Sally with her dog Dow Jones on Primrose Hill |
My life of betting on the Dow Jones stakes
Writer Sally Nicoll became a wised-up realist thanks to her experiences of online spread betting, writes Peter Gruner
Bets and the City, a spread betting diary by Sally Nicolls, Harriman House, £9.99. order this book
HAVING completed Primrose Hill writer Sally Nicoll’s compelling book about spread betting I am no nearer to understanding how it works. So I won’t be packing in the day job just yet.
That’s probably just as well because if my luck with the horses is anything to go by I’d lose more than my shirt on the stock market. It would probably be an entire wardrobe.
But that says more about my lack of financial knowledge than Sally’s powers of explanation, because the book Bets and the City is entertainingly written with the airy headed novice in mind.
For the novice’s information, according to one definition, spread betting is gambling on the movement of stock price in relation to a given range of high and low values.
If the price moves outside the values on a given day, the bettor wins a multiple of the original stake times the number of points above or below the set range. Or something like that.
Anyone with a broadband connection and a few hundred pounds apparently can gatecrash the elite world of City traders even if, like Sally, they are not good with figures.
She explains how her dad taught her the rudiments of spread betting when she was a child playing pin ball. “Dad said if I scored more than 1,000 points on the pinball machine, he’ll give me 50p and another glass of Tizer. But if I got less than 500, I’d lose 10p from my pocket money.”
She describes how she approached the markets with magnificently misplaced optimism. “And made sure not to tell my financial adviser or my big brother what I was doing, as they’d only have stopped me.”
Like horse racing, where you can bet to win or lose, spread betting allows you to gamble on sports to win or lose or on the stock exchange to go up or down.
The difference is that if you put a fiver on a horse, that’s all you lose. With spread betting you can lose huge amounts even with a small investment.
Sally describes her book as “Bridget Jones meets Wall Street” and her style is refreshingly whimsical and light for a subject that is all about the machinations of stocks and shares.
Written as a diary, it includes various characters from around Hampstead, who she has nicknamed Much Married Michael and Retired Reggie. They try and talk her out of spread betting, calling it the rocky road to ruin.
There’s also her occasional Italian boyfriend Filthy Lucca and her dog Dow Jones.
The diary begins as Sally is looking for a source of extra cash to fund a sabbatical, while she writes a novel. Coming from a gambling family she decides spread betting is the answer.
Sally tries to open an account with an online spread-betting firm – their web site has the best colour scheme – only to discover she’s been credit blacklisted.
Instead of being thankful for divine intervention, she complains to the marketing department and is hired to write an online trading diary.
The book is based on Sally’s real-life popular column for online spread betting firm Finspreads.
Initially, she appeared to do well and even won £80 by predicting approximately how many seats Labour would lose at the last General Election.
But then comes her first major disaster. She’d banked on a bad time for builders but instead the market was starting to rise. She logged on to her account and couldn’t believe her eyes. “There was a minus sign next to £1,463. “Be calm Sally. Deep breaths,” she tells herself.
Then comes an even bigger financial setback.
“Sell in May and Go Away” she says. “If only I had followed the old market cliché. Instead, I squandered far too much of my inheritance from Great Uncle Gareth. “When the markets began to take a dive, during the second week of the month, I carried on buying. Big mistake.” She loses almost all of her initial investment, £4,000.
You have got to pay attention to detail with spread betting. She describes it as rather like the Japanese toy the Tamagotchi. “It was the world’s first virtual reality pet,” she says. “A sophisticated toy that died of neglect unless you kept it fed, watered, nurtured and entertained.”
When she joins a course in spread betting to try and improve her technique she meets Big John, a self styled guru on the subject, who gives her the spiel.
“I used to bet on the horses,” he tells her. “And then I discovered that every afternoon at 2.30pm sharp, there’s this race that takes place in America.
It’s called the Dow Jones Stakes and it runs for six-and-a-half hours. Basically, it’s a two horse race, and you can bet to win, or if you think there’s going to be a slip-up, you can bet to lose.
“You don’t have to put your money on before the race begins. In fact, you can wait until one side’s well ahead and then make up your mind.
“Oh, and you can claim your winnings any time you happen to be ahead. I can’t remember the last time I backed a horse.”
Sally emphasises that hers is not a “get-rich-quick” scheme. Indeed, based on some of her experiences it is more like get poor slowly.
“I lost a lot of money,” she admits. “But I am eternally optimistic and I still hope to become rich.
“My spread betting adventures have taken me – so far – from naive optimist to hardened pessimist, and I’m now in the process of becoming a wised-up realist.”
|
