The "Spread Trader"

[Suts89]

Hi, i,m very new to spread betting and am after some advice.

Has anyone here had any dealings with Fleet Streets "Spread Trader" which is currently being penned by "Thierry" (sorry cant remember his surname)

For a yearly subscription they are offering weekly spread betting tips and info.

It all looks fairly above board to me but as i said i,m very new to this so would value your comments and advice.

Look fwd to hearing from you guys

Simon.

 

[weyhey]

Do your own research. Ask to see his recommendations from inception. See how they went. Graph the equity curve and see what the max. drawdowns were like. Can you handle such drawdowns?
I personally would be wary of a guru working for a spread betting firm. In my view spread betting firms are dodgy anyway. Why not just trade from the exchanges? It is beyond me why so many people trade through spread betting firms.

 

[Suts89]

I was not aware that this guru was working for a spread betting firm. Can you give more details on that??

Cheers

 

[weyhey]

Whether he works for a spread betting firm or not the main point is do some research on the guy first.
Ring him personally and ask to see all his reccomondations. If your going to be paying for his services he wont mind. Ask for a free 30 day trial. Most of all be wary if he doesnt give you what your asking.

Good Luck!

 

[Suts89]

Thanks for your advice Weyhey.

 

[the blades]

It is beyond me why so many people trade through spread betting firms.

hello weyhey,

just to pick up on this - I once traded through a broker, but now SB 100% of my trades. I'll hold my hands up and admit that I have much to learn. Your above quote (and many others echo your sentiment) always leaves me scratching my head - as my thoughts are inveresly "why don't more use SB firms" - although this would not apply to day traders.

I hold for (typically) 3 months. The comission I pay is in line with stamp duty. I am long / short so the interest element cancels itself out. Better still, my old trading pot has offset the mortgage so I make 5% more before I start. I make a profit that would put me into CGT teritory. How can any other vehicle better SB for me?

All advice appreciated.

UTB

 

[weyhey]

Hi Im not sure of the tax implications of spread betting. Im looking at it from purely a transparency issue. To me trading with spread betting firms is like trading T-bonds with a casino, they will always skew the odds in their favour, but this time it will be the price.

if I trade on a recognised exchange I can see the price and I can trade it with ease. My money is safe guarded against rogue traders as its held in a client segregated account with a clearing firm. i think id rather my money with refco or Man than with Deal4 Less or Spread Away Inc.

As far as tax goes if I make a profit then im more than happy to pay my share of tax, its the least of my worries if im making profits.

 

[the blades]

Hi Im not sure of the tax implications of spread betting. Im looking at it from purely a transparency issue. To me trading with spread betting firms is like trading T-bonds with a casino, they will always skew the odds in their favour, but this time it will be the price.

if I trade on a recognised exchange I can see the price and I can trade it with ease. My money is safe guarded against rogue traders as its held in a client segregated account with a clearing firm. i think id rather my money with refco or Man than with Deal4 Less or Spread Away Inc.

As far as tax goes if I make a profit then im more than happy to pay my share of tax, its the least of my worries if im making profits.

As far as indeces are concerned then there is a (small) issue of transparency.

As for individual stocks - I've never had an issue, trading around 10 stocks per month for several years.

The price quoted = the market price plus the comsission and an interest charge. No other skewing of prices occurs in my experience. The company makes profit theough the spread and all large bets are hedged so they're covered.

At the end of the day, the tax angle overides all disadvantages as far as I can see. And as far as I'm concerned, the wife and I pay easily enough tax for me to be happy to avoid paying more I can't understand how people who are so concerened with a tiny ammount of price differential can happily write off a large chunk of their profit in tax, and be happy with it(?)

Seriously, out of interest is your opinion formed from experience or from others? I often feel that the word "bet" pollutes the image, but the reality is, for me, somewhat different. As a final thought - note that the spreadbetting firms are part of huge financial groups - not the mickey mouse outfits you infer - I'm sure your money's safe

UTB

 

[LION63]

Weyhey,

Price transparency with the spread betting companies is down to the instrument traded and the company used. Share prices are always based on the underlying price which any trader who has access to Level II data can check, the company then adds it's own spread (which you know in advance), the indices are based on the underlying futures markets and are as transparent as they need to be. CMC also have a CFD department/subsidiary and other members of the Community have said that the spreads and quotes are the same.

It all comes down to a matter of choice and there are a lot of members here that spread bet quite happily and profitably, they would be very unlikely to switch to other forms of trading. One of the biggest advantages of spread betting is the tax free status, whilst that might not sound important, ask anyone who makes £50,000 per annum how they would feel handing over some of their money to the Inland Revenue. Another advantage is the minimum account opening balance which when you combine with the minimum trade values makes it a very attractive trading method.

 

[nobrainer]

Lions69,
50k is ok but does it sustain a great lifestyle? When you are married with kids , I'd say a resounding no.
How many spreadbetters will clear 150k each year ie. equivalent to approx.250k for a tax paying trader?Not many I'd venture. For that reason, its better to worry less about the tax and more about making a much larger gross sum to compensate esp. for a short term trader imo.

 

[the blades]

Lions69,
50k is ok but does it sustain a great lifestyle? When you are married with kids , I'd say a resounding no.
How many spreadbetters will clear 150k each year ie. equivalent to approx.250k for a tax paying trader?Not many I'd venture. For that reason, its better to worry less about the tax and more about making a much larger gross sum to compensate esp. for a short term trader imo.

50K, 150K, 250K........? I must be missing something here?

Lets say your average profit target is 5% per trade. Using SB, you pay 0.5% more (though I'd suggest it's less than this). You lose 10% of your gain - far less than the tax you'd pay on this if you were buying the stock? And wouldn't CGT kick in around £7K per year?

Agreed it's a whole different topic if you're short term with a target of say 1%.

UTB

 

[LION63]

Nobrainer,

Does £50k per annum buy you a Lamborghini, house with a pool, diamonds and pearls for the wife? What about the mistress on the side? I do not think so. However, everyone has to start somewhere and then aim for the finer things in life. Whilst I agree with you that it is better to make a much larger sum, imagine what would happen if an individual made £250k and frittered it away without keeping the Inland Revenue's share aside.

 

[the blades]

Nobrainer,

Does £50k per annum buy you a Lamborghini, house with a pool, diamonds and pearls for the wife? What about the mistress on the side? I do not think so. However, everyone has to start somewhere and then aim for the finer things in life. Whilst I agree with you that it is better to make a much larger sum, imagine what would happen if an individual made £250k and frittered it away without keeping the Inland Revenue's share aside.

bloody hell! I'd really love to know what % of traders are making £50K+ per year. Whilst I've no doubt some are, surely this isn't the norm?

My inferiority complex is in fine balance with my BS detector when I scan through some threads on here :?:

UTB

 

[LION63]

the blades,

£50,000 per annum might sound like a large number but when broken down it is not, let us try a very simple exercise.

If we assume that one trades for 40 weeks, then it is a profit of £1,250. If we consider that one trades at £10 per pip or point, that is the equivalent of 125 points. For simplicity, we will consider that one trades forex, the target is achieved by making 25 points a day. Based on the comments made in this Community by the members, this is a reasonable number of points to make and relatively easy.

 

[the blades]

the blades,

based on the comments made in this Community by the members, this is a reasonable number of points to make and relatively easy.

agreed - but how honest are some of the comments?

Like I say - I buy that some people are making this. But others make outrageous claims about profits with certain strategies and claim that when they get more time from their job, they will get better still :?:

I may be guilty of gross oversimplification. I may have come across the most fulfilled career people when compared to Joe public. But I do struggle to square why these profits are easily avhievable by those who haven't given up the day job.

UTB

 

[LION63]

You have a very good point as to why they continue with the day job when they can make such large sums trading. It does not sound plausible. One thing to bear in mind is that although the overall amount sounds and seems very large, when broken down into daily amounts and points per trade, one will find that it is much easier to achieve.

Quite frankly, I would say that unless an individual can make at least 20 points per day, it is hardly worth trading. The important factor would then be the value of those points, if they are in the range of £10 to 25 it starts to add up (subject to the individual's lifestyle and commitments). Even at the lower end of the scale you are talking about £1,000 per week (£40,000 plus pa.) and at the upper end £2,500 per week (£100,000 plus pa.) and these figures are based on a 40 week year.

Assuming one was doing it part time and working off figures of say £2 per point, that is still an extra £200 per week or £8,000 pa. Many will say that that is chump change but it will buy a second hand car, pay for a very decent holiday or pay a child's annual school fees.

 

[Suts89]

Is it just me or does this thread seem to have taken on a completely different angle??

Dont get me wrong its all good stuff, but i still havnt had any answers to my original questions!

 

[the blades]

Is it just me or does this thread seem to have taken on a completely different angle??

Dont get me wrong its all good stuff, but i still havnt had any answers to my original questions!

yes, you're right and I apologise.

Plenty of other threads for us to debate this.

UTB

 

[Suts89]

The Blades.

Cheers

 

[DaveJB]

Suts,
no - BUT.... I'm not dreadful at trading, but I have to wonder at the practicality of a weekly SB letter/email - I SB and in the past 3 days I've picked 3 trades, all long, where I picked the trade based on end of day data and then went to open the trade for real on the next day. Signal at $45.18, actual trade at $45.90. Signal $7.91 trade at $8.25, signal at $28.65, trade at $28.81.

Now stop and figure this out - suppose I sent you my trade selections when I picked them... the three trades are currently priced $46.09, $8.37, and $28.76 - at a pound a point I'm £25 up. Now imagine I'm advertising what I sent you - I'm up £91+£46+£11 = £148 up in 3 days at £1 per point. (This is all gospel, by the way, I've done exactly this). There's a huge gap between my 'provable' email info and what you experience as a trader - and I'd not trade on anything more than a day old, any spread bet suggested today is Monday's fish wrapping, so a weekly email will be useful for precisely (IMO) half a day's trading a week.

I've got my account live on my other screen, since starting to type this I'm £47 up <g>
The stocks, by the way, are Intuit, Sanmina, and Microsoft, all Dec's. Think I'll retire and write a bvook on trading at this point, I've been paper trading for a while and these are my first 3 'real' bets on a small account I opened to test ideas on (obviously ideas I was fairly happy with... I'm not a complete bonehead) and I suspect a better than 10% profit in 3 days is probably as good as I'll ever get <vbg>

£53... has someone shot Bush or is this post-election euphoria fuelling a spending spree?!

Dave