Just Discovered Ig Index Let You Bet On Uk Hpi

[markyh]

Hi all.

A few months back I started having a play spreadbetting with IG Index. Bored this afternoon I was looking at at all the stuff you can trade on their platform. Then at the bottom I found UK house Prices. So I thought why not.

Took a June 2011 short on UK house prices. Sell 160 (£160000 average price i guess) Limit 140 (£140000 average price) stop 170 (£170000 average price)

Took the minimum which was £10 pip and the spead was 2.8 pips.

So am gambling that UK Average House prices will fall up to 13% within the next 11 months and not rise 6.5%.

Even though I rentered the housing market in March 2009 after going STR in August 2007 I think we are now heading for another drop.

With with the Condem's Austerity cuts, culls in public sector jobs, tightening of the credit markets, the FSA recent annoucment to ban Self Cert mortgages and force lenders not to allow new mortgage approvals based on Interest only without proof of capital repayment system (Just like it was in 96 when I bought my first house) I really can't see any way but down for HPI.

Oh....and HIPS has been scrapped giving rise to a return of 2007 and before practicies of properties being put on the market to "test the water". Rightmove report that there are now more sellers than buyers and as in anything that just sends prices one way.......down.

Anyone else done this in 2007 or this time around?

M

[Pent Up]

Thought about it but the spread is quite wide. Also I'm not prepared to risk any of my house deposit, I stopped spread betting crude last year after making some quite tasty profits which help to build it. It would mean risking quite a bit in order to make a worthwhile profit. Also I'd be a bit concerned about manipulation of the price as it's only 'based' on halifax but will move depending on the orders they receive.

Edit: I think there is another thread a while back maybe in the investing forum.

Edited July 14, 2010 by Pent Up

[campervanman]

Hi all.

A few months back I started having a play spreadbetting with IG Index. Bored this afternoon I was looking at at all the stuff you can trade on their platform. Then at the bottom I found UK house Prices. So I thought why not.

Took a June 2011 short on UK house prices. Sell 160 (£160000 average price i guess) Limit 140 (£140000 average price) stop 170 (£170000 average price)

Took the minimum which was £10 pip and the spead was 2.8 pips.

So am gambling that UK Average House prices will fall up to 13% within the next 11 months and not rise 6.5%.

Even though I rentered the housing market in March 2009 after going STR in August 2007 I think we are now heading for another drop.

With with the Condem's Austerity cuts, culls in public sector jobs, tightening of the credit markets, the FSA recent annoucment to ban Self Cert mortgages and force lenders not to allow new mortgage approvals based on Interest only without proof of capital repayment system (Just like it was in 96 when I bought my first house) I really can't see any way but down for HPI.

Oh....and HIPS has been scrapped giving rise to a return of 2007 and before practicies of properties being put on the market to "test the water". Rightmove report that there are now more sellers than buyers and as in anything that just sends prices one way.......down.

Anyone else done this in 2007 or this time around?

M

Surely if you were betting on prices falling you would only set an upper stop limit for prices?

[Georgia O'Keeffe]

Surely if you were betting on prices falling you would only set an upper stop limit for prices?

nah, a negative result is your stop, a positive result is your limit

Its effectively setting a price target to take profits to avoid a retrace if it gets there early

[abharrisson]

Hi all.

A few months back I started having a play spreadbetting with IG Index. Bored this afternoon I was looking at at all the stuff you can trade on their platform. Then at the bottom I found UK house Prices. So I thought why not.

Took a June 2011 short on UK house prices. Sell 160 (£160000 average price i guess) Limit 140 (£140000 average price) stop 170 (£170000 average price)

Took the minimum which was £10 pip and the spead was 2.8 pips.

So am gambling that UK Average House prices will fall up to 13% within the next 11 months and not rise 6.5%.

Even though I rentered the housing market in March 2009 after going STR in August 2007 I think we are now heading for another drop.

With with the Condem's Austerity cuts, culls in public sector jobs, tightening of the credit markets, the FSA recent annoucment to ban Self Cert mortgages and force lenders not to allow new mortgage approvals based on Interest only without proof of capital repayment system (Just like it was in 96 when I bought my first house) I really can't see any way but down for HPI.

Oh....and HIPS has been scrapped giving rise to a return of 2007 and before practicies of properties being put on the market to "test the water". Rightmove report that there are now more sellers than buyers and as in anything that just sends prices one way.......down.

Anyone else done this in 2007 or this time around?

M

It's a funny thing but I've found there are hoardes of people on this site who swear blind that a real crash is now happening and that we'll see a pretty steep and deep correction but I'll wager only a very very smal proportion would bet on it.. they'll have al sorts of excuses of course ranigning from can't be bothered to don't understand how it works etc but the bottom line I suspect is that when it comes down to it they don't fancy their chances as much as they said they did.

of course still more might try and insist that they are already betting by being out of the market but bear in mind they might well have been saying the same for years and not have the depsoit cash anyway... equally whats wrong with improving your position with a sure fire bet... this one can't lose can it... I wonder how many will rise to the challenge and actually put a bet on... I won't becasue I think the spread already represents the gradual change I thhink is the most likely outcome.... those who said I am worng can bet against me if they have the balls

[@contradevian]

It's a funny thing but I've found there are hoardes of people on this site who swear blind that a real crash is now happening and that we'll see a pretty steep and deep correction but I'll wager only a very very smal proportion would bet on it.. they'll have al sorts of excuses of course ranigning from can't be bothered to don't understand how it works etc but the bottom line I suspect is that when it comes down to it they don't fancy their chances as much as they said they did.

of course still more might try and insist that they are already betting by being out of the market but bear in mind they might well have been saying the same for years and not have the depsoit cash anyway... equally whats wrong with improving your position with a sure fire bet... this one can't lose can it... I wonder how many will rise to the challenge and actually put a bet on... I won't becasue I think the spread already represents the gradual change I thhink is the most likely outcome.... those who said I am worng can bet against me if they have the balls

Well I concur with you about the current spread, and so won't be betting. Kudos to the OP for his confidence and being prepared to put his money (publicly) where his mouth is. There won't be a House Price Crash, but a very long slow (boring) decline.

Edited July 14, 2010 by SirStirlingSlumlord

[campervanman]

nah, a negative result is your stop, a positive result is your limit

Its effectively setting a price target to take profits to avoid a retrace if it gets there early

Thanks

[Georgia O'Keeffe]

It's a funny thing but I've found there are hoardes of people on this site who swear blind that a real crash is now happening and that we'll see a pretty steep and deep correction but I'll wager only a very very smal proportion would bet on it.. they'll have al sorts of excuses of course ranigning from can't be bothered to don't understand how it works etc but the bottom line I suspect is that when it comes down to it they don't fancy their chances as much as they said they did.

of course still more might try and insist that they are already betting by being out of the market but bear in mind they might well have been saying the same for years and not have the depsoit cash anyway... equally whats wrong with improving your position with a sure fire bet... this one can't lose can it... I wonder how many will rise to the challenge and actually put a bet on... I won't becasue I think the spread already represents the gradual change I thhink is the most likely outcome.... those who said I am worng can bet against me if they have the balls

As I'm technically an evil str for the last coming up to 4 yrs now I have put a bet on, if I was a homeowner I'd love to find a good market to hedge the full risk of falls and would happily do so except ig don't allow a proper hedge because anything over net 25k is penalised through spread and the housing index is secondary to the stock index as that has potential to fall 90% whereas I can't see more than 50% of houseprices nominally although 70% + is likely in non sterling

Edited July 14, 2010 by Tamara De Lempicka

[Misanthrope]

.....if I was a homeowner I'd love to find a good market to hedge the full risk of falls and would happily do so except ......

..... I don't have any money to do it, even if I knew how! What a pity. Damned credit markets. Why can't I get it anymore? I'm not British - honest. I am good for it - honest!

[markyh]

Hi all.

A few months back I started having a play spreadbetting with IG Index. Bored this afternoon I was looking at at all the stuff you can trade on their platform. Then at the bottom I found UK house Prices. So I thought why not.

Took a June 2011 short on UK house prices. Sell 160 (£160000 average price i guess) Limit 140 (£140000 average price) stop 170 (£170000 average price)

Took the minimum which was £10 pip and the spead was 2.8 pips.

So am gambling that UK Average House prices will fall up to 13% within the next 11 months and not rise 6.5%.

Even though I rentered the housing market in March 2009 after going STR in August 2007 I think we are now heading for another drop.

With with the Condem's Austerity cuts, culls in public sector jobs, tightening of the credit markets, the FSA recent annoucment to ban Self Cert mortgages and force lenders not to allow new mortgage approvals based on Interest only without proof of capital repayment system (Just like it was in 96 when I bought my first house) I really can't see any way but down for HPI.

Oh....and HIPS has been scrapped giving rise to a return of 2007 and before practicies of properties being put on the market to "test the water". Rightmove report that there are now more sellers than buyers and as in anything that just sends prices one way.......down.

Anyone else done this in 2007 or this time around?

M

Who said it was impossible to make money on this and only the spreadbetting company will win? This bet is less than two months old now and already the IG Index price has dropped to my entry level of 160k. So my 2.8 pips spread (£2.8k HPI value) is now covered and for every £1k in HPI drop I will now be up £10 profit.

And it still has 10 months to run unless I decide to close the bet early at some point. I reckon this could be an easy £200 profit now in the average HPI drops to £140k by next June.

M

[Beggar Thy Children]

Nice one, good to see someone willing to put their money where their mouth is!

[Lagarde's Drift]

Forgive my continuing ignorance, but isn't this just a bet on falling nominal prices? If HP remains stagnant in £ but inflation runs into double digits, won't your SB margin be wasted sitting still?

Also, IMHO anyone who STR or avoids FTBing despite being in a position to do so is definitely putting their money where their mouth is. I remember reading plenty of STRs on here who have lost money by STRing in, say, 2004.

[Constable]

Nice one, good to see someone willing to put their money where their mouth is!

+1. your entry point looks to be a good one (nicely contrary within the downward trend!). good luck with it - don't be tempted to get out too early.

I use IG too, but I find that the spreads are too wide on most things (esp. shares) to make trading viable (with the exception of indices, metals and oil which is what I limit myself to these days).

Edited September 7, 2010 by Constable

[jonb]

Hi all.

A few months back I started having a play spreadbetting with IG Index. Bored this afternoon I was looking at at all the stuff you can trade on their platform. Then at the bottom I found UK house Prices. So I thought why not.

Took a June 2011 short on UK house prices. Sell 160 (£160000 average price i guess) Limit 140 (£140000 average price) stop 170 (£170000 average price)

Took the minimum which was £10 pip and the spead was 2.8 pips.

So am gambling that UK Average House prices will fall up to 13% within the next 11 months and not rise 6.5%.

Even though I rentered the housing market in March 2009 after going STR in August 2007 I think we are now heading for another drop.

With with the Condem's Austerity cuts, culls in public sector jobs, tightening of the credit markets, the FSA recent annoucment to ban Self Cert mortgages and force lenders not to allow new mortgage approvals based on Interest only without proof of capital repayment system (Just like it was in 96 when I bought my first house) I really can't see any way but down for HPI.

Oh....and HIPS has been scrapped giving rise to a return of 2007 and before practicies of properties being put on the market to "test the water". Rightmove report that there are now more sellers than buyers and as in anything that just sends prices one way.......down.

Anyone else done this in 2007 or this time around?

M

If you put a bet on house prices falling in 2007, you would have lost money, because the house price fall that was priced in was more than what actually happened. The people who bet on house prices rising made money on the bet because although house prices fell, they fell by less than expected.

[markyh]

Forgive my continuing ignorance, but isn't this just a bet on falling nominal prices? If HP remains stagnant in £ but inflation runs into double digits, won't your SB margin be wasted sitting still?

Also, IMHO anyone who STR or avoids FTBing despite being in a position to do so is definitely putting their money where their mouth is. I remember reading plenty of STRs on here who have lost money by STRing in, say, 2004.

I assume it's nominal prices but not sure, but it is based on difference in value +/- of average HPI, not sure which one, LR. Nationwide, Halifax ? I think it may be a combination as it's seems to adjust a few times each month (Always down so far).

For inflation to effect the bet it would have to be based on real house prices (Inflation adjusted) which ATM would lead to bigger drops and give IG Index a problem trying yo hedge both forces (Nominal HPI and Inflation) so It must jsut be based on nomilnal prices.

I should realy call them and ask which figures it's based on.

M

edit. Just called them, It's based on the Halifax Monthly HPI figures so should be in profit after tomorrows release then!

Edited September 7, 2010 by markyh

[evictee]

It's a funny thing but I've found there are hoardes of people on this site who swear blind that a real crash is now happening and that we'll see a pretty steep and deep correction but I'll wager only a very very smal proportion would bet on it.. they'll have al sorts of excuses of course ranigning from can't be bothered to don't understand how it works etc but the bottom line I suspect is that when it comes down to it they don't fancy their chances as much as they said they did.

of course still more might try and insist that they are already betting by being out of the market but bear in mind they might well have been saying the same for years and not have the depsoit cash anyway... equally whats wrong with improving your position with a sure fire bet... this one can't lose can it... I wonder how many will rise to the challenge and actually put a bet on... I won't becasue I think the spread already represents the gradual change I thhink is the most likely outcome.... those who said I am worng can bet against me if they have the balls

As you dismissively allude, not buying a house is already an extremely leveraged position to take on the housing market and one that in many cases people have been forced into against their better judgement, so it's no surprise at all that few would seek to gear up yet more, even if they do predict that the market will indeed move in their favour.

[scottbeard]

It's a funny thing but I've found there are hoardes of people on this site who swear blind that a real crash is now happening and that we'll see a pretty steep and deep correction but I'll wager only a very very smal proportion would bet on it..

I could buy a house now, but I haven't. I'm waiting for the fall.

Isn't that arguably a £200,000 bet on prices falling?

[Fairies Wear Boots]

I think I'm risking my money by staying out of the market.

Also, that bet that was taken out two months ago, has the odds now changed? i.e. that house prices would now have to fall substantially more before you started making a profit?

[sbn]

pretty much repeating what everyone else has said here - I discovered this in late 2008. I ddnt really understand spreadbetting at the time (still dont fully) and am naturally averse to gambling. That said - I got really close to having a punt on a big drop. THANK F I DIDNT!!!

The main thing that stopped me - is, i suspect the same as many on here. I have an amount of money already placed on "black". GOing "all in" with money I dont have would be shtoopid.

[sbn]

pretty much repeating what everyone else has said here - I discovered this in late 2008. I ddnt really understand spreadbetting at the time (still dont fully) and am naturally averse to gambling. That said - I got really close to having a punt on a big drop. THANK F I DIDNT!!!

The main thing that stopped me - is, i suspect the same as many on here. I have an amount of money already placed on "black". Going "all in" with money I dont have (as i believe spreads allow you to do) would be shtoopid.