Best platform for long term investments.

tequaz · Jan 13, 2008

Hi,

What is the best platform in your opinions for the long term investments? I don't have to much free money and I look for platform which:

1) Gives me ability to bet very low stakes (even under 1 pound).
2) Does not charge me for rollovers.

Do You think Spread betting is good for long term investments? I mean I don't want to win thousands in one week. I want to invest in poducts with clear trend for couple of months or maybe a year.

Do You think Spreadbetting is better then CFDs in long term investments?

Thanks,

shadowninja · Jan 13, 2008

The only problem with doing this is setting an appropriate stop loss and getting in at the right time. Otherwise, spreadbetting can work.

GMP · Jan 14, 2008

tequaz said:
Hi,

What is the best platform in your opinions for the long term investments? I don't have to much free money and I look for platform which:

1) Gives me ability to bet very low stakes (even under 1 pound).
2) Does not charge me for rollovers.

Do You think Spread betting is good for long term investments? I mean I don't want to win thousands in one week. I want to invest in poducts with clear trend for couple of months or maybe a year.

Do You think Spreadbetting is better then CFDs in long term investments?

Thanks,

You'd have to use the quarterly prices for longterm bets, in which case you have to judge the market better than the SB firm to make any money. Rollover fees vary but I don't know of anyone who doesn't charge them at all (though I'm not sure if quarterlies can be rolled over or not, having never tried it).
I think CapitalSpreads offer pretty low prices (£1 per unit on most popular markets) but there's folk more qualified than me to pass comment on this.

tequaz · Jan 15, 2008

And which platform gives you ability to play with the minimm risk - lowest bets or low leverage?

GMP · Jan 15, 2008

tequaz said:
And which platform gives you ability to play with the minimm risk - lowest bets or low leverage?

I'd say risk level depends on your stops and the success rate of your trading system, rather than the platform you employ. I imagine if you're starting out with limited capital, SB is probably the easiest option, but I'm no real expert so I'll shut up and hope someone else answers!

tequaz · Jan 15, 2008

GMP said:
I'd say risk level depends on your stops and the success rate of your trading system, rather than the platform you employ. I imagine if you're starting out with limited capital, SB is probably the easiest option, but I'm no real expert so I'll shut up and hope someone else answers!

I believe that risk level depends much on minimal bet rate. I can setup much wider stop limit with minimal bet = 0,01$ per point. If trend will work for me I will not care about small changes of price. With minimum bet 1$ per point I must setup very risky stop limits and market can easily kick me out from it. I should have 100 times more money to play on minimum bet = 1$ on the same risk level.

Hoggums · Jan 15, 2008

tequaz said:
Hi,

What is the best platform in your opinions for the long term investments? I don't have to much free money and I look for platform which:

1) Gives me ability to bet very low stakes (even under 1 pound).
2) Does not charge me for rollovers.

Do You think Spread betting is good for long term investments? I mean I don't want to win thousands in one week. I want to invest in poducts with clear trend for couple of months or maybe a year.

Do You think Spreadbetting is better then CFDs in long term investments?

Thanks,

As long term investments leveraged products are not a good solution.

For instance - if you use the FTSE rolling daily on CS then you'll pay about 7% a year interest on your leveraged position. This means that the FTSE has to go up 7% before you've even earned a penny in a years time.

Trading the futures will save you money as the interest rate is charged at the current base rate - but you need to be confident you're going to make more than the base rate over the year.

You also need to have enough money in the account to cover any margin required that may be caused by a slump in the market. e.g. if the FTSE drops 20% from your entry but ends the year 15% above your entry - you need to have enough in your account to make sure you don't get stopped or margin called along the way.

tequaz · Jan 15, 2008

Hoggums said:
As long term investments leveraged products are not a good solution.

For instance - if you use the FTSE rolling daily on CS then you'll pay about 7% a year interest on your leveraged position. This means that the FTSE has to go up 7% before you've even earned a penny in a years time.

Trading the futures will save you money as the interest rate is charged at the current base rate - but you need to be confident you're going to make more than the base rate over the year.

You also need to have enough money in the account to cover any margin required that may be caused by a slump in the market. e.g. if the FTSE drops 20% from your entry but ends the year 15% above your entry - you need to have enough in your account to make sure you don't get stopped or margin called along the way.

Thanks,

Is it possible to invest in futures small money? In other words can I buy or sell with my 1$ not 100 000 $ but 100$?

Regards,

Bagehot · Jan 16, 2008

Assuming you are talking about equities, then spreadbets can work, but are not ideal for long term investing: the cost of financing (leverage) is relatively high, the pricing of dividends can be inefficient, and the spread can be high. Against this you save stamp duty (on UK stocks), and commissions. If you're dealing with small sums then the CGT-free element is largely irrelevant as you'll come nowhere near the tax-free allowance. Personally I'd look at finding a good on-line broker.

To answer your second question on futures: no. The smallest unit is 1 future, they are not divisible, so 1 FTSE future gives you about £60k of market exposure (ie FTSE level*10).

theroguetrader · Jan 16, 2008

Bagehot said:
Assuming you are talking about equities, then spreadbets can work, but are not ideal for long term investing: the cost of financing (leverage) is relatively high, the pricing of dividends can be inefficient, and the spread can be high. Against this you save stamp duty (on UK stocks), and commissions. If you're dealing with small sums then the CGT-free element is largely irrelevant as you'll come nowhere near the tax-free allowance. Personally I'd look at finding a good on-line broker.

To answer your second question on futures: no. The smallest unit is 1 future, they are not divisible, so 1 FTSE future gives you about £60k of market exposure (ie FTSE level*10).

You can trade mini contracts on most instruments - tick size and tick value are the important things to keep an eye on -
Until your " COMFORTABLE " handling bigger leverage - just spreadbet in small increments up to the value of one full contract -
if your not sure what your doing, a seemingly innocent 10 quid trade (1 full contract) can leave you with a big black hole - !!
CFDs / spreads arent the vehicles for long term inv - if your overly paranoid about your tax position you could use them, but by the time youve rolled the contracts round the calender - it just wouldnt be worth it... !!

Best platform for long term investments.

tequaz

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shadowninja

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GMP

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tequaz

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GMP

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tequaz

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tequaz

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