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Where Can I Place A Bet On The Housing Market?


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I think the message is that the IG index uses a VI's figures (Halifax I believe). Shorting this index is only really feasible if you believe their figures are reliable which given what they have produced recently compared to anecdotal evidence seems very unlikely.

To use this as a hedge is very dangerous in my opinion, I think you could find the value of your home falling a lot more than the payoff from the bet. Basis risk is the technical term I believe and I am sure there are better things to use as a outright punt.

CMC do a index which is related to a lot of house price influenced stocks, I do not know the exact components off hand but would seem better for a punt. Interestingly they started marketing this about 3 or 4 months ago. I assume like any other business because they thought there would be a demand for it.

Edited by pelican
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Ace,

Do not, under any circumstances, give spread betting a go (say at IG) without FULLY understanding both the market you're betting on and the science of spread betting itself. By "fully", I mean at least several months and ideally several years of careful observation and paper trading. Just diving in is financial suicide.

This is an absolutely viscious game and if your are an amateur taking a punt, you are 99.9% likely to lose.

Also remember, you are not simply betting that "house prices will go down". No, the market has already factored falls into the price you are quoted: what you are being asked to do is to bet on the exact magnitude and timing of that fall. That is a very, very different thing than just betting up or down. It's not like betting Black/Red at the casino.

(PS Guess what happened to me :D > :( )

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Ace,

Do not, under any circumstances, give spread betting a go (say at IG) without FULLY understanding both the market you're betting on and the science of spread betting itself. By "fully", I mean at least several months and ideally several years of careful observation and paper trading. Just diving in is financial suicide.

This is an absolutely viscious game and if your are an amateur taking a punt, you are 99.9% likely to lose.

Also remember, you are not simply betting that "house prices will go down". No, the market has already factored falls into the price you are quoted: what you are being asked to do is to bet on the exact magnitude and timing of that fall. That is a very, very different thing than just betting up or down. It's not like betting Black/Red at the casino.

(PS Guess what happened to me  :D  > :( )

Thanks for the advice. I am tighter than a camel's **** in a sand storm. :rolleyes: so will not be rushing in. (Unlike the Majority of BTL's haha) After reading some of the web sites I realise that a lot of thought and understanding needs to be applied before taking such a risk. I will be taking a look at this with great interest.

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Agree spreadbetting is a dangerous game especially on a index using vested interest figures and as stated to win going short prices would have to fall more than expected not just fall as some price falls are already built in i believe at the moment.

I dont know how much of a fall is currently priced in as i dont follow them.

Oxfordite there are plenty of firms offering contracts for difference or spread betting to short shares (deal4free, IG index, cityindex to name a few) but as stated its a dangerous game.

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With IG etc. do they hold the other side of the trade themselves? Or are they just middle men?

For example. You short XYZ stock. It goes down and you profit. Has IG offset that risk financially (IG are actually shorting the stock on your behalf - simply acting as middle men) or are they simply relying on most people losing and paying the few that win out of their own profits like a casino does? If it's the latter then I'm guessing that they wouldn't like anyone who wins too often. :huh:

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