I'm half way there.. few questions remain :)

[dewbpy]

Hello

I've been floating about, researching, paper trading, dabbling in a few stocks trying to find my feet. I think I'm nearly there now but have a few specific questions.

Just so you know my circumstances - I only plan to trade in my free time in the evenings (so US stocks have taken an appeal)
I also have a relatively small amount to play with (£2000) to begin with (so spread betting appeals in that sense).

What my current plan is to spread bet on US stocks - either IG Index or Finspreads (I have an account with both). Now my first question is should I bet on the futures or the daily/rolling stock? The aspect I'm not too sure about is the daily/rolling part of the bet and how it exactly works. Do I just start the bet and close it when I'm ready or do I lose abit in the spread when it's rolled over each day (are the rolling/daily bets meant to be a intra-day type bet?) - I've read the help docs for IG and Finspreads but it didn't seem clear cut.

Or do I go the futures way - my main concerns with futures from what I've read is that the SB company makes up the futures price, so it might not move with the stock. I'm looking to have a bet open for no longer than 10 days so I thought the future might not move in relation to the real stock price.

Hopefully I've made myself clear, if not let me know!
Any advice appreciated!

Thanks

Simon

 

[Simon]

Wasn't aware that futures were offered in individual stocks through SBs, are you perhaps confusing them with indices. Apologies if I'm incorrect.

On another issue, I hope you're not proposing 'daytrading' the US in the evening, the spread, bias, etc., especially on US stocks, will make this almost impossible for you. Over a longer period, many of the advantages of trading the US will level out when compared to the UK markets & by trading the UK you will eliminate any currency risk that you may not yet be able to hedge satisfactorily.

 

[Simon]

I'm looking to have a bet open for no longer than 10 days

Apologies.

 

[dewbpy]

Wasn't aware that futures were offered in individual stocks through SBs, are you perhaps confusing them with indices. Apologies if I'm incorrect.

On another issue, I hope you're not proposing 'daytrading' the US in the evening, the spread, bias, etc., especially on US stocks, will make this almost impossible for you. Over a longer period, many of the advantages of trading the US will level out when compared to the UK markets & by trading the UK you will eliminate any currency risk that you may not yet be able to hedge satisfactorily.

Yes, both IG and finspreads have futures on individual stocks. Although it seems the price is set by the SB company so they can always move it to benefit themselves abit?

Also, as I will be betting on the US stocks via the UK SB company I won't need to worry about converting money.

So, does my tactic seem acceptable?

Simon

 

[Simon]

I would imagine the futures price is based on that for the relevant single stock future (SSF), however, aside from hedging purposes, I am not aware of any benefit to using these as opposed to cash, unless you are looking to spread trade or exploit pricing discepancies.

I personally think you should keep it simple & stick to the actual 'cash' prices, remember we are not talking about indices here, where there is no true 'cash' product, but a stock that can be purchased or for which you can purchase a derivative based closely on it's current price (eg. spreadbet, CFD).

With regards to the FX issue, I am sure that D4F used to make an adjustment for the applicable exchange rate, but I could be wrong & have no experience of IG or Fins.