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Wednesday, August 11, 1999 Published at 15:16 GMT 16:16 UK

Business: Your Money

Day trading comes to the UK

Day traders aim to compete with the professionals

The largest US day-trading firm plans to open a branch in the UK later this year, allowing individual investors to buy and sell stocks on a daily basis.

Momentum Securities plans to work with Clive Cooke, who intends to leave his post of chief executive of UK wholesale broker Intercapital's US operations to set up the business.

Intercapital's Clive Cooke defends day trading
The day-trading industry provides facilities for investors who want to trade stocks for their own account. Day traders differ from amateur online traders, who total 7.5m in the US, in that they have access to the same facilities that professional traders have.

In the US, the industry has come under fire for stressing the potential gains - but not the pitfalls - of this kind of trading, and a recent report found that only a small proportion of day traders made money.

Untested market

While day trading boasts between 4,000 and 5,000 practitioners in the US, it is unclear how popular it will prove in the UK.

Industry experts say individual trading costs more in the UK than in the US and this will deter customers.

Danny Bowers at Moneyworld:"Day traders are gamblers"
If an investor buys £1000 worth of shares in the US, it costs £50, Danny Bowers at estimated. In the UK, the cost is doubled, a fact he attributed to stamp duty of 0.5%, tax and brokerage fees.

'In reality, the day-trading phenomenon is unlikely to come to Britain,' Bowers said.

News of Momentum's plans for the UK follows the publication on Tuesday of a report damning the practice in the US.

The report by the North American Securities Administrators Association said advertising exaggerated potential gains, the companies failed to disclose fully the risks, and screening of customers for suitability was lax.

The practice of day trading was thrust into the spotlight two weeks ago when Mark Barton shot and killed nine people at two day-trading firms in Atlanta where he had lost money.

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