.
On the other hand, I’m sure there are plenty of people out there who are perfectly happy trying to ‘get rich or die trying’, and perhaps the spread betting attrition rate reflects that.
Tony Loton is a private trader, and author of the book “Position Trading” (Second Edition) published by LOTONtech.