Longterm income

[shadowninja]

With all this talk of shutting down accounts, going to manual, etc, is it actually possible to make longterm income by spreadbetting (assuming annual target of around £20-30k profit)?

 

[lurkerlurker]

With all this talk of shutting down accounts, going to manual, etc, is it actually possible to make longterm income by spreadbetting (assuming annual target of around £20-30k profit)?

Erm, I made a fraction of that with Capital Spreads and was placed on refer to dealer. That ordinarily wouldn't be a problem, except their dealers were so busy that orders took too long to get filled, and they only filled orders when the price went against me, rejecting winning trades on an invalid price. See CS thread for more details. This only started happening when I made money with them. I do understand the markets have been volatile of late, but I have limited sympathy when the firm choose to drastically reduce the quality of service provided by putting my account on dealer intervention at a time when they know their dealers are very busy.

Once you are comfortable with trading a full lot size, I think it is best to go to direct access. The tax situation isn't ideal, but you can offset losses and also there are fewer incentives for your broker to try and screw you.

I think perhaps if you are to use SB to take very long term positions at reasonable sizes they are less inclined to have a problem with you. In my experience, SB companies do not like withdrawals, frequent traders, winners, or "scalpers". I am fairly sure that most would define "scalping" as trading on a lagging price, but it seems that you can irritate them and have them put you on manual fills when trading regularly, even if every trade you make is at a fair price.

Also, I think to make £20k year on year you would really need an account of around £30k or more, depending on how you trade and your risk tolerance. Better traders than I would say you need more than that. I don't think it is wise to spreadbet with that amount.

 

[shadowninja]

Hm. That sounds frustrating. My target is £20k but I am going slowly. The temptation to dump a huge amount of cash in the account is there but I know it will end in tears.

 

[anley]

Ninja, get nice and profitable first and then start to worry, not the other way around.

But if you are profitable and they do close you down then it really isn't a problem because if you can make money from spread betting you'll easily be able to make money from playing the markets in general, CFDs, FX, cash shares, futures etc - and don't worry about the tax because it's often more profitable to pay tax and deal on proper exhanges.

Plus, if your main income is from tax-free spread betting the taxman is going to want his cut as many professional gamblers have found out. There are always 2 laws when it comes to tax, the official one an the one laid down in certain circumstances by the taxman and his laws always overides the official ones. In effect he can move the goalposts at will.

Good luck anyway.

 

[shadowninja]

Thanks. Life, eh!