Does anyone apart from the broker make money, are SB and CFD scams

Discussion in 'Trading' started by Profitsandloss, Apr 28, 2011.

  1. i have become a bit skeptical of SB and CFD brokers, there platforms offer prices quite different to the actual market.

    now obviously when trading SB and CFDs there is no stock and its just a bet, so if you make money it comes out of your brokers pocket and if you loose money it goes in the brokers pocket and its the way the brokers make money and loose money, so the broker will obviously be trapping you into losing money.
    there softwares i believe are designed for this and completely go against the trader, they give you demo accounts where you will turn into a millionaire quite easily to lure you into making a real account with them, where the real accounts are much harder to trade.

    there really is no success story out there of people who have made money from trading in this way, the only traders that you hear stories of making money are professionals working with professional trading companies. its funny that out of millions of retail traders all over the world no one makes money apart from CMC, gft, CS, IG etc.

    is there anyone out there who has made money with spread bets or cfds.
  2. CFDs are likely for crooks.... not for retail punters...

    You can imagine that an offshore CFD dealer can offer some benefits to insiders or hedge funds with issues of meeting holding requirements or difficulties in finding shares to short..
  3. Sorry, not familiar with all the abbreviations. What do SB and CFD refer to?

  4. I would not trade a CFD unless I was at least 90% sure a position i wanted to take would go my way( especially using the full margin available). And this is not even taking into acct the fact that the CFD market is not regulated here in the U.S. to protect you from bucketshop scams/tactics. Buyer beware..
  5. spread betting

    contracts for difference
  6. Thank you profitandloss I've been in the business for 30 years and never heard those terms used that way.

  7. Visaria


    Yes, I have made money for many years using spreadbet companies.

    First of all, they are not brokers, they are market makers. Their prices are based on the underlying market. Their prices are not different from the underlying. If they were you could arbitrage them with the underlying market. I would be rather pleased if they were since i would arb the crap out of them.

    Most people lose money with SBs, just the same as most people lose using the underlying markets.
  8. Elder000


    Stay away from CFDs because currently only bucket-shops deal with CFDs

    Once well established brokers like MB and IB and others uptake CFDs then it will be safe I guess
  9. Visaria


    The big reason why you're a loser is probably because you are day trading with them. Their spreads are bigger than the underlying market spread. For position trading i.e. at least overnight, they can't really be beat for most instruments. Profits are tax free, you can take advantage of management techniques much easily due to the much smaller positions you can take. Excellent for very small accts like yourself.
  10. Visaria


    I have not dealt in CFDs, but I understand they operate the same way as a spreadbet. Spreadbets are more geared to wards retail investors, but companies are not allowed to use them. Companies can however use CFDS. The advantage seems to be that if you buy shares on the LSE, you are subject to stamp duty of 0.5%. Also it is difficult to short shares. CFDs have neither of these problems.
    #10     Apr 29, 2011