Trading in ISA's

catt

Member
57 1
landy

Take a look at the MyBroker and iDealing websites. Both offer email and telephone help if you want to ask them the question.

Catt
 

saxo98

Newbie
6 0
I believe choosing a broker on basic transaction cost might not be the most efficient way to deal in ISA's.
For example a broker charging £7 per deal may not use all the market makers to gain the best price for their client.Some brokers ,eg Barclays who charge £12, claim to scan the market before quoting.
Annual management fees , dividend collection and interest on cash balances could also be taken into consideration but overall it will be difficult to achieve all the benefits in one package.
Probably best to choose a named broker with competitive charges.
Ishares (ISF.L} as mentioned is a decent way to trade the FT100 as there is no stamp duty to consider and dealing can be done during trading hours.
I hear PEPS are to be merged with ISAs shortly and I would be interested to know if anyone has any updates on this.

Thanks
 

landy5678

Newbie
4 0
Hi JLS i read with interest your USD/ GBP hedging strategy with spreadbets.I have a trading account in USD, though I'm a UK citizen living in the UK...can you tell me more about how your spreadbetting works please

Cheers Landy

jls483 said:
Catt,

Thanks for the info. I use i-dealing for direct access in my SIPP and ISA and I am very pleased with the service. It's good to hear that it is also reasonably priced. The only thing that surprised me, and it makes perfect sense now, is that when doing direct access in an instrument priced in USD you will need dollars in your account - even if it is traded on LSE. After converting my account to dollars I hedged my exposure by buying some GBPUSD spreadbets. Now I don't have to worry about what happens to the dollar. So if oil goes from $50 a barrel to $100, but the $ goes from being worth 50p to 25p, unhedged the investment would not change, but when hedged I will double my money. If anybody wants to know how I did this - please ask.

Another advantage of holding dollars when trading dollar denominated instruments is that you won't lose out a little on exchange rates/fees when your pounds are converted to dollars each time as I believe some brokers do make a little extra this way.
 

jls483

Active member
173 0
Sure, let's assume for the moment that cable is 2.0000 and that you have a dollar account with $40,000 of cash and dollar priced shares. To hedge this account all you need to do is buy 1 GBPUSD spreadbet.

At the beginning with cable at 2 your account is worth £20,000. If Cables falls to 1.9999 then your shares are worth £20,001 but your spreadbet is worth -£1. Similarly if cable goes to 2.0001 then your shares are worth £19,999 but your spreadbet is worth £1. You will find that your spreadbet will always cancel out any change in the exchange rate. Interestingly, whichever way cable moves you will make a small profit and the further the move the better the profit.



The first time I discovered this I thought about devising a strategy of hedging forex with a spreadbet to guarantee a profit, but I found the sums required were so large that the return was only something like 3%.

John.
QUOTE]Cable Shares Spreadbet Total
1.9000 21052.63 -1000 20052.63
1.9900 20100.5 -100 20000.5
1.9990 20010.01 -10 20000.01
1.9999 20001 -1 20000.0001
2.0000 20000 0 20000
2.0001 19999 1 20000
2.0010 19990 10 20000
2.0100 19900.5 100 20000.5
2.1000 19047.62 1000 20047.62
[/QUOTE]
 

hellokimchi

Junior member
26 0
Can someone please comment on some issues I have regarding self-select ISAs. I'm particularly interested in ishares ETFs

Can someone please help me with some of these questions? I've had all sorts of confusing emails from various brokers.

-Are all ETFs free of stamp duty in the UK?
-Are account management charges for a self-select ISA only applied to your whole account - not each year's individual ISA wrapper? ie, A #50 annual management charge doesn't increase to #100 if you hold an ISA in each of two tax years.
-Most ishares are quoted in GBP, EUR, or $US. How does this affect my GBP broker account if I want to trade in an ishare quoted in EUR (eg- DJSC, DJ Euro STOXX smll cap) or %US (eg- IASP, Asia property fund)
-What do you do with an ISA when you want to sell and leave the money in cash until a buying opportunity comes along? Does your broker offer a tax-free ISA account for your self-select ISA cash? I assume the rates will be much less than current cash ISA rates (ie-6%)

I currently trade OEIC index funds within an ISA free of tax and charges, but position sizing is too tricky without an easy switch into cash. I've been looking at using ETFs within a self-select ISA instead.

Thanks for any replies.
 

jls483

Active member
173 0
1. As far as I am aware they are all free of stamp duty, but I would not bet my house on it.

2. Yes you pay a single account management charge. So best to bring all your ISAs together.

3. Prices in different currencies are handled behind the scenes either by the broker or the marketmaker - I'm not sure. However at the point of sale you will be given a price in pounds. Apparently these prices normally include a small commission just in the same way as using your credit card abroad. You will need to check with your broker what it is (If you trade using direct access then there will be no commission because you have to physically hold the currency that you are trading in).

It is quite possible to have cash in your stocks and shares ISA although the rules about how much you can have and how long you have it for are a littly murky. I think as long as you can argue that it is your intention to invest with it not leave it as cash then you should be ok. Whether the Inland Revenue ever both to enquire of your broker what people hold in cash in their ISAs - I don't know. It is not possible to get the excellent rates you get from a cash ISA - you will get whatever your broker pays out on cash. cash in a stocks & shares ISA is taxed at I think 20% but you don't have to declare it on your tax return.

Most brokers will also allow fund holdings so if you transfer all your holdings in then you will not need to convert them to ETFs immediately.

Overall can highly recommend making the change.

John.
 

saxo98

Newbie
6 0
I have traded ishares ETF's for a couple of years now and I can say they are a good way of trading the indicies just like trading any other share.So far I have only traded the FT100 fund which is ISF.L.
There is no stamp duty to pay when buying only the standard cost per trade and dealing online is equally as easy as buying stocks.The spread is around 0.2% and trades can be done at around £10 with some brokers.
The sale of ETF's in ISA's goes into a deposit fund within the ISA itself but the interest on money pending future investment probably won't be high eg 2-3%.The managers will always get you somewhere !!.
Regarding money on deposit within the ISA there seems to have been a change in heart since 2000-2003 downturn as I was always receiving letters reminding me I had money on deposit.
The reminders normally turned up 90 days after deposits of cash were made but since the collapse of the markets this hasn't happened .I'm guessing either plan managers or the inland revenue have backed off because they may have been forcing investors back into markets at the wrong time.At the end of the day these plans were introduced to enhance saving so I'm sure the government wouldn't want investors pulling out because they didn't have control of their own investments.Basically I wouldn't worry to much about money on deposit with the self select ISA.
Management fees seem to be either a percentage or a maximum cost in £'s per year eg £200.
Merging all plans together seems to be the logical way forward and I'm sure the PEP and ISA merger isn't far away .
Pity about having dividends taxed but over the years a build of cash can easily take you over the Capital Gains Tax threshold so ISA's can play their part this way.
 

goodtyneguy

Active member
146 9
Broker Recommendation Please

Hello folks, when I was new to investing I opened an ISA with T D Wasterhouse and after poor experiences with them quickly moved on to Selftrade. Through the acquisition of knowledge my investment horizons have broadend and consequently I need to upgrade to a broker more accomodative to me needs. I want to trade ETFs listed on the major US exchanges such as Proshares.com double leverage offerings. I envisage starting by position or swing trading and then once competant moving onto intraday trading. Not having had experience of this before I have listed some of the criteria I think will be necessary and desirable:

1)The platform must be suitable for intraday/swing trading
2) At least US stocks and ETFs must be tradable online with direct access being preferable.
3) Limit orders must be a standard feature in addition trailing stops is preferable.
4) No or low foreign exchange spread on dealing (holding foreign currencies in an ISA is disallowed AFAIK)
5) Real time charting

So if anyone can give me a recommendation for a suitable broker or point me in the right direction I'd appreciate it.

TIA
 

goodtyneguy

Active member
146 9
Hello folks, when I was new to investing I opened an ISA with T D Wasterhouse and after poor experiences with them quickly moved on to Selftrade. Through the acquisition of knowledge my investment horizons have broadend and consequently I need to upgrade to a broker more accomodative to me needs. I want to trade ETFs listed on the major US exchanges such as Proshares.com double leverage offerings. I envisage starting by position or swing trading and then once competant moving onto intraday trading. Not having had experience of this before I have listed some of the criteria I think will be necessary and desirable:

1)The platform must be suitable for intraday/swing trading
2) At least US stocks and ETFs must be tradable online with direct access being preferable.
3) Limit orders must be a standard feature in addition trailing stops is preferable.
4) No or low foreign exchange spread on dealing (holding foreign currencies in an ISA is disallowed AFAIK)
5) Real time charting

So if anyone can give me a recommendation for a suitable broker or point me in the right direction I'd appreciate it.

TIA

Anyone.......... ?
 

jls483

Active member
173 0
The only account that I know that offers direct access within an ISA is i-dealing. I have been very impressed with the customer service I have received from i-dealing, well to be honest from a chap called Gary Duckworth - I don't know what the rest of them are like.

You are right that it is not possible to hold dollars within an ISA so these are converted back into pounds each evening and unfortunately the exchange rate used is not very competitive.

When I last checked they didn't offer trailing stops but the number of brokers offering this seem to be increasing so hopefully in the future ...

No real time charting. But you can of course get this independently.

So i-dealing doesn't tick all your boxes I'm afraid - but it does off dma within an isa.

I think you might have to do on your own dirty work. Start working through the brokers and see if any does everything you need - then come back and give us a table of what you found out! You might want to work through them in the order of customer satisfaction from the t2w.com review section

John.
 

goodtyneguy

Active member
146 9
The only account that I know that offers direct access within an ISA is i-dealing. I have been very impressed with the customer service I have received from i-dealing, well to be honest from a chap called Gary Duckworth - I don't know what the rest of them are like.

You are right that it is not possible to hold dollars within an ISA so these are converted back into pounds each evening and unfortunately the exchange rate used is not very competitive.

When I last checked they didn't offer trailing stops but the number of brokers offering this seem to be increasing so hopefully in the future ...

No real time charting. But you can of course get this independently.

So i-dealing doesn't tick all your boxes I'm afraid - but it does off dma within an isa.

I think you might have to do on your own dirty work. Start working through the brokers and see if any does everything you need - then come back and give us a table of what you found out! You might want to work through them in the order of customer satisfaction from the t2w.com review section

John.

Thanks for the reply John, I have n't had much luck in getting ANY to my enquiries here,
hopefully that will change with your helpful contribution.

I've looked at a few brokers already but did n't write anything down so would find it dificult to recall their features and compile a table. I looked at the review page on T2W but I think I only saw ODL there unless I'm mistaken (I've been doing that much research of late I'm on information overload) Of the discount brokers I believe idealing is probably the cheapest one with direct market access but unfortunately the DMA is only for the LSE and not US markets where I want to be. Same with etrade as far as DMA is concerned.

I think I'm probably going to have to go a bit more up market to get that. ODL and M F Global are on my radar screen at the moment as I believe they offer DMA to the US but are obviously a bit more expensive than the discount brokers. Not a problem if their service is good.

More urgently I'm also trying to sort out a broker for my SIPP account for which there are more choices. You will see my enquiries on this elswhere on T2W, I'm nearly sure Interactive Brokers is the most suitable one for me on this front just (need to firm up on that though). I have n't decided on an administrator partially because I don't know who exactly they will work with. Their investment choices are awesome and their charges equally so but unfortunatley they are not ISA plan managers. The search goes on.
 

NVP

Legendary member
37,760 2,100
just resurrecting this thread ....................can someone let me know if any decent brokers allow you to wrap your CFD accounts in an isa ?

I am demoing CFD's on LMAX at the moment and wondered if I could solve the tax problem on any potential profits made ?

also a decent CFD's / sipp route will do as long as they move through the new pension rules next year........i'm 55 now so could use that route for profits made .......

I am scalping forex so thats probably where the issue is ..........I can see Hargreave Landown offer CFD's but they would have a heart attack if I wanted to wrap a forex CFD scalp account in there ?

N
 
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jls483

Active member
173 0
I don't think you can trade CFDs in an ISA.

In fact spreadbets are basically tax free CFDs so I would just pick a decent spreadbet provider. ProSpreads I think are pretty good.

John.

just resurrecting this thread ....................can someone let me know if any decent brokers allow you to wrap your CFD accounts in an isa ?

I am demoing CFD's on LMAX at the moment and wondered if I could solve the tax problem on any potential profits made ?

also a decent CFD's / sipp route will do as long as they move through the new pension rules next year........i'm 55 now so could use that route for profits made .......

I am scalping forex so thats probably where the issue is ..........I can see Hargreave Landown offer CFD's but they would have a heart attack if I wanted to wrap a forex CFD scalp account in there ?

N
 
 
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