Longer term trading + leverage

SanMiguel

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Is there any point trading longer term (say 6-12 months) on leverage?
If a spread bet company charges 2 pips and you make 100-200pips from the trade then that is around 1-2% in commissions, which is not so bad.
However, longer term traders will be charged a carry over per day, which is typically 50% of the initial spread so 1 pip per day in this case.
If we take EU as an example and you went short AUgust last year and are still short now, that's around 2000 pips profit but you will have paid almost 365pips in commissions during that time (1 pip x 365 days), that's around 18% commissions (most of it hidden as you don;t realise the daily effect). Of course, it depends on actual targets but many long term traders might only be looking for 1 or 2 big figure movements.
How else do you get the leverage to trade long term without these massive daily rollovers? I've seen some FX futures contracts but most brokers do not offer them.
 
No, the interest on overnight longs will outweigh the stamp duty (UK) holding that long as you say.
Best to just use leverage for short term trading.
 
No, the interest on overnight longs will outweigh the stamp duty (UK) holding that long as you say.
Best to just use leverage for short term trading.

No stamp duty on SB.
FX futures wouldn;t have overnight interest either but don;t know any decent FX futures SBers?
 
No I meant the UK stamp duty paid on buying the shares yourself, compared to the interest paid on overnight longs with CFD's for instance. I didn't make that clear in my reply.

TBH though, long term leverage implies large gain, flipside is large loss or stops that are too tight.
Long term leverage isn't for me for that reason.
 
I use Interactive Brokers to trade FX futures. The spreads are good (e.g. 2 pips in GBP/USD) and there is no roll charge, only the initial commission (which is low anyway).

Funnily enough, I did start my medium term trend system on IG and kept a record of the roll charge I was paying (they charge 0.0055 pct/day - please note, this has NOTHING to do with interest rate differential, that is something else completely). After about three months or so I had "spent" £5k on this pointless roll charge. It was at this point I decided to start trading futures.

(The only spreadbet company I am aware of that offers futures DMA is ProSpreads, however I have never used them so cannot vouch for their worth or otherwise.)
 
As far as I am aware there is an Sb company called Smart Live Markets that do not charge for the daly rollover.
 
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