Spread betting stocks: good or bad idea?

grubs50

Well-known member
I just want to know people's opinions about spread betting stocks cos as relative Newbie i have always spreadbet only indices. Is it really a good idea to SB stocks or one is better off using other instruments?
 

sidinuk

Established member
If your trading plan includes trading shares for capital gains over the medium term then spreadbetting is by far the best way to do it. No capital gains tax and, more importantly, no stamp duty. Also the leverage means that you can trade a meaningful amount of stock without putting up too much capital.

The disadvantages, however, are that you receive no dividends and any losses made cannot be offset against other capital gains.

Don't try and daytrade shares with spreadbetting though, you'll get mauled. In fact don't try and daytrade the UK market at all, the only place to do that successfully is the US via a direct access platform. The costs and spreads are far too high in the UK.
 

bottomdollar

Active member
I've done a hell of a lot better spreadbetting the stocks than the indices... position trade them, that has been for me the best. I am finding it difficult to daytrade cos a) I'm crap and b) I work 9 to 5
sidinuk is right though... don't daytrade UK stocks or indices, you'll get mauled.. (like I have!!) haha
Best wishes
Bottomdollar
 

grubs50

Well-known member
my problem with spreadbetting stocks is choosing the right ones to trade.........i am going to try using a system from the Champion Trader manual after paper trading them for awhile , it advocates trading only stocks in the DOW 30 and FTSE100 cos of their liquidity.
 

dsmodi

Established member
grubs50

there's been a thread somewhere on this site about champion trader that u may want to have a look at before going down that road...
 

bottomdollar

Active member
My favourite stock is AZN, Astrazeneca.. it seems to follow TA pretty well :)
 

grubs50

Well-known member
dsmodi, i have read the thread and everybody seems to agree that the champion trader manual gives normally gives a good entry point 4 trades, the only problem seems to be the stop-loss mechanism.
 

ColinRiche

Well-known member
i think a lot of people would disagree with the negative comments
about trading London stocks

Its all a matter of opinion

I would say its easier to daytrade UK stocks than it is to daytrade the dow with SB

You have to pick the right SB company and the right stocks

.
 

ColinRiche

Well-known member
you need tight spreads and those outfits dont offer market spreads do they

you need high volume liquid stocks that are volatile

a lot of the ftse100 arent worth trading

check out the top 10 by activity and follow them first

for swing trading theres some select stocks in the 250 aswell

.
 

orchard

Active member
Grubs.
Fins do a daily top 10 volatility. Sorry cannot remember if it is on the home page or client page.

Look at www.finspreads.com

Sorry Grubs, just looked. it is on the client page :eek:
 
Last edited:

JTrader

Guest
Grubs
Also, you do get the dividends on stocks with spreadbetting.
 
Last edited:

Trader333

Moderator
jamrest,

You said: "Also, you do get the dividends on stocks with spreadbetting."

How does that work then as it is news to me ? If you dont own the shares which with SB you dont how can you get dividends on them because all you are doing is betting on whether the stock rises or falls in value ?


Paul
 

Cyclops

Newbie
If you are long they credit you with the dividend, if you are short they deduct the same amount from your account.
 

Trader333

Moderator
jamrest and Cyclops,

Well I didnt know that and I still dont understand why they do it but it goes to show that you can learn something everyday from this site. As I dont use SB companies then I havent gone into it in detail.


Paul
 
B

bisto

i'm not sure about this either - i have read ig's dealing guide on this and they talk about adjusting the opening level or size of the bet. Anyone experienced this?
 

JTrader

Guest
Regarding the dividends, one good thing with CMC spreadbetting anyway is that the dividends is added to your account as soon as they go ex-dividends. You do not have to wait 2-3 months as I believe you would have to with conventional shares. Yes I forgot that they deduct the same amount if you are going short.
 

seancass

Well-known member
Hi JamesT

I was under the impression that dividends were payable only when trading CFDs. Maybe wrong though.

Best wishes,
Seancass
 
 
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