Today's news is that the FCA are not happy that so many particularly inexperienced retail punters are losing money on spreadbetting and CFD's.
They are asking for leverage limits particularly for inexperienced clients, no more opening bonuses, and greater emphasis on the risks involved.
As an experienced spreadbetter I trust none of the changes being proposed will have any affect on those of us who are like myself. However, I do also feel, given what the FCA are saying, that there should be greater restrictions on new accounts - especially where persons have no experience trading any margined instruments (including spreadbets). It is too easy, after all, for someone with no experience to 'blow their load' again and again, and to keep the FCA content (at least) surely more needs to be done.
Perhaps spreadbet companies should think of offering a limited risk account, with substantially reduced leverage, for *all* new account openers - *unless* they can prove prior experience with any margined products. Until now, as long as one accepted a disclaimer a newcomer can have the same exposure as any experienced client, and we all know what happens to most newcomers when that happens...
It might well be better for everyone that inexperienced clients should have their trading exposure restricted until they have garnered enough experience, which could e.g., at least be for the first six months to a year. Then and only then will they be able to join the rest of us - again on full understanding and acceptance of the risks involved.
Or does anyone have a better suggestion? Restricting newcomers to demo accounts only, just wouldn't be realistic. But it's clear that the FCA are demanding that something has to be done, to protect the most vulnerable, when a quoted 82% of retail clients lose money.
PS The fact that so many fund managers lose money too, is (..ahem) of course, another day's work altogether...
They are asking for leverage limits particularly for inexperienced clients, no more opening bonuses, and greater emphasis on the risks involved.
As an experienced spreadbetter I trust none of the changes being proposed will have any affect on those of us who are like myself. However, I do also feel, given what the FCA are saying, that there should be greater restrictions on new accounts - especially where persons have no experience trading any margined instruments (including spreadbets). It is too easy, after all, for someone with no experience to 'blow their load' again and again, and to keep the FCA content (at least) surely more needs to be done.
Perhaps spreadbet companies should think of offering a limited risk account, with substantially reduced leverage, for *all* new account openers - *unless* they can prove prior experience with any margined products. Until now, as long as one accepted a disclaimer a newcomer can have the same exposure as any experienced client, and we all know what happens to most newcomers when that happens...
It might well be better for everyone that inexperienced clients should have their trading exposure restricted until they have garnered enough experience, which could e.g., at least be for the first six months to a year. Then and only then will they be able to join the rest of us - again on full understanding and acceptance of the risks involved.
Or does anyone have a better suggestion? Restricting newcomers to demo accounts only, just wouldn't be realistic. But it's clear that the FCA are demanding that something has to be done, to protect the most vulnerable, when a quoted 82% of retail clients lose money.
PS The fact that so many fund managers lose money too, is (..ahem) of course, another day's work altogether...
FCA concerns on Spreadbetting
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