new_trader
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Errr...£20/point isn't really a big stake is it? If you spread bet the S&P500 with IG index the minimum is £10/point. I think you need to be more specific about the instrument and the S/B company. Some talk in terms of 'ticks' and some talk in terms of 'points'.
Okay. One question regards dealer fills - where you are not automatically filled, but orders must be approved by a dealer first due to their size. Has anyone experienced this? and how does this impact your trading? On what position size does this usually begin to occur? Is there a point that your position size begins to hinder your performance?
Thanks
A Dashing Blade
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Which is still the equivilent of only a couple of futures contracts.
Nontheless, you should be looking at Futuresbetting.com
Yes, I know it is not very large, but I am talking above these levels, say 100-200 for example.
I have recently opened an account with futuresbetting, had a good chat with them, their business model sounds interesting.
Do you find the fact profits from SB are tax-free an adaquate trade-off to the spreads?
rawrschach
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Depends how long you are going to hold positions for.
jiggly
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yes, you are right, the longer you hold a position for the less commissions and spread will be, percentage wise to your gains/losses.
but in my experiences, and the reasons why I dont trade with SB companies is that whatever they tout tax free they claw back from you from the spreads they set. so it essentiall defeats the purpose of getting round the tax, its just taxing another way.
someone may prove me wrong and I would be interested to know of a SB company otherwise as I would like to trade tax free, but instead of paying your tax and NI contributions to the government you pay it to the SB company instead, the only difference is that in the former your money gets contributed to something for you in the longer term, in the latter, you are contributing to the SB company.
there is always a tax, somewhere.
Say scalping single waves of 50-100 ticks? Holding generally 15 mins to 3-4 hours depending on how fast things are moving.
A Dashing Blade
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Yes.
Do you think the fact that they are direct access onto the exchanges rather than making a market against you a good or a bad thing?
If you're spread betting in futures equivilant sizes in the market they cover you'd be a fool not to use them.
jiggly
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in my expereinces, no, the trade off is not worth while, the likelyhood that you make any profit over the longer term with an SB to derive benefit from the 'tax-free' tout is doubtfull.
for instance, I have found spreads to be wider, and in some cases, they charge a fixed commission as well, this can have a major impact on your probability of success for a start, so if you are not losing money you are being taxed by them instead. actually its both.
jiggly
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your transaction costs will be very high, what are you thinking fo trading? tell us what the spread is with the SB company? do they also charge a fixed commission? is it per round trip?
we can do some simple calculations to derive the exact answer of transaction costs,
So the loser is the taxman?
Surely purely from a profit perspective it is only worthwhile going direct market if the spreads exceed the level of tax you would pay on the profit, I.E. the spread (from winning and losing trades) is exceeding 30% of your overall profits?
I like your point that ultimately money is going to the spreadbet company and not the taxman, hence invested in some CEO's backpocket as opposed to our society, but this is taking the conversation on a bit.
jiggly
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sure, refer to my last post and we can do some calculations, we can be precise with this.
but if the transaction costs are less, which in all fairness they may be, dont foget that your stops will be much wider, your Risk vs Reward become seriously scewed, the probability over the long term of being a consistent winner is seriously reduced,
so you may save say 50% ov your tax, but it is no good if you also reduce the probability of your RvsR and overall success by 50% either. we have to take into consideration some intangibles.
post some numbers and we can do the math.
Thanks 10k/dashing/jiggly for the comments thus far.
You have found spreads to be wider, and fixed commissions added? Is this when upping the stakes/profits with SB companies? Can you name and shame any?
You have found spreads to be wider, and fixed commissions added? Is this when upping the stakes/profits with SB companies? Can you name and shame any?
Well you made the comment spreads were widened and commissions added; presumably above and beyond what you were experiencing when using smaller stakes and what you originally were comfortable with when you began business with them. I would not class that as "perfectly ethical".
I do question sometime whether these issues are as bad as made out to be, or whether they are just being made by novice traders who have gotten a little overheated when their good fortune has ran out? You rarely see a successful spreadbettor moaning about wide spreads, commissions, re-quotes, delays etc etc.. I experience a little of these things too at times, but to me missing 2-3 ticks or a 200 tick move is quite neglible, though I appreciate it can add up.
This is not directed towards yourself by the way. But rather the anti-spreadbetting lynch-mob that seem to blame the whole of lifes problems on the fact they took a requote once.
