Futures, CFD, Spreadbet, Physical?!

[Effkay]

Hey Guys,

I have been looking into this for a while now and I was wondering if anyone had an opinion on this, I am looking to do the following:

Hold stocks for a period of 3-6months (maybe more)

This leaves me with the following choices:

1) Buy Physical stocks

• No Leverage
• Have to pay stamp duty
• Brokerage
• Clear prices
• Taxes
• Dividends
• No Interest costs

2) Use CFDs

• Leverage
• No stamp duty
• Brokerage
• Clear prices (mostly)
• Taxes
• Dividends
• Heavy financing cost

3) Spreadbet

• Leverage
• No stamp duty
• No Brokerage
• Messy Prices
• No Taxes
• Dividends
• Heavy financing cost

4) Spreadbet Futures

• Leverage
• No stamp duty
• No Brokerage
• Clear prices (?)
• No Taxes
• No Dividends
• Reduced financing cost

I am currently leaning towards option 4....

All thoughts are appreciated.

Thanks

 

[tomorton]

CFDs - Don't know much about these but I think you will have to pay interest on long positions open overnight, but receive interest on shorts. The two interest rates are not necessarily the same. They seem a clunky strategy devised by the industry for the small investor to be allowed to go short or obtain leverage. Either way its going to cost you.

Holding stocks v spreadbetting - My SB company won't take bets on smallcaps anyway, and the margin on medium caps is painful. Bets on stocks can only be open up to about 6 months into the future. You can SB on indices (or, rather, on the SB firm's market for the same), during and beyond normal market hours for the underlying index.