Tightest FTSE spread? (1-pt)

A

asht2w

Junior member
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Hey Guys,
I have been using CapitalSpreads for a year, mainly for indices trading, and I am pretty impressed.
What baffles me is when other companies such as ETrade advertise their
spread-betting services s having the 'tightest spreads' which is not true.

E.g.
Capital spreads have a 2-pt spreadSn FTSE - which is easy to profit from.
ETrade FTSE spreads are 3-pts.
FinSpreads FTSE spreads were 4-pts last time I looked but they may have
come down to 3-pts after they introduced rolling-bets.

Does anyone know of any company offering a 1-pt spread yet?
Is it just a matter of time before we get 1-pt spreads or is 2-pts the limit if
companies are to make any profit margin at all?

cheers.

Ash.
 
Deal4free have a two pip spread in Ftse trading hours, if you want a one pip spread then you will need an Interactive Brokers Account and trade the Liffe Ftse Futures which are £10 per pip/ contract.
 
What kind of size do you trade in? The larger the size the smaller the spead.
 
Polo said:
What kind of size do you trade in? The larger the size the smaller the spead.
Click to expand...
It depends on the market at the time. On average £5/pt, with stronger signals £10/pt.
I read another post that Cantor offer a 1-pt FTSE spread on Mondays?
Hopefully that will be offered on other days as well as competition picks up
between the various firms.

Interactive Brokering Account? Hmmm..
Are there any fees/commissions I should know about?
Is it as straight forwared as SB'ing?
Is Interactive Brokering closer to Spreadbetting or CFD's?
(i.e. tax, length of contract etc)

Ash.
 
Interactive brokers is actually 0.5pts spread on the FTSE futs (most of the time) Coms are £3.40 per round turn/contract (highest level) but of course with futures and any other direct access you can attempt to capture the spread.

Its the only way to trade the indicies if thats your preffered market.
 
Captain Haddock said:
Interactive brokers is actually 0.5pts spread on the FTSE futs (most of the time) Coms are £3.40 per round turn/contract (highest level) but of course with futures and any other direct access you can attempt to capture the spread.

Its the only way to trade the indicies if thats your preffered market.
Click to expand...

Fascinating!

>£3.40 per round turn/contract

Does that mean fo ever trade I open and eventually close it will cost me about £3.40?
or am I misinterpreting?
 
asht2w said:
Fascinating!

>£3.40 per round turn/contract

Does that mean fo ever trade I open and eventually close it will cost me about £3.40?
or am I misinterpreting?
Click to expand...

Yep, buy and subsequently sell (or vice versa) = a "round trip"
 
asht2w said:
Fascinating!

>£3.40 per round turn/contract

Does that mean fo ever trade I open and eventually close it will cost me about £3.40?
or am I misinterpreting?
Click to expand...

No I think you have that right. It is not as simple as a spreadbetting account and opening the account itself is a bit of a pain when I last opened one you had to pass an exam and it takes a couple of hours to fill in all the forms and a few days to fund the accont.

It is expensive to trade via the telephone but you can also use an internet enabled phone to trade using their mobile trader service.

The only disadvantage is possibly the tax issue if you are making substantial profits.
 
schoe said:
No I think you have that right. It is not as simple as a spreadbetting account and opening the account itself is a bit of a pain when I last opened one you had to pass an exam and it takes a couple of hours to fill in all the forms and a few days to fund the accont.

It is expensive to trade via the telephone but you can also use an internet enabled phone to trade using their mobile trader service.

The only disadvantage is possibly the tax issue if you are making substantial profits.
Click to expand...

aaahh..that was going to be my next question :)
(Spreadbetting being Tax free and all!)
I'm now pondering the pros/cons,
Its only a hypothetical example so correct me if I'm really wrong:

Scenario1: Spread betting:
Stake £200/pt,
spread = 2pts, so indirect commision = £400
market moves 102 points
profit = £20,000.
Advantage: no tax to pay on profits *whoohoo*
Disadvantage:bigger spread to pass before profit *grrr!*

Scenario2: Interactive Brokering:
Stake £200/pt,
spread = 0.5pts, commision = £3.40
market moves 100.5 points
profit before tax = £20,000.
Inland Revenue Capital gains reduction 40-30%?(ignore allowances)
profit after tax = £12,000-£14,000.
Advantage: small spread can easily be beat *whoohoo*, less commission to pay
Disadvantage: IR biting huge chunks out of my gains *grr*
 
£3.40 is the commission you will pay to open and close a trade of one contract. 1 contract is the equivalent of £10pp.

so for your £200pp example you would trade 20 contracts and pay £68 commision to get in and out of the trade.

Have an honest look at your style and profitability. If you are making good money spreadbetting and really swinging for larger moves then the tax advantage is obviously the big reason to stay and there's no reason to open a futures account.

If you have more of a scalping method or find yourself losing at the moment then a futures account may be better for you.

Pro's and cons to each. Depends on your attitude, circumstances and pot :cool:

(No exam to open an account as far as Im aware)
 
I recently opened an account with futuresbetting.com. They have the tightest spread on offer for spreadbetting on FTSE 100 futures. They work with a spread of £4 per contract. Liffe Ftse Futures trade at a spread of £10 per contract. The spread that futuresbetting.com therefore effectively offers is £10+£4+£4 = £18 or £1.80 per point. The next lowest spread on offer for betting on FTSE100 contracts is £3 and is offered by http://www.deal4free.com/. So the spread that futuresbetting.com offers is 40% lower than the next competitor. Their trading platform is supurb, its just like direct access trading, except tax free, and with a slightly larger spread, but no commissions.
 
IB FTSE future Spread is usually 0.5 point as CaptHaddock says.

The 'exam' he mentions is a series of questions which you can keep on answering until you get them right.
Bottom line is that they absolve IB of most or all risk/blame if anything goes wrong, (tech probs etc) which in my experience is very rare. Far more rare than the many things which people here say 'go wrong' with SB, and most of which are not technical.

The real key to all this imho, is to ask yourself why SB is classed a gambling, whereas direct access is not.
When you can answer that question I think you will favour direct access, unless you are only trading for peanuts, in which case any tax saving you make is miniscule or non-existent.
However there are others here who claim to make a living from SB, so they may advise you otherwise.
Glenn
 
Futuresbetting.com offers the lowest spread for spreadbetting on FTSE100 futures. Direct access trading with IB is indeed cheaper.

As to the question as to whether spreadbetting is taxable or not. This question has been extensively discussed elsewhere and the consensus is clearly that spreadbetting profits are not taxable, just as profits from other gambling activities are not, unless the spreadbetting activities are performed as a trade. IR has in the past been proven very reluctant to view spreadbetting as a trade, just as it is reluctant to view direct access trading as a trade (instead direct access profits are taxed as capital gains). The only exception seems to be that if you do it full time on behalf of others (so for instance bookmakers are taxed on their betting profits). Yes this might change in the future, but their is no real benefit in changing the rules for IR since currently they take 3% of spreadbetting companies (except in case of futuresbetting.com because they are based in Gibraltar). This means that IR wins whether the individual gambler wins or loses. This brings in much more tax revenue than taxing the big spread betting winners out there.
 
Correction. Since, with futuresbetting.com you trade with a direct access platform the same way you do with IB the exchange spread is usually 0.5, the same as with IB. In addition there is the spread of £4 on both sides of the bid/offer. So a round turn means a cost of £5+£4+4= £13. This compares with a round turn cost with IB of £5 + £3.40 = £8.40. So yes a round turn with IB is 35% cheaper. But a spreadbet with futuresbetting.com is 57% cheaper than its nearest spreadbetting competitor, deal4free.com (£30).
 
Glenn, spreadbetting is classed a gambling so it is tax free, if they called it anything other than gambling then it would be open to tax.
 
Remember that if you choose to open an account with IB, there is a $10 fee a month if your commissions are below $30. There is also a fee for LIFFE data (dk what, since i only trade the US and European futures with them).
 
spreads. try Cantor index 1-pt spread offered

undefined
asht2w said:
Hey Guys,
I have been using CapitalSpreads for a year, mainly for indices trading, and I am pretty impressed.
What baffles me is when other companies such as ETrade advertise their
spread-betting services s having the 'tightest spreads' which is not true.

E.g.
Capital spreads have a 2-pt spreadSn FTSE - which is easy to profit from.
ETrade FTSE spreads are 3-pts.
FinSpreads FTSE spreads were 4-pts last time I looked but they may have
come down to 3-pts after they introduced rolling-bets.

Does anyone know of any company offering a 1-pt spread yet?
Is it just a matter of time before we get 1-pt spreads or is 2-pts the limit if
companies are to make any profit margin at all?

cheers.

Ash.
Click to expand...
 
How do I access futuresbetting.com? I try typing it in to my browser, all that comes up is a window asking for username and password.
 
If the UK spreadbetters get the act together. You wont need to look at Gibraltar, I think 3 pip spread on the DAX is to big, the underling market trades 0.5 half a tick. and the FTSE should be 1 tick,because this dull market don't move much.

Spreadbetting is getting better. but I would need a 2 or 3 tick spread to trade the YM.maybe 1 or 2 years we will get that. As long as spread bet firms are just 1 tick higher than the underling market, they can still call them self's spreadbetting
 
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