prospreads.com

[Truth Seeker]

Hmm. If you classify yourself as professional, it might be difficult to argue with the IRS if they decide that spreadbetting for a living shouldn't be tax free.

This is what's playing on my mind too. The last thing I want is to pay an extra spread/more expensive comissions than other futures brokers because I'm getting tax free profits only to be taxed because I'm classed as a 'professional'. I'm not a professional, I'm, a gambler, just a self informed one who has studied the markets for over 10 years. But I'm still not a 'professional' am I? In the UK I'm not, I'm a retail gambler. So what makes one a 'professional' anyway? A trading licence? What?

 

[Truth Seeker]

What would be ideal is to offer the same service as they do now, but without the 'professional' status and £500k equity and do it as retail, then I will sign up. Otherwise I will have lie and I'm not prepared to do it because I don't want to get into trouble and there other SB firms around. I think Pro Spreads are a good company, but are missing out a lot of business.

 

[Ross Spur]

ProSpreads seems to have changed a lot since I last looked re. account opening, but they're still very vague about the way their platform works.

'...the same functionality as Direct Market Access...' doesn't mean it is DMA, but if it is DMA then surely it couldn't be classified as spread bet, anyway?

 

[ProSpreads]

What would be ideal is to offer the same service as they do now, but without the 'professional' status and £500k equity and do it as retail, then I will sign up. Otherwise I will have lie and I'm not prepared to do it because I don't want to get into trouble and there other SB firms around. I think Pro Spreads are a good company, but are missing out a lot of business.

Truth Seeker

To answer these questions you keep bringing up, please call me on 02033706223 and i can explain.

 

[pit pony]

ProSpreads seems to have changed a lot since I last looked re. account opening, but they're still very vague about the way their platform works.

'...the same functionality as Direct Market Access...' doesn't mean it is DMA, but if it is DMA then surely it couldn't be classified as spread bet, anyway?

Ross

Its really not that hard, as a client you get the actual market price the same as any bank trader or pro trader in an arcade, if you buy or sell a certain product they add or subtract a fixed spread, so basically when you click on your mouse they actually buy or sell the product and sell or buy it back to you in milli seconds, i tested the speed many moons ago when i was in an arcade and there is no speed issue. The reason why it's classed as a spread bet is because you get the actual market spread then they add a spread so classes as spreadbetting.

 

[Ross Spur]

Ross

Its really not that hard, as a client you get the actual market price the same as any bank trader or pro trader in an arcade, if you buy or sell a certain product they add or subtract a fixed spread, so basically when you click on your mouse they actually buy or sell the product and sell or buy it back to you in milli seconds, i tested the speed many moons ago when i was in an arcade and there is no speed issue. The reason why it's classed as a spread bet is because you get the actual market spread then they add a spread so classes as spreadbetting.

I'm not disputing the speed or that you get the market price, but are clients actually trading directly in the real market? If so, how is that a bet? If it's because PS add a spread on top of the market spread, why don't ordinary brokers just call their commissions spreads?

 

[pit pony]

I'm not disputing the speed or that you get the market price, but are clients actually trading directly in the real market? If so, how is that a bet? If it's because PS add a spread on top of the market spread, why don't ordinary brokers just call their commissions spreads?

There's the question

 

[gc1]

why don't ordinary brokers just call their commissions spreads?

I believe that in the U.K. SB companies pay betting duty on 'net customer losses' whereas in Gibraltar they pay betting tax on 'net income'. If a U.K broker registered itself as a spread betting bookmaker and it's customers collectively made a large loss the company could have a betting duty bill bigger than the commissions/spreads that they had charged for that period.

 

[x4x]

Trading is trading, it is not and shouldn't be considered an investment. Buying and selling currencies (for example) is no different than a green grocer buying and selling tomatoes.

Therefore by signing a 'professional declaration' profits will be liable to INCOME TAX.

Prospreads T&C's mention that profits aren't subject to Capital Gains Tax - but beware - it is INCOME TAX that is payable.

Prospreads are happy to say profits are exempt from CGT, so if I'm wrong I'm sure they will be happy to say that profits are also exempt from INCOME TAX - but I feel they will more likely sidestep the question and say tax liabilities will depend upon individual circumstances and not something they can advise on, if so perhaps they could give an example of 'general circumstance' whereby INCOME TAX wouldn't be payable.

I hope I'm wrong and await their reply.........:?:

 

[Shaun12uk]

I don't believe their is any debate about it, if you are classified as a pro gambler on the horses and that is your main source of income I.e trading than you will be taxable.
I personally don't see the big benefits which they are claiming over over major SB firms as by the time their fixed spread is added to the market spread it would not work out any cheaper if you are taxed as a 'professional' as classified by pro spreads.
Someone please correct me if I am wrong

Lastly being classed as a pro means you also negate any possible benefit of any regulatory body comp scheme!

 

[Truth Seeker]

I don't like the professional status either, it seems by declaring ourselves professional you waiver rights we should be covered by under normal spreadbetting rules and regs. As more and more sb firms are including no dealer intervention, what's the bonus with spreadbetting with Pro Spreads, I await their reply.

 

[fast trader7]

I think the main benefit is very high initial deposit compared to other SB's, a platform difficult to understand,based abroad......
If the other SB's offer automated execution with tight spreads, i donot think of any reason to for Prospreads. .25 spread to buy and .25 to sell i,e .50 on an instrument.
most SB's are offering .9 to 1 these days

 

[Shaun12uk]

I think the main benefit is very high initial deposit compared to other SB's, a platform difficult to understand,based abroad......
If the other SB's offer automated execution with tight spreads, i donot think of any reason to for Prospreads. .25 spread to buy and .25 to sell i,e .50 on an instrument.
most SB's are offering .9 to 1 these days

But that does not include underlying market spread So it will come out at 1 in total!!

 

[pit pony]

But that does not include underlying market spread So it will come out at 1 in total!!

But you get instant fills, where you dont anywhere else in any size, all SB's will fill you in £1 - £2 bets apart from when you win then they will requote you.

 

[Truth Seeker]

Think you will find more and more SB firms are offering no dealer intervention

 

[pit pony]

Think you will find more and more SB firms are offering no dealer intervention

Until you start winning, they dont like it.

 

[Truth Seeker]

True

 

[Shaun12uk]

True

Anyhow I thought the whole point of spread betting was that it is tax free. By declaring yourself as a professional spread better then technically you have/may become taxable to Hmrc.

Don't think anyone at Prospreads has thought this thru! Correct me if I am wrong.

 

[Truth Seeker]

Still no reply from Prospreads........

 

[johnnn]

To get an account with Prospreads, you must sign to: "I understand that when placing a spread bet, I will be trading outside of a regulated market" and "I understand that ProSpreads is under no obligation to comply with the rules of the exchanges with regards to my spread bet, although they will endeavour to do so".

Could someone explain the second bit, in particular the "with regards to". If they trade on an exchange, they do have to comply with its rules, so doesn't this boil down to "we don't have to hedge your trade"? The big question for me is to what extent and when do they take the other side from their client, which is not the same as hedging?