Brokers with zero spread but pay commission

[EricaS]

Good day

Are there any spread betting brokers that allow you to enter the trade at market price (bid=ask) and pay the spread cost upfront like a commission?
I prefer spread betting for tax purposes.

Thanks

 

[BigDeal]

Spreadbetting is just as the name suggests - it is a bet and will involve a spread. You need to look at non spreadbet CFDs.

 

[EricaS]

Spreadbetting is just as the name suggests - it is a bet and will involve a spread.

Yes. In my case the spread is zero.

You need to look at non spreadbet CFDs.

I want spread betting for the tax savings.

 

[BigDeal]

Yes. In my case the spread is zero.

The spread will never be zero in spreadbetting; it would contradict with what the contracts are.

 

[EricaS]

The spread will never be zero in spreadbetting; it would contradict with what the contracts are.

I don't understand why it can't be a zero spread. I will simply pay that spread cost upfront like a commission when I enter the trade.
I want the zero spread because of my scalping strategy. The spread is getting in the way of me making a better profit.

 

[BigDeal]

I don't understand why it can't be a zero spread

It's because a spreadbet is a category of CFD characterised by a spread around the bid/offer.

 

[chrisstu]

It's because a spreadbet is a category of CFD characterised by a spread around the bid/offer.

Surely the reason spreadbets always have a spread is because the provider must pay a percentage tax on winnings to the government. So it can never be a commission based business model, unlike futures, CFDs, etc.

 

[Visaria]

Surely the reason spreadbets always have a spread is because the provider must pay a percentage tax on winnings to the government. So it can never be a commission based business model, unlike futures, CFDs, etc.

No, they are just companies that pay corporate tax at the end of the year on any profits. Just like other companies.

 

[chrisstu]

No, they are just companies that pay corporate tax at the end of the year on any profits. Just like other companies.

UK companies are charged something called General Betting Duty. For financial spread bets it's 3%. See this document: https://www.gov.uk/guidance/general-betting-duty-pool-betting-duty-and-remote-gaming-duty

So, one can expect that the bid/ask spread charged on a spread bet would be at least 3% greater than the equivalent CFD to compensate the provider for the duty they have to pay to HMRC.

In fact, they can probably get away with charging even more as the person making the bet would likely be prepared to pay more for having the tax advantage versus the CFD.

 

[Visaria]

UK companies are charged something called General Betting Duty. For financial spread bets it's 3%. See this document: https://www.gov.uk/guidance/general-betting-duty-pool-betting-duty-and-remote-gaming-duty

So, one can expect that the bid/ask spread charged on a spread bet would be at least 3% greater than the equivalent CFD to compensate the provider for the duty they have to pay to HMRC.

In fact, they can probably get away with charging even more as the person making the bet would likely be prepared to pay more for having the tax advantage versus the CFD.

Spread betting spreads are pretty much determined by competition. Plenty of SB firms out there.

Your 3% theory doesn't hold any water since CFD prices the same as SB prices.