Better than spread betting?

[Unicorn77]

Hi all, so im kind of new to the sharetrading, and after sharebetting for a few days it seemed like the best thing i've seen, no fees, not tax etc

but i've noticed when i've been trading theres been a big gap between the bid and offer price, at one point and still is a gap of 20 points on UK100!

Is this right? does it happen like this on the stockmarket? i mean, who would say...yer the shares are going for 5,692 so ill offer to get them at 5,712? is this a sharebetting way of the company to get lots of commision and make you lose out instantly? or would this be exactly the same on the stockmarket?

I'm starting to look into CFD's, yes i know they charge commision and Stamp duty, but this would seem like a more worthwhile option.

I've set up at demo account on IG markets and that proves my suspicions, even looking at Barclays, on the sharebetting the sell is 264.41 and the offer price is 270.13, while on the IG demo it is 267 to sell or offer.

now these are very big margins, even being a novice i know this.

does any of the above seem true to anyone else? or am i missing something? would CFD's be a better option or am i missing something? has anyone got any advice about this topic?

thanks, Jon

 

[rawrschach]

It's called the spread, and is basically the cost of placing the trade.

 

[Vaco]

welcome Uinicorn,

Let me try and answer some of your questions, i believe the spread was wider because you were looking at the ftse out of hours, as i dont believe ftse futures trade outside of normal trading hours your spreadbet company can make the spread as wide as they like.

Secondly spreadbetting is based on an underlying market but the prices will not be the same, sometinmes they will be above sometimes they will be below and the spread will always be wider. There is no fixed % of how much the price will be out by it is at the spreedbets discresion.

As for CFDs, I trade them with cmc and there is no stampduty or commision to pay.

 

[Spreadex]

Hello Unicorn77,

It seems to me like a very wide spread. The FTSE 100 has recently extended its opening hours for the futures. So now it trades between 8 am and 9pm so even the out of hours reason seems unlikely.

Typically if you are trading a daily or near month future contract on the FTSE 100 something between 1 tick and 4 ticks is common.

If the company you are looking at has a wider spread than that you probably dont want to consider them.

Spreadex Trader.