Long Term Leveraged Indexes

ihateregistering

Junior member
12 0
Hi All

I dont know if this is the right place, but I'd like to hear any advice. I dont want to trade as such I would just like to buy shares on margin.

I have 100k worth of equities, I'd like to borrow 100k more over a 5+ year time scale. I figure I can swap 20k into CFDs or futures I need advice on which and with who.

Are futures the most efficient? Am I right in thinking they have a smaller initial margin, lower charges and probably lower funding cost. Problem is my annual volume is going to be in single figures. Are there any brokers that would be interested?

Am I right in ignoring CFDs? Which brokers have the lowest funding rates? Most seem to charge libor + 2.5%.

Also I guess I have to roll positions every quarter. I've heard of rolling cfds, but details are vague and I dont think they're designed for holding positions for years.

Thanks for any info. I've looked at so many websites I'm going blind!
 

stevet

Established member
917 5
if you own 100K of equities? and paid cash for them at full value - i am sure whoever you bought fhem from will be real keen to help you out further

but if you are not an experienced trader and you are looking to hold UK stocks for 5+ years - you may as well just buy liffe ftse futures contracts - the stocks are only going to go up and down with the ftse anyway - liffe recomend brokers on the liffe site - you'll pay top dollar for the brokeage - but as you are going to amortise the cost over each contract period - it shoud not hurt too much

forget CFDs - as for that time scale you would then also be betting that the CFD company would still be around to pay you back

you are going to get the best leverage on futures contracts - but you will have to anti up for margin calls if and when the market turns against you

though at rollover time - you may well find your account is in credit

p.s. the target for the FTSE is 2500 - but dont let that put you off!
 

ihateregistering

Junior member
12 0
stevet said:
but if you are not an experienced trader and you are looking to hold UK stocks for 5+ years - you may as well just buy liffe ftse futures contracts - the stocks are only going to go up and

p.s. the target for the FTSE is 2500 - but dont let that put you off!

Thanks for your reply. Looks as if this is what I'll be doing. Probably look at spread betting instead of futures as the contracts aren't as big and CGT can be avoided. People have said the prices are crap, but I think the indices aren't that bad, I really don't care about a few ticks each way.

As for FTSE at 2500. I am a bit worried about what the S&P500 6m chart looks like, I'm going to see how things play out over the rest of the summer. I can't see this happening, but am prepared for it. I guess I'll be taking your money. :)

Thanks again.
 

stevet

Established member
917 5
again - if you put your money with spread betting companies - you are betting on the direction of the markets and also that the company will be around to pay you if the miracle happens and you are in profit

dont worry about taking my money - i dont trade the UK -but i can pretty much guarantee that if you reckon you can read charts - and put long term bets on - that you are 100% guaranteed to lose your money!

all the best
 
 
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