NASDAQ trading in the UK

[Newtron Bomb]

You can make money from cfd's day trading but you maximise the efficiency of the trades with DAT.

My point was to try to highlight that you can trade successfully if you not only understand how to trade but also the instrument that you are trading with.

A suitable analogy would be that i have a standard driving license but i would be absolutely useless for racing in a formula one car at the Monaco grand prix unless i had suitable training and understanding of driving at a higher standard.

HTH
NB

 

[jsd]

I think the tax problems are applicable when you draw the money into your country of residence, depends if you need to withdraw from your trading account, but if you can get trader status via the tax office of your own country they you may if the law is like the uk, be able to offset any trading losses against other earned income, its a very grey area, but some people manage to get the status and others do not, you may think yourself as a trader but some sneaky tax bods do their best to tell you differently. ie if you only trade the back end of the market and have a job etc, you might have nothing to loose LITERALLY if you can get trader status and offset losses (should they arise) against your JOB tax.

jd

 

[jsd]

ohh of course doesn't apply if you spreadbet, because thats betting and betting losses cannot be offset, only exchange traded derivatives.

jd

 

[stevet]

Newtron Bomb

i get the driving licence concept - but trying to figure it out relative to direct access and cfds

fortunaly in trading there are only two licenses - the winning or the losing licence

i dont trade cfds and never looked at them as you cant get api connections on cfd platforms to directly access the data

but as some on here seem to use them - and others seemed to indicate the spread was wider - i cant see the point to use cfds unless some aberation in the pricing gives a profit opportunity ( arb or whatever) which direct access does not offer

if the spread is just wider around the mid of the direct access - then its just giving the cfd company a nice present

 

[wysinawyg]

Trading CFDs of US shares does avoid the uptick rule AFAIK so is a minor benefit for trading shares (although I'm not sure how a CFD provider would deal with not being able to hedge in the market).

wysi

 

[jitasb]

Thanks for the info....might do some more digging around...

I'd previously assumed that CFDs would have the same tight spread as the underlying share, hence their advantage over spreadbets. (But you would pay commission on CFDs.)

So is Direct Access (e.g via IB) better with the spreads ? and better with commission ? than CFDs ...and you are effectively buying the actual shares (so you would get dividends etc), assuming you held them for that long ?

Do you guys who trade US stocks also trade UK stocks ? and if so then do you say use IB for the USA and a CFD provider for UK ? or do you use one method for all ??

Hope these questions aren't becoming too boring...might be going over old ground I daresay...

Ta...

 

[stevet]

wysinawyg

yep - very very good point about the uptick rule

but perhaps on the US market - the uptick rule applies for cfds since they mirror the main market

 

[ChartMan]

The other point to this debate is capital. You need far less trading capital when daytrading via CFD's compared to DAT. BIG difference. For some, there is no choice. Trade via a CFD account, or don't trade. There is no case to answer that DAT is not cost effective over CFD's.

 

[jitasb]

Very good point about capital Mr CM....

 

[Mr. Charts]

Newbies reading this thread - and others - should be aware that some statements are simply factually wrong

eg
"the uptick rule applies for cfds since they mirror the main market"

is utterly and completely wrong.

There are many instances of this sort of ill-informed "opinion".

Beware - always check the facts for yourselves - and never take the word of anybody else because you think they "ought to know" or "sound" experienced or knowledgeable.

 

[bonsai]

lol

 

[stevet]

Mr Charts

whilst i realise that you are only on T2W to market to the learners who wont be aware of how to evaluate your trading capablilities - i am sure that learners are better at reading than yourself

the statement i made was in relation to "wysinawyg" comment that cfds might offer the opportunity to avoid the uptick rule - i told him that was a real good point - but that perhaps - the uptick rule does apply on the US markets with cfds

"!perhaps" means its a point needing clarification by anyone who knows

i dont use cfds as i dont see the point to lose on the spread as execution costs are key in trading - unless cfds offered some sort of edge

and whilst i can see the point that a key advantage of using cfds is that you dont have to put up as much cash, and i totaly get that advantage, it is imperative that everyone remembers that mimimal trading losses are key to trading success and execution costs are very very important

trading can be very very expensive for anyone learning - and it is so important for people to realise that professionaly trades pay fractions of what the average person pays to trade, and if professional traders had to pay what the average trader pays in costs - it would be real difficult for the professional to make money

BUT in relation to your last point - that i definetly agree with - dont judge anyone's trading on what they post as that can be totaly misleading - especially in relation to anyone who is posting in order to market their own services such as training

so in order to evaluate anyone who seeks to train you - make sure you get absolute proof of their trading experience and their profitability of anyone "telling" you that they can train you to trade

 

[BBB]

NASDAQ Trading From The UK

Hmmm, some interesting points made.

To anyone thinking of trading NASDAQ stocks from the UK, this is what I did...

I opened an account with a US broker - no tax/stamp duty as I am considered a 'non-resident alien'. I only have to pay CGT when I bring my winnings back home to the UK. The broker or DAT outfit should provide all the necessary paperwork for this.

Here's the sting - the FX rate! The dollar is taking a bath at the mo' and it don't look like getting out any time soon. This does impact your profitability especially if you make the mistake like I have done on transferring your winnings to a UK bank/day light robber such as Lloyds TSB. In fairness though, if you phone your bank, they may agree to a special rate if the transfer amount is fairly large (over $4k in my experience), but this is down to you and your negotiating ability.

I'm thinking of trading futures in the future(!) What are the tax implications here if I trade CME, LIFFE and Eurex? Does anyone know?

My priority is to pay NO TAX to Pony Blair so he cant murder any more Iraqi kids- but that's another story...

 

[TraderPattern]

Re: NASDAQ Trading From The UK

Here's the sting - the FX rate! The dollar is taking a bath at the mo' and it don't look like getting out any time soon. This does impact your profitability especially if you make the mistake like I have done on transferring your winnings to a UK bank/day light robber such as Lloyds TSB.

Hedge currency to the value of your account, making adjustments every 1-3 months. Don't let a sliding dollar get in the way!

 

[TheBramble]

Very good point. I'm guessing the costs of hedging are far less than being on the wrong side of an FX move (and why are they so seldom in one's favour...?).

 

[Trader333]

BBB,

It all depends on where you are considered to be domiciled and where ever that is you be taxed by that country. Most Countries have agreements in place to cater for this. As for your comments on Blair, well if you are trading the US then some of your money will just go to the US administration via tax paid by the broker you use so it is all a bit academic.


Paul

 

[BBB]

TP - You're right! Such a simple idea too. Just shows the simple ideas are the smartest, yet poor old BBB can't see the obvious sometimes! Well, no one's perfect. So much for my signature!

Paul - Yes, it's academic, but I'm sure the amount of tax I pay in CGT is less than the tax my broker pays on my annual commissions?? Either way, I'm nitpicking now, and I dont think this is the right place for me to be expressing my political biases regarding the incompetence of the government anyhow. Sorry.

 

[pollux75]

Re: NASDAQ Trading From The UK

I opened an account with a US broker - no tax/stamp duty as I am considered a 'non-resident alien'.

There is no stamp duty in the US anyway.

I only have to pay CGT when I bring my winnings back home to the UK. The broker or DAT outfit should provide all the necessary paperwork for this.

I'm afraid it doesn't quite work like that. You have to declare the capital gains that you made in the US to the Inland Revenue.