spread betting

destiny

Member
84 0
hi,
from what i gather for spread betting you can either have a broker such as cityindex or have direct access which has a lower spread, if thats the case why doesnt everyone just use direct access?? :confused:
 

Skimbleshanks

1
2,325 16
These are two separate trading vehicles, and each has benefits and drawbacks.

Spread betting is tax free, and is carried out via spread betting companies. The spreads are wider as this is where the companies make their profits, among other things.

However, trading using stocks and futures is liable to tax on gains, and is carried out through direct access brokers. The advantage is lower spreads, but you pay a commission on each trade which is where the direct access brokers make their money.
 

FTSE Beater

Experienced member
1,518 5
Hi Destiny

Spreadbetting is better in some area's

  • No tax to pay
  • No stamp duty or commissions to pay
  • Start-up costs are lower. I believe you can start from about £500
Spreadbetting does get some bad press at times, some justified some not. It all depends on so many different factors when deciding between Direct-Access and Spreadbetting

HTH :)
 

destiny

Member
84 0
thanks for the quick replies :D
im still a bit confused though :rolleyes:
so having direct access means you have to pay CGT? and on top of that pay commision aswell!? :mad:

by the way is Fixed Odds Betting same as spread betting?
and is options the same as futures? im sorry about all the questions, this is all new to me, i didnt know there was so much jargon! and so many types of ways you can trade. i have alot to learn then :|

dont worry i wont be asking too many questions ;) is there any website with all this stuff in it?
 

destiny

Member
84 0
broker

which is the best broker in terms of lower spread for spread betting? ive read the reviews but still unsure which one to open, any suggestions?
 

anley

Senior member
2,730 229
Be very wary of the 'tax free' gimmick for it only works if one actually makes a profit - Over time.

For the majority of people it's a more prudent policy to trade in products where you pay tax on winnings but can also use tax-losses.
 

Skimbleshanks

1
2,325 16
If you have profits in your direct access account then you are liable to pay UK tax, and CGT is just one form of taxation. And you pay commission on every trade. If you are trading UK stocks then you will also need to pay ½% stamp duty. US stocks do not have stamp duty.

Futures and options are both derivatives and are quite separate from each other. They are not for beginners.

The main spread betting companies are Deal4Free, Finspreads, IG Index, Cantor Index, Capital Spreads, etc. Each has their pluses and their minuses. Some need higher minimum account balances than others, some have higher minimum stakes, etc.

Finspreads requires £100 minimum to open an account, and you can 'learn' for 8 weeks in your account before they bring in the stipulation that your trades must be for a minimum of 50p a point. This, I believe, is the lowest entry level for a SB company.

Some of them have demo accounts so that you can mess around on a simulator just to see how you fare with spread betting before you fund your account.

I would suggest that you NEVER open a credit account with a spread betting company, but open a cash account instead. The advantage of a cash account is that you can only lose what is in that account, and that is a great safety net for when you are a newbie starting out. The market is a dangerous place, so protect yourself with a cash account.

Do feel free to ask questions - we all started out where you are now. And when you get to where we are, you too can start answering all the questions! LOL
 

MCGF

Well-known member
339 0
Id hold fire on blowing money if u dont know the difference between spread betting and fixed odds betting!

Fixed odds is a set price on an event occuring that u can back at a bookies i.e man utd 2/1 to win premiership-u bet £1 u would win £3 (£2 plus ur original pound back)

Spread betting is where a quote is offered i.e 38-40 points bolton end up with in the premier league so u can sell at 38, if u think they end up with less and its ur stake times the points they are below-so if they end up with 30 points and u bet £1 a point u end up winning 8 x £1= £8 but if u bought at 40 thinking they would do better than u lose 10 x £1= £10

Hope thats of some use destiny
 

destiny

Member
84 0
hi all,
thanks for your quick replies, they are greatly appreciated :)
maybe some of you should open up a website for giving advice, and charging a monthly fee :cheesy: im sure that will work with all these so called experts confusing people more with so many f**** systems!! :devilish:

is there any guide i can read to understand how spread betting works, just the fundemantals as opposed to a system used for trading?

ive recently downloaded a 14 day trial of Marketmaker from deal for free, im trying to make virtual trades but cant, anyone have any suggestions on another broker, the system i thought would be much better graphical, instead it looks like a kid has designed it :LOL:

im in the process of trying to find out which course to buy, ive become much more confused than i started with, i want to purchase a system that has tricks of the trade, loopholes, secrets, patterns i hope you get my drift. ive got suggestions, some1 offered me vinces home study pack for £499 or with the same price a purchase from train4cash. any suggections?
 

jklondon

Active member
212 2
I use IG and frankly am happy with their overall service. I would suggest you download their user guide from the website - its has lots of useful generic info and examples on SB.

Also open a trial account with capitalspreads.com, play around with this for a bit to get a feel for Spread Betting.

All the best!
 

sandpiper

Well-known member
458 54
destiny said:
hi all,
thanks for your quick replies, they are greatly appreciated :)
maybe some of you should open up a website for giving advice, and charging a monthly fee :cheesy: im sure that will work with all these so called experts confusing people more with so many f**** systems!! :devilish:

is there any guide i can read to understand how spread betting works, just the fundemantals as opposed to a system used for trading?

ive recently downloaded a 14 day trial of Marketmaker from deal for free, im trying to make virtual trades but cant, anyone have any suggestions on another broker, the system i thought would be much better graphical, instead it looks like a kid has designed it :LOL:

im in the process of trying to find out which course to buy, ive become much more confused than i started with, i want to purchase a system that has tricks of the trade, loopholes, secrets, patterns i hope you get my drift. ive got suggestions, some1 offered me vinces home study pack for £499 or with the same price a purchase from train4cash. any suggections?

destiny,

Apart from the ig index, finspreads, deal4free and capital spreads websites for info on spreadbetting you could also try and get a copy of "Spread Betting To Win" by Jacques Black.

It's probably on the web somewhere in pdf form. You can pick one up new from WHS or Waterstones for £7.00.

Before you go down the "black box" system route touted by so many people (including others on T2W unfortunately) I would suggest you have a look at:

1) www.collective2.com. Many system(s)/signals for sale. I haven't seen one with a decent win ratio or P/L yet. Incidentally, this is what happens when people submit systems for independent verification of results (including slippage and spreads), i.e. something that looks great in backtesting proves to be pants.

2) Have a look on betonmarkets.com. Not a form of trading that I personally like. But, they have quite a neat set-up there with "gurus" who post trades. You used to be able to verify their past performance on there as well.

3) If you are really serious about the "system" route. And believe that someone else may have found the grail then you have to look at "futures truth" magazine/website. They are the only people (I know of anyway) that independently verify trading system results.

Although having said that. I traded a system late 90's that was rated by futures truth that relied on 15 point ranges on the S&P and was very biased to the short side because of put/call ratios at the time. Yep, that worked out well (NOT).

Re: tricks of the trade, secrets, loopholes.... :). There really aren't any. There is only stuff you don't know yet. Someone else quoted Theresa Lo on here somewhere where she said that there are are only three patterns:

1) Tests
2) Retracements
3) Consolidations/Congestions

and everything is basically an extension of these.

It's quite true.

You could so far worse than read everything that Skimbleshanks, Chartman et all have written on it's various forms on here. Having done that follow their advice and just trade one (yes one) pattern. Get to know it inside out and practise sitting on your hands for the rest of the time (very difficult to do as Skimbleshanks has said).

It's very true that you get out of this what you condition yourself to expect and that generally your success will be proportionate to the amount of effort you are prepared to put in.

If you can get rid of the notion that someone like VS holds the key to a simple and straightforward get rich quick scheme then you have a chance. Otherwise, like many others before you, I'm afraid that you'll be very disappointed.

To be honest, if I didn't want to put the work in myself or I wasn't passionate about this stuff I would find myself a decent CTA/Broker and open a fully managed account.
 

destiny

Member
84 0
in responce to peedee,
ive been in the markets for 1 year only, well im a student i mean i was.... :cry:
started in jan 03, made £25000 by august, ALL IN SHARES. i was only doing this on the side whilst studying and doing a part time job. i was on top of the world, made big plans, was going to do masters etc. i had plans to forget the markets after hitting a profit of £30000 and going back to it when i graduate.

things started to go wrong, i had too much on my plate, i cudnt concentrate on studying part time job and markets. in a nutshell disaster struck and i loss all £25k and £10k on top. fell in debts so much that i couldnt carry on studying, the £10k was borrowed off loan with big ineterest. forced to leave uni and go back to my parents house which i hate :( became depressed, got counselling, etc got sacked in the job, fell ill for 4 weeks, doctor goes its mental illness :devilish: gf f**** off, im only talking a month back.

anyway all that i ever dreamed of all gone, it all happened so quick, a loser always resorts to higher stakes. i just couldnt cope with so much going on. anyway as a result i cant eat, neither can i sleep, i take sleeping tablets 3 at a time and they dont work. etc etc

i recived mail through the post, and guess what, it was vince, financial spread betting was all new to me, i saw light at the end of the tunnel, started to dream again etc hope was building, to pay for the course i was going to borrow more from my mum. when i checked on the net i found out he is a bast***. that light faded away. ive been sending emails so many traders, posting messages, checking out websites etc but getting so pissed off, im getting confused. too many difference of opinion, dont know who to trust.

sh*it happens, ive learnt not to live in the future(fantasy) or you will lose reality(present). i dont know what ill do, i got sucked into the what he(vince) said :devilish:

anyway appreciate your help, thanks for your reply sandpiper. every little helps.
 

MCGF

Well-known member
339 0
Destiny-thats quite a distressing time u have had!

Wish u all the best in whatever direction ur life now takes
 
 
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