Negotiating the Spread for bigger positions

[rjmahan]

Hi All,
I am a reasonably successful speculator.

I now trade £5-25k positions on UK stocks (down to AIM Market Cap).

Does anyone know of any spreadbet companies which would lower their spread for someone like me who trades reasonable size. Knowing the market spread I can work out how much some of these companies are making and a few hundred quid a roundtrip is a lot for what they are actually having to do.

I recon many of the spreadcos are set up for the smaller trader and traders in indices where these issues really dont apply as much.

I need to spreadbet to minimise CGT so going direct really isnt an option.

Any recommendations ?

Thanks,
Rob

 

[Pazienza]

Try Prospreads - they negotiate on spreads, and they've just introduced stocks. Only FTSE 100 and Eurostoxx 50 at present.

You could always ask IG I suppose - the worst they can do is say no, after all.

 

[rjmahan]

Thanks Pazienza - worth a try, though the spread problem is more on the FTSE 250 stocks and below.

 

[Hoggums]

Hi All,
I am a reasonably successful speculator.

I now trade £5-25k positions on UK stocks (down to AIM Market Cap).

Does anyone know of any spreadbet companies which would lower their spread for someone like me who trades reasonable size. Knowing the market spread I can work out how much some of these companies are making and a few hundred quid a roundtrip is a lot for what they are actually having to do.

I recon many of the spreadcos are set up for the smaller trader and traders in indices where these issues really dont apply as much.

I need to spreadbet to minimise CGT so going direct really isnt an option.

Any recommendations ?

Thanks,
Rob

No harm in asking, although I'd hardly consider 5-25K a large position size. Maybe when you are trading £250K+ they might be more willing.

 

[shortsell]

hoggums has it right, i'd be very surprised if they were looking to do you a favour on that sort of trade size...

there are no shortage of clients in the industry paying £40k+ a month in commissions (spread) - these are the guys who can negotiate their terms.

good luck though - you never know.

 

[Pazienza]

hoggums has it right, i'd be very surprised if they were looking to do you a favour on that sort of trade size...

there are no shortage of clients in the industry paying £40k+ a month in commissions (spread) - these are the guys who can negotiate their terms.

good luck though - you never know.

£40K a month on spread betting? Not DMA? That's a lotta cake.

Which firms would you do that through?

 

[shortsell]

i won't go into details as there is no need, but i am ex-industry, and used to look after the firm's biggest punters for equities, and a bit of fx. all of the biz was executed direct to market (by phone with me and the boys) and then wrapped up as a spread bet for booking. i am aware of clients who continue to do 6 figures a month in spread - although these are admittedly rare.

ALL of the decent firms will offer such facilities to big position traders - particularly in stocks. my firm had a large book of hnw clients using us for tax effiiency on stocks and medium term stuff on fx and futures.

that's why it makes me laugh when you read threads like the capital spreads one with jokers mouthing off about how it is a **** retail product etc etc.

some of th most sophisticated guys i've ever spoken to were clients when i was in SB - and they paid big comms because it was worth it, simple as that.

 

[Pazienza]

Interesting, thank you.

 

[rjmahan]

I would say however that relative to the average sb punter a £25k position is big.

Shortsell - how did you get round the 50k insurance issue when you were dealing with the big hitters? Right now I spread it about to keep under - but one day (hopefully) that wont be possible.

I wouldnt want funds uninsured in a SB account.

Thanks,
Rob

 

[scose-no-doubt]

i won't go into details as there is no need, but i am ex-industry, and used to look after the firm's biggest punters for equities, and a bit of fx. all of the biz was executed direct to market (by phone with me and the boys) and then wrapped up as a spread bet for booking. i am aware of clients who continue to do 6 figures a month in spread - although these are admittedly rare.

ALL of the decent firms will offer such facilities to big position traders - particularly in stocks. my firm had a large book of hnw clients using us for tax effiiency on stocks and medium term stuff on fx and futures.

that's why it makes me laugh when you read threads like the capital spreads one with jokers mouthing off about how it is a **** retail product etc etc.

some of th most sophisticated guys i've ever spoken to were clients when i was in SB - and they paid big comms because it was worth it, simple as that.

I really just don't understand that. If you're willing to pay 6figs/month in spreads then why the hell would you not just pay someone to set up something offshore. You could probably get it for 1 months comms inc all annual administration. Then you could just trade DMA and pay true spreads :S

 

[Pazienza]

I really just don't understand that. If you're willing to pay 6figs/month in spreads then why the hell would you not just pay someone to set up something offshore. You could probably get it for 1 months comms inc all annual administration. Then you could just trade DMA and pay true spreads :S

If you're onshore though you'd still have to pay tax on your income when you get it I suppose, so SB would still have an advantage.

 

[peakoil]

@pazienda - but is that advantage really guaranteed in the long run - given his not insignificant position sizes day in day out? If not, then Scose may have a point.

 

[Pazienza]

@pazienda - but is that advantage really guaranteed in the long run - given his not insignificant position sizes day in day out? If not, then Scose may have a point.

Hi Peak,

I suppose not, but you can always turn to DMA at the point it does I guess.

 

[tar]

I really just don't understand that. If you're willing to pay 6figs/month in spreads then why the hell would you not just pay someone to set up something offshore. You could probably get it for 1 months comms inc all annual administration. Then you could just trade DMA and pay true spreads :S

Think about it , for UK shares investors SB is worth it , high leverage , no stamp duty , no tax , guaranteed stops option !

 

[Pazienza]

Thanks Pazienza - worth a try, though the spread problem is more on the FTSE 250 stocks and below.

Just had an email from Prospreads today - they've added FTSE 250, and will be adding the Dow components soon apparently.

 

[shortsell]

I would say however that relative to the average sb punter a £25k position is big.

Shortsell - how did you get round the 50k insurance issue when you were dealing with the big hitters? Right now I spread it about to keep under - but one day (hopefully) that wont be possible.

I wouldnt want funds uninsured in a SB account.

Thanks,
Rob

well assuming you're using a sensible firm who segregate your funds fully, your counterparty risk is more likely with the banks than with the SB firms themselves - a quick call to customer services will sort out where your money is actually being held.

 

[shortsell]

Think about it , for UK shares investors SB is worth it , high leverage , no stamp duty , no tax , guaranteed stops option !

i don't know if you're being serious or not, but just to clarify, guaranteed stops wouldn't be an option as the sb firm wouldn't want that sort of exposure to big positions in single stocks. besides which, big boys position trading stocks tend not to use hard stops, but rather just be sensible about managing their positions/risk.

'high leverage' - the enemy of the retail punter.

 

[Black Swan]

that's why it makes me laugh when you read threads like the capital spreads one with jokers mouthing off about how it is a **** retail product etc etc.

some of th most sophisticated guys i've ever spoken to were clients when i was in SB - and they paid big comms because it was worth it, simple as that.

Two good points well made..particularly in relation as to why certain huge players may prefer to use SB. In you experience (rough percentage terms) what was the break down of guys using SB-ing who worked in the related industry..? Guys using SB who worked in the city so to speak?

 

[shortsell]

well it's difficult because on my desk, which was set up specifically to handle that sort of business, high.

in the context of the overall client base, the % was much lower, but the % of revenue would have been higher, as you would expect.

 

[tar]

i don't know if you're being serious or not, but just to clarify, guaranteed stops wouldn't be an option as the sb firm wouldn't want that sort of exposure to big positions in single stocks. besides which, big boys position trading stocks tend not to use hard stops, but rather just be sensible about managing their positions/risk.

'high leverage' - the enemy of the retail punter.

I agree mostly investors will not use hard stops or high leverage , anyway the bigger your size the less the leverage offered by the broker , but i mentioned these as advantages for SB over physical stock trading and it is still valid , now you mention G stops , not all brokers operates the same , IGindex offers G stops for UK shares , but as you know there is a minimum distance and a premium , for example : Kalahari minerals with IG you could use a G stop but with Cityindex and Spreadex you cant .