Why spreadbet

[Marathonchap]

I have raised this point before when I have met traders and they usually give me a kind of blank stare.

I want to understand why spreadbetting is so widely used when you can daytrade the US markets and far more is in your favour, suchs as low commission, small spread, no stamp duty.

A spreadbetting company will continuoulsly be biasing the price you can trade at whereas trading directly in US stocks you can see what is happening on you chart and trade that.

Are people trading directly in a US account as well as Spread betting.

What puts people off when it comes to daytrading in actual US stocks. To me it seems like the best thing on offer.

Cheers
Marathonchap

 

[sgrech]

As I understand it, unless you have more than $25k in your broker account you can't carry out more than 3 daytrades each week.

Also there are issue surrounding tax i.e. spreadbetting is tax free whereas trading in U.S. shares is not (assuming you make a profit!!).

Hope this helps.

Simon

 

[FTSE Beater]

Hi Marathonchap

A spreadbetting company will continuoulsly be biasing the price you can trade at whereas trading directly in US stocks you can see what is happening on you chart and trade that.

You trade what you see spreadbetting the US stocks. There is a minimum spread of 5c which is pretty small on some of the large stocks.

The only reason I spreadbet is because, as sgrech has pointed out, it takes to $25k+ to day trade using a US Broker.

HTH

 

[Marathonchap]

Thanks Sgrech and FTSEbeater,

Now I understand.

It is a pity that they don't let folks daytrade with less than $25k. That restriciton makes no sense. A broker charges the same commission each time you trade no matter if you are trading with $5000 or $50000.

The second point I presume FTSEbeater is that when you do have enough to trade directly in US stocks you will do so? Or is SBing US so good that you don't have to?

I have noticed advertisements for spread betting US on some US based financial websites so perhaps SBing is going to take over.

Cheers
Dom

 

[FTSE Beater]

Hi Dom

The second point I presume FTSEbeater is that when you do have enough to trade directly in US stocks you will do so? Or is SBing US so good that you don't have to?

I'll change over when I get the money together, if nothing else it's to stop the slippage.

HTH

 

[Naz]

You know what i'm going to say.
IMHO the only way to trade US stocks is with a US broker.Prefreably Nasdaq stocks with a level 2 direct access screen.(free from your broker)
Spread bet those US stocks in the UK,your living in dreamland.How can you realy understand how the stock is going to move.What are the players up to? I can see what is happening and with direct access trade directly into that market, making my own price or trading with anyone on the screen.A UK spread better cannot see the action and can trade with only one company at a price that they set.