Spreadbetting broker recommendations

[Riddler]

So I have been using CFDs to trade since I began and at the time I was aware that there was a Spreadbetting alternative which meant that as a UK-based trader I would be able to avoid liability for CGT but given my account size and negative performance I didn't worry about it.

But now I would like to take another look at this and I was wondering if anybody could recommend a broker that offers a demo account and doesn't have a lengthy sign-up process (just for the demo), name and email and then I'm in basically (quite like signing up to this forum). If they let me use MT5 to do it that would be perfect but I'll learn their platform if I must since neither of my CFD providers offer spreadbetting.

I just want to see for myself if there are any other benefits to be had by switching from CFDs aside from CGT and to see if it's right for me as I enter year 3 of this trading endeavour.

 

[Sharky]

So I have been using CFDs to trade since I began and at the time I was aware that there was a Spreadbetting alternative which meant that as a UK-based trader I would be able to avoid liability for CGT but given my account size and negative performance I didn't worry about it.

But now I would like to take another look at this and I was wondering if anybody could recommend a broker that offers a demo account and doesn't have a lengthy sign-up process (just for the demo), name and email and then I'm in basically (quite like signing up to this forum). If they let me use MT5 to do it that would be perfect but I'll learn their platform if I must since neither of my CFD providers offer spreadbetting.

I just want to see for myself if there are any other benefits to be had by switching from CFDs aside from CGT and to see if it's right for me as I enter year 3 of this trading endeavour.

I've used IG and CMC personally for spread betting. Overall IG is the gorilla in the room, and I don't think you can go wrong with them, CMC is also a heavyweight. I prefer CMC interface, esp. on mobile, but perhaps that's personal preference. It also depends on the style of trading. If you're position trading or holding longer term, which is not so common for spread betting, but which can be more profitable in the long run, then IG have futures on stocks and ETFS, whereas CMC only offer it on indexes and commodities. Rollover on CMC offers a 50% discount and the spreads from my experience are slightly tighter. I haven't used the demo accounts but both account opening processes are quick and easy.

CGT is the main advantage of spread betting, assuming you have some income from another source, you can pretty much forget the tax aspect. Of course it works the other way, in that you can't offset losses, and let's not forget most traders lose money (as anyone who reads the small print on spread betting and CFD brokers know.)

 

[Riddler]

I've used IG and CMC personally for spread betting. Overall IG is the gorilla in the room, and I don't think you can go wrong with them, CMC is also a heavyweight. I prefer CMC interface, esp. on mobile, but perhaps that's personal preference. It also depends on the style of trading. If you're position trading or holding longer term, which is not so common for spread betting, but which can be more profitable in the long run, then IG have futures on stocks and ETFS, whereas CMC only offer it on indexes and commodities. Rollover on CMC offers a 50% discount and the spreads from my experience are slightly tighter. I haven't used the demo accounts but both account opening processes are quick and easy.

CGT is the main advantage of spread betting, assuming you have some income from another source, you can pretty much forget the tax aspect. Of course it works the other way, in that you can't offset losses, and let's not forget most traders lose money (as anyone who reads the small print on spread betting and CFD brokers know.)

Funnily enough one of my brokers introduced spread betting days after I posted this, only some FX pairs though but I can open a demo now and see how it all works at least though I still might try IG as I want to demo trade the instruments I'll be using on a live account

 

[Trevor2522]

Since Brexit (31/1/2020) have the ESMA/FCA leverage regulations, as applied in the UK, been eased at all? Or any prospect of such? Since 2018, UK spreadbet firms have demanded around 10X the former deposit required for retail traders, to trade at the same size. For IG's minimum deposit of £250, this meant only Gold could be traded -- and that's a tough one to forecast!

 

[tomorton]

Since Brexit (31/1/2020) have the ESMA/FCA leverage regulations, as applied in the UK, been eased at all? Or any prospect of such? Since 2018, UK spreadbet firms have demanded around 10X the former deposit required for retail traders, to trade at the same size. For IG's minimum deposit of £250, this meant only Gold could be traded -- and that's a tough one to forecast!

No changes so far, and no sign of any coming down from the FCA.

'Course, we live in strange times and there's always a possibility that a mass clear-out of European regulatory measures for political kudos might happen to include the ESMA margin limits.....

 

[Trevor2522]

Thanks for your response. The EU will eventually self-destruct as the controlling world cabal is currently being taken down. However, changes in financial regulations could take years to filter through. The UK could, presumably, opt-out at any time, though?

ESMA's octopus-like tentacles even stretch to Australian residents (but not foreign clients who are regulated in the Bahamas -- Blueberry Markets -- maximum 1:500!), hence the ASIC maximum of 1:30 leverage.

 

[tomorton]

Thanks for your response. The EU will eventually self-destruct as the controlling world cabal is currently being taken down. However, changes in financial regulations could take years to filter through. The UK could, presumably, opt-out at any time, though?

ESMA's octopus-like tentacles even stretch to Australian residents (but not foreign clients who are regulated in the Bahamas -- Blueberry Markets -- maximum 1:500!), hence the ASIC maximum of 1:30 leverage.

Yes, the UK could revert to the previous margin limits. Or introduce new measures - tighter or looser.

You have to remember the FCA (like ESMA) is not primarily a consumer-protection body, nor is it there to increase access to trading. Its objective is to ensure the healthy and sound continuation of the financial services industry, i.e. the firms who are in it. Of course this means keeping out cowboy firms but this is for two aims - to protect the mainstream of the industry from disruptive competition, and to ensure that loss of confidence in the industry does not drive customers away.

No reason for the ESMA limits to be reduced.