Are Spreadbetting firms bookies ?

[samfarrell]

Do Spreadbetting firms take the other side of their customers trades ?, or do they simply make the bid/ask spread ?
If they take the other side, like a traditional bookie, thats a bit worrisome

I can see the tax free benefits of betting but surely paying spreads at trade entry and exit is going to eat a lot of that over time, not to mention slippage

Would most professional traders be more likely to use Direct Market Access than SB ?

 

[Splitlink]

Do Spreadbetting firms take the other side of their customers trades ?, or do they simply make the bid/ask spread ?
If they take the other side, like a traditional bookie, thats a bit worrisome

I can see the tax free benefits of betting but surely paying spreads at trade entry and exit is going to eat a lot of that over time, not to mention slippage

Would most professional traders be more likely to use Direct Market Access than SB ?

I believe that they are bookies, they handle what they can manage and put the rest with the exchanges. I don't have too many illusions about the brokers, either. A lot of both types went bust during the last crisis. You take your choice. You have to buy a full contract with a broker, so you need deeper pockets. That answers your last paragraph. The word is "professional". I am not one, I prefer lower stakes and I can't say that my SB firm is so bad--I've been with the same one for a couple of decades.

 

[kalott]

its funny how it works in the real market

when you sell a stock at what you think is a high price then someone else buy it and think its cheap

maybe it works the same way with SB?

:smart:

 

[samfarrell]

its funny how it works in the real market

when you sell a stock at what you think is a high price then someone else buy it and think its cheap

maybe it works the same way with SB?

:smart:

Yeah i mean the SB prices are based on the underlying market but not necessarily exactly. I would imagine the SB firms are trading directly with an arbitrage there

 

[barjon]

Do Spreadbetting firms take the other side of their customers trades ?, or do they simply make the bid/ask spread ?
If they take the other side, like a traditional bookie, thats a bit worrisome

I can see the tax free benefits of betting but surely paying spreads at trade entry and exit is going to eat a lot of that over time, not to mention slippage

Would most professional traders be more likely to use Direct Market Access than SB ?

Competition has brought the spreads a lot tighter. You either pay a slightly wider spread with SB than in the "real" market or you pay commission to your broker using direct access. SB is cheaper when your position size is small.

 

[samfarrell]

It would be interesting to see a study comparing SB to DA
For example if we are actively trading the same markets, paying comm, fees and tax on DA, and on SB paying the spreads, who would be better off at the end of the year !