Is this true about SB companies?

[dmedin]

According to ADVFN: The spread betting company won’t charge you a commission or a fee (they make their profits on bets that you lose).

If that is true then they really have an interest in most clients losing money, and their business would be in danger if clients became more successful.

[Caseynotes]

12 minutes ago, dmedin said:

According to ADVFN: The spread betting company won’t charge you a commission or a fee (they make their profits on bets that you lose).

If that is true then they really have an interest in most clients losing money, and their business would be in danger if clients became more successful.

no it's not true and you should know as the question has been answered dozens of times.

[CharlotteIG]

1 hour ago, dmedin said:

If that is true then they really have an interest in most clients losing money, and their business would be in danger if clients became more successful.

Hey @dmedin, as Caseynotes mentioned we don't make money from our clients losing. Whilst I can't speak for other firms, I can confirm that IG is a regulated company who hedge the same way as clients. We make our money from spreads/ commissions not clients losing trades. We prefer for clients to win because that would then encourage them to trade more. You can read more about how IG make money here: How does IG make money

[DSchenk]

Found this video there the other day, which shows how IG hedges. (At minute 2.00 approx)

They don't hedge individual customers, but overall positions. So if 100 customers trade let's say FTSE 100, 50 short and 50 long (with same size), they don't hedge at all, cause the customers hedge each other.

If 80 would go long and only 20 short, then at one point they hedge and go long on the underlying market.

 

 

[dmedin]

1 hour ago, Caseynotes said:

no it's not true and you should know as the question has been answered dozens of times.

😮😄