Leverage is it tax free or ...???

[Spread-Bettor]

Hey fellow traders;

Everyone of us chooses spread betting for own reasons, some like this type of investment for tax free reasons, some of us prefers it cuz of the leverage feature while some others just take it as an adventure as it doesn't require too much capital!

As far as I'm concerned, Leverage is arguably the most central feature of spread betting, and the one highlight that makes it so popular. Because markets can move by a wide range of points over the space of a day, immediate returns can run into the hundreds of percent, and despite the comparatively massive risk profile, these rewards are still hard to beat elsewhere :smart:

So what's yours?

Looking forward to your replies

 

[timsk]

. . . immediate returns can run into the hundreds of percent, and despite the comparatively massive risk profile, these rewards are still hard to beat elsewhere . . .

Hi Spread-Bettor,
I would say the biggest attraction of spread betting is it's simplicity. It's quick and easy to learn the principles and, from a single account, a trader can access a wide variety of markets. This is a useful feature for newbies who haven't yet decided which market to focus on. The other big attraction is being able to trade a demo account in most cases before going live and, just as importantly, being able to trade very small size when making the transition from paper trading to live trading. So, if you're an aspiring futures trader, you can practice on the ES at £0.50p per point, instead of risking $12.50 per point with a DMA futures broker.

IMO, the above are good reasons for considering the spread betting option. Conversely, I would say that 99%+ of 'traders' who open spread betting accounts to access the leverage required to make returns of 'hundreds of percent' in no time at all, will wish they'd never bothered, as they'll almost certainly lose their money. The tiny fraction who walk away with a profit will do so as a result of pure luck and not trading skill.
Tim.

 

[Spread-Bettor]

I would say the biggest attraction of spread betting is it's simplicity. It's quick and easy to learn the principles and, from a single account, a trader can access a wide variety of markets. This is a useful feature for newbies who haven't yet decided which market to focus on.

Of course nobody can dispute the simplicity of spread betting but that's what make so many newbies get burnt quickly thinking they can found a way to get rich over-night! To be a winner you still need to have an edge, be in tune with the markets, understand the risks rewards and odds of your methods and most important be in control (emotions, psychology...)

The other big attraction is being able to trade a demo account in most cases before going live

Now we're talking, personally I would never advise anyone to use the demo account for learning purposes, it just misguides newbies, I would rather choose a SB broker that offers low stakes such as IG Index where you can trade some markets with 10p per point! I would only suggest to ue the demo in case you want to try out a new strategy or check out the platform of a new broker.

Thanks Tim

Regards

 

[jkane]

IG Index is not the place to learn with small capital

use cfds that offer 10 cent per tick..plenty with Meta Trader

 

[Spread-Bettor]

IG Index is not the place to learn with small capital

use cfds that offer 10 cent per tick..plenty with Meta Trader

I think it is always advisable for a newbie to start out with Spread Betting rather than CFDs

 

[gle101]

I think it is always advisable for a newbie to start out with Spread Betting rather than CFDs

Both SB and CFDs losses are tax deductible in Sweden, but only CFDs in UK as I understand it. If CFDs is tax deductible for private individuals in the UK, it might be better to start with CFDs. The first couple of years getting some of the losses back is not a bad thing.

 

[Spread-Bettor]

Both SB and CFDs losses are tax deductible in Sweden, but only CFDs in UK as I understand it. If CFDs is tax deductible for private individuals in the UK, it might be better to start with CFDs. The first couple of years getting some of the losses back is not a bad thing.

I don't quite get the point here
How is it better to start with CFDs when you don't have to pay taxes in other alternatives?
By the way you only exempt from paying stamp duty when trading CFDs, you still pay CGT. Thanks gle

 

[gle101]

I don't quite get the point here
How is it better to start with CFDs when you don't have to pay taxes in other alternatives?
By the way you only exempt from paying stamp duty when trading CFDs, you still pay CGT. Thanks gle

A newbie (could apply for experience traders as well) will for sure lose a lot of money the first couple of years. So by deducting losses from income you pay less tax, so it makes it hurt less as one will get some back. At least that is possible by private individuals in Sweden (up to 75% losses).

 

[Spread-Bettor]

A newbie (could apply for experience traders as well) will for sure lose a lot of money the first couple of years. So by deducting losses from income you pay less tax, so it makes it hurt less as one will get some back. At least that is possible by private individuals in Sweden (up to 75% losses).

Thanks gle, this makes sense, do you trade CFDs yourself, and if it's the case, who do you trade with?

Thanks again and have a good weekend ahead not as cloudy as the one we have here in london

 

[gle101]

Thanks gle, this makes sense, do you trade CFDs yourself, and if it's the case, who do you trade with?

Thanks again and have a good weekend ahead not as cloudy as the one we have here in london

Yes I trade CFDs. I will send you a PM on it.

Yes the weather here in Sweden is really nice at the moment.

Same to you, have a nice weekend.

 

[luckystrike23]

Pros and Cons of spread betting in detail:

http://www.financial-spread-betting...isadvantages-of-financial-spread-betting.html