Colour me stupid, but what on earth is spread betting ??? I trade commodity futures now for something like 8 years. For that I have two commodity futures and options brokers I trade with. No betting involved there. You place your trades, you get your fills, you win or you lose, whatever your time frame is, that's it, period. Betting ??? Sorry I am lost here. You make it sound like some casino kind of thing. Commodity trading is a business, no more no less. Nothing to do with betting. Just analysis, be it right or wrong.
It's a peculiarity we have here in the UK. Instead of buying a contract, you are taking out a bet at whatever amount you choose per point move on the index. The spread betting company makes their money on the spread, and jiggles the price around when you want to exit to ensure they win, you lose. Something like that anyway. :cheesy:
The US chaps seem to think it odd too, and I know you're originally from the US. Just put it down to a British oddity!
There are some advantages to spreadbetting that are not available in trading futures. Most notabley the ability to trade at very low levels per point movement in a commodity future. The other advantage is that in the UK profits are free from tax. This has allowed many people who do not have the finance, or for other reasons, effectively trade. Some are very good at it and for position traders it is a very cost effective means to trade and make tax free money with relatively low risk levels.
Thanks Jonny. I learned something new again in this thread.
I have also taken measures to limit my tax exposure. In my case I have established a BVI registered company, which has corporate accounts with my brokers. That way I legally keep my earnings from trading commodities out of taxes reach.
Best regards, and good trading,
P.S. Jonny, are you trading commodity futures at the moment ?
Your original remarks about spread betting sounding like some casino kind of thing is probably what a lot of people think when they hear the word 'betting'. I expect the spread betting companies would love to ditch this word. It probably frightens many people - even now, when it has a much higher profile in the UK - from going anywhere near them.
In fact, to hazard a guess: I would think all the companies would get rid of the term if they were not afraid of losing their tax free status once it had gone. Without the word 'betting' it would be hard to justify it being treated any differently regarding tax from any other financial derivative. Perhaps others may disagree with me on this?
And although I am loathe to give 'Financial Spreads' yet another free plug, it is interesting that they now have an Italian division, so perhaps our brothers on the Med are now able to enjoy tax free profits (or more likely losses) too!
HI ATHELSTAN, you can spread bet copper and palladium on Finspreads at 1p a point for the first 8 weeks
The min bet on anything is then 50p a point and you can trade up to £500 a point at any time .
Do you really want to short nickel ? the Chinese are BUYING so take care you dont lose your shirt, all the best Twiglet