Recently started trading shares again and currently using an HSBC share trading account.
I’ve been banking with HSBC bank since University, had my current account for over twenty years: yep I’m a loyal customer. Whilst at University I traded penny shares with my student loan (£850) so we could afford to rent a property off Uni, the first mining share I bought (at 4p a share: and can’t for the life of me remember the name of the stock) over doubled in price within a week, so everything worked out great.
Share Trading Risks
Been thinking about trading shares on and off for years, but never got around to it, few weeks back decided to start trading UK shares again and the simplest way to get back into share trading was activate an investment account with HSBC.
I use HSBC online banking and have quite a bit of money with HSBC (so no need to transfer any money to activate an investment account) and the process was all online, though did have to wait a few days for the account to be active.
So my decision to use HSBC was convenience or what others might call laziness :-)
HSBC Online Share Trading Review
HSBC share dealing costs are not the lowest, it’s £12.95 and I’ve seen plenty of UK share trading accounts with a basic rate of £10 per trade and as low as £5 per trade for frequent traders. I have no idea how often I’ll be trading (doubt I’ll be a day trader), but for the sake of £3 a trade I’m not going to jump through hoops. Maybe if I were planning to buy shares in small amounts (few hundred pounds a deal) I’d worry about a few quid, but I’m planning to trade a minimum £5,000 per deal, so a few quid extra isn’t important.
My plan was to start with around £20,000 and see how it goes. This is money we CAN afford to loose, if it goes really badly I won’t be investing further cash, but if it goes well, who knows how much of our savings (that’s currently earning about as much interest as I could find in change down the back of the sofa!) we’ll invest.
HSBC Share Trading Tools
Over the past few weeks I’ve been checking out HSBC’s online trading tools and as I’m not familiar with online trading it’s a little overwhelming. 20 years ago I had the Financial Times, graph paper and Ceefax for tracking shares etc… (I wasn’t even online back then) now there’s dozens of sites with awesome free share trading tools, spoiled for choice.
Despite HSBC trading platform having some nice tools their system SUCKS BIG TIME for one reason, you get logged out after about 5 minutes!!!
I have to login to HSBC Online Banking, which requires entering my secret question followed by using their irritating little pin confirmation thing.
Go to my online banking account, click the Investdirect account link to get access to the trading tools.
If I’m not active for 5 minutes or so I’m logged out and have to repeat the process.
That’s bad enough, but the website relies of sessions which means when you are logged out and log back in again you get a new session and whatever you have already loaded can’t be refreshed, because it’s on an old session: basically if you have half a dozen search windows open and get logged out, trying to refresh the data or move to another part of the HSBC trading site from those windows causes an error message “Your session has been inactive for a long period of time. For security purposes we have logged you out.”!
This means you have to load your research each time you login!
So the HSBC online trading account tools are unusable for anything beyond buying and selling the shares, you couldn’t use HSBC to track a share through the day to decide when best to buy/sell. Will have to find a better trading account long term that doesn’t log you out every 5 minutes. For now I’m using Google (it’s free) for chart tracking and financial news, with the FTSE 100 it’s live data as well.
Buying Shares Online
Bought my first shares quite quickly (I’m not a patient person). Bought 3,000 RBS (Royal Bank of Scotland) shares at £3.03 per share, after costs the trade cost £9,148.46 that’s £9,090 for RBS shares, £12.95 trading fee and £45.51 stamp duty (0.005%).
To break even I need to sell my RBS shares for around £3.05.5 per share. I’d get £9,152.05 at that price. £9,165 for RBS shares, -£12.95 trading fee.
I haven’t set when to sell, if it drops to £2.80 I loose around £750, if it goes to £3.30 I profit around £750. I expect this to be a choppy ride, RBS has had a lot of bad news, but it’s also set to be in profit for the first time since the banking crisis, so hoping for some nice profits medium term.
Google Chart for Royal Bank of Scotland Group plc (LON:RBS)
Bought my second shares. Bought 90,000 International Ferro Metals Limited (LON:IFL) shares at 10.75p each. After costs the trade cost £9,687.95 that’s £9,675 for RBS shares, £12.95 trading fee.
To break even I need to sell my IFL shares for around 10.8p per share. I’d get £9,707.05 at that price. £9,720 for RBS shares, -£12.95 trading fee.
The spread is wider for these penny shares, where the spread on RBS is around 0.2p the spread on these is at least 0.5p, so need a bigger percentage move to make money.
Google Chart for International Ferro Metals Limited (LON:IFL)
Online Share Trading Portfolio
I have an online share trading portfolio, makes me feel all grown up :-)
Very exciting or stressful tracking shares you own: haven’t decided which yet :-)
Interesting HSBC limits my share trades to no more than £10,200 per trade even though I have much more available in my accounts.
David Law
Website - SEO Gold
Sold Shares in Royal Bank of Scotland Group plc (LON:RBS)
Lost my nerve a little early on the Royal Bank of Scotland Group plc (LON:RBS) shares.
Sold all 3,000 at £3.09 for a small profit of £108 (it’s profit).
Few days later there was a rally and they peaked at £3.23 within a week and now they are back down to around the £3.09 range.
Have to say I did not enjoy holding a FTSE 100 share, RBS share prices were not really following what was happening to RBS, but a lot of the fluctuation was FTSE 100 based.
Also the upside isn’t that much, put roughly £9,000 in and if RBS peaked at £3.30 (which could take months or years or never) before I sold it’s less than £1,000 profit.
Think I prefer the much higher risk penny shares. RBS would be fine for a long term safer hold, but I’m looking for big profits, I want my money to double in a year.
David Law
Sold Shares in Royal Bank of Scotland Group plc (LON:RBS)
Buy Shares in International Ferro Metals Limited (LON:IFL)
Have today increased my holding in International Ferro Metals Limited (LON:IFL).
I already owned 90,000 International Ferro Metals Limited (LON:IFL) shares that cost me 10.75p each.
Put an order in for 90,000 more at 10.5p each and got a partial fill of 48,672 shares.
So I now own 138,672 IFL shares worth around £15,000.
Going to have to look into why HSBC is limiting my buys to no more than £10,200 at a time, I wanted to buy 100,000 shares in IFL which goes over the £10,200 limit.
I bought more IFL shares because China is having problems with Ferrochrome production which makes South Africa (where IFL is located) potentially more profitable in the long term: assuming China doesn’t go protectionist!
What I like about penny shares is the market doesn’t move nearly as fast as with the FTSE 100 shares. Been tracking various penny shares and news that would have a FTSE 100 share jumping in under an hour takes days with penny shares. Gives smaller investors an opportunity to get in early.
I made the decision to buy more International Ferro Metals Limited shares one hour after this was published: http://af.reuters.com/article/investingNews/idAFKBN0CV07O20140409 (not the only reason to buy more).
I’ve no idea what price IFL will move to in the future, hoping for above 20 if they publish good results in June. If the price remains at 10.5p tomorrow might go for another £5K worth to use my full £20K I’m willing to loose trying out share trading.
David Law
Buy Shares in International Ferro Metals Limited (LON:IFL)
IFL
Was hoping for the best for you on IFL as I read through this… but then jumped on to google and saw it at 0.9. Sorry for your loss.. but then I guess thats the nature of the game with Penny stalks – you can make multifold or lose multifold.
RBS in the meantime seems to have gone upto to 4 mid 2015 to come back to 3 now.. so a 30% profit missed.
Damn this equity investment business – all so damn confusing.
Hope you’ve had better luck with your other investments.
IFL
bad luck dave !
Just read this article ! gutted for you ! maybr you should buy £2000 of shares in IFL and leave for a year or so ! even if it went to 5p you would get half your 20k back !
Only Invest what you an Afford to Loose
That’s the risk in investing in stocks, which is why I only invest what we can afford to loose in full.
Generally speaking not a good idea to throw good money after bad, better to draw a line under a bad investment and move on rather than worry about trying to make it up. That’s how you loose more money.
David