Thought I'd post this from a recent discussion. It seems to be common knowledge that when trading at more than £10pp, you should go DMA. Has this ever been proven?
Essentially, we have:
- SBing: no tax but spread costs vs
- DMA: 20% CGT + commissions + 10k CGT free.
For swing trading, it probably doesn't matter much, SB is the way for anything except individual stocks.
For the day trader who takes 20pt trades, then I can only see DMA being worth it for the markets that have more than 2pt spreads. (2pts / 20 = 10% commission charge)
Basically, if the spread on your trades is less than 15%-20%, why wouldn't you specifically SB?
Essentially, we have:
- SBing: no tax but spread costs vs
- DMA: 20% CGT + commissions + 10k CGT free.
For swing trading, it probably doesn't matter much, SB is the way for anything except individual stocks.
For the day trader who takes 20pt trades, then I can only see DMA being worth it for the markets that have more than 2pt spreads. (2pts / 20 = 10% commission charge)
Basically, if the spread on your trades is less than 15%-20%, why wouldn't you specifically SB?
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