RE: Hi all!12 Apr 2024 07:39
To clarify, I’m no longer spreadbetting and have noted numerous times of the risks involved in over exposing. If you don’t over expose and have a good capital the gains can far outweigh that over a normal isa investment (albeit more risk but more reward).
You can still invest in this over a period of months to ride out dips but will incur small fees for doing so.
It all depends on your risk appetite and how much time you actually have to study all aspects.
For me personally, I feel Rolls Royce is now higher risk for spreadbetting as the swings on a points/pip basis can be far greater. When the s.p was at 110 range and we have those volatile days a 20% drop would be around 22 points/pips.
We can see the same at the current share price with around 4% so the value of spreadbet for me drops and the risk increases.
To conclude, if you are a full time day trader and decent then I’m sure you are profitable but (this is the key aspect) if you are spreadbetting and you got a good run IT WILL NOT CONTINUE so be sure to take profits and lock them into savings/isa if you have the allowance.
The biggest issue with spreadbet is when you make more every number grows and that includes your exposure and risk. This is natural when you’re inexperienced and it will only take one big drop for you to be under pressure and near or close to your margin.
My personal reason for spreadbet is because I wanted the exposure whilst y capital was low it effectively really didn’t matter if I’d lost it. Even with rolls increased 400% if I’d put my capital into an isa I would have never made anywhere near the gains I had. But I did have to endure more stress.
Now I’ve made a nice amount I can lower my risk and exposure and lock into isa.
You have to analyse what you want to gain from it. ISA is a very long term play and more often than not set up for retirement unless you hit jackpot with a couple to enjoy your money.
Spreadbet can give you quick gains but also quick loses which you may be forced take.
Il lead with an example.
ISA - £10,000 to invest. To make £5,000 a company would need to increase by 50%.
Spreadbet - £10,000 to invest so you pick Lloyds. It’s low on volatility and as a daily price movement of 4-5 points. You can then go £500 per point which requires a capital of only £5000 but leaves you with the other £5k as a buffer.
You can make gains as quick as you can lose them but this would require an ISA investment of around £45-£50k which you may not have.
Once you make (hopefully) good gains then lock them into your isa and you’ve done the hard part. Don’t leave your capital in your spreadbet as you will natural increase your exposure and could be in at say £2,000 per point which would only need a 10pm if drop to lose your capital. And if it’s in there it probably will happen if your in experienced and greed grabs ahold of you. Lock it away and start again if you wish.
Just think about it c
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