Margin accounts: marginal benefits


(Dave Smith) #22

If you buy options the only risk is that you lose the price(or premium) you paid for the option. However if you sell an option you are on the hook to sell or buy the shares at expiry regardless of the price, so your loss is effectively unlimited

You can protect yourself, but involves strategies that are a bit advanced for new investors


#23

Buying sounds fine but the selling seems like a calamity. Average people are ruining themselves financially.


(Kenny Grant) #24

The trouble with questionnaires is people just guess or learn what answers are expected. I think this just shouldn’t be offered to retail traders. There should be a capital requirement and limits on leverage at the very least because it’s so risky. It’s almost the antithesis of investing for the long term.


(Rob N) #25

Agree!

An ex-CFO of a UK CFD/Spread Betting business said it’s a really dark business to work in as lots of people lose all their money and then you have to involve debt collectors :grimacing:. They have really big advertising budgets as they make a lot of money per client and constantly need to replace the clients they lose.

I was thinking about applying to work in one until I found out more about it!


#26

I meant a slightly more complicated questionnaire, but yes if you are driven, then nothing will stop you.

The FCA, and the ESMA have introduced some limits.


(Jonny) #27

Someone’s wife on reddit cross-stitched this, after a simliar situation


#28

@Jonny That’s magic (and sounds like exactly the trade I was posting about. -58k).

Cross-stitching bad trades is a business idea for someone. I’d buy a few to remind myself that I know nothing.