IG Index or IG Markets??

[andys0506]

Hi,

Question: I currently have a controlled risk account with IG Index where I am spreading currencies at £1 pip.
Is there any advantage in me switching to IG Market and trading the mini contract which seems to equate to the same amount ish?
Are the prices more accurate on IG Markets and will I be safer from being stopped out by wild inaccurate price spikes?

Is IG Markets just a ploy by IG to get more professional currency traders on board?

Thanks

 

[N Rothschild]

you will pay tax on cfd trades. and if you want to trade actuall fx lots try an fx broker like fxcm or oanda

 

[andys0506]

Ok so should i stick to speadbetting with IG Index as all 'wins' are tax free?

 

[N Rothschild]

technically yes but if its your only source of income her majesty finest might have something to say about it

 

[UKtradergirl]

technically yes but if its your only source of income her majesty finest might have something to say about it

I'm not 100% sure but i think that if 'gambling' is your only/main source of income then you have to pay tax on it- it becomes a taxable income.

 

[N Rothschild]

thats what i was meanimg

 

[UKtradergirl]

I'm not 100% sure but i think that if 'gambling' is your only/main source of income then you have to pay tax on it- it becomes a taxable income.

I just did an online search... not much to be found, it does seem to be a bit of a grey area, but i did find the info i've posted below. It looks like if you 'gamble' full time then its probably a good idea to seek the help of an experienced accountant- and then, if it were me i would still put some money on one side just in case the tax man turned up with a big bill!

Income Tax

One reason arises from the fact that income tax systems are generally progressive. Thus, one-off, irregular receipts (such as a gift or a lottery win) would be taxed at the maximum marginal rate in the year in which it was received rather than the rate which would apply if the amount was averaged over a number of years. This would seem to be unfair. The inclusion of gambling winnings would be impractical as well as potentially inequitable since it would require people to be able to claim gambling losses off their taxable income in years in which they lost. This would be impossible to check. If the amounts claimed were correct, including gambling outcomes as income could, again because of progression in the tax system, lead to people paying higher rates of tax on winnings than the rates which applied to their deductions for losses. The result is that gambling winnings and losses are excluded from taxable income everywhere. An exception to this is the case of professional gamblers (someone who obtains a significant part of his/her regular income from gambling). But what constitutes significant?

One interesting example of an attempt to differentiate between casual and professional gambling relates to government Premium Bonds. These pay no interest but from a monthly draw prizes are paid out (with a top prize of £1 million). In one sense, this is gambling and is equivalent to the lottery even though one is only gambling with interest payments foregone. On the other hand, since some one with large premium bond holdings can expect fairly regular small prizes in lieu of interest, it can be seen as an alternative to other forms of saving which are taxed. The response of the government has been to place a limit on the total value of Premium Bonds which any one person can hold (currently the limit is £20,000). The assumption, therefore, is that gambling the interest on £20,000 is not professional gambling and escapes tax but that gambling more than that sum would be held to be professional gambling.

 

[Trader333]

I'm not 100% sure but i think that if 'gambling' is your only/main source of income then you have to pay tax on it- it becomes a taxable income.

There has been a lot of discussion about this in the past. In my view all proceeds gained from gambling in the UK are free of tax and therefore do not need to be declared.


Paul

 

[andys0506]

Thanks but what I was getting at was whether IG Markets are a better vehicle to use than IG Index for currency trading. I would be trading the mini fx contracts at around 1 or 2 contracts (ie approx $1 pip)

 

[longzhan]

I can not apply for a standard account with igindex uk because of my annual income not meeting their requirement .Can i apply for a standard account with igforex.com or igmarket uk ? I do focus on forex! any difference betweeen them? thanks

 

[BJ21]

Thanks but what I was getting at was whether IG Markets are a better vehicle to use than IG Index for currency trading. I would be trading the mini fx contracts at around 1 or 2 contracts (ie approx $1 pip)

In terms of "Vehicles" 1 is spreadbetting (IG Index) and the other is CFD Spot trading (IG Markets/Forex) Dont bother with IG Forex it's identical to IG Markets minus the deal through charts thing they have and is only limited to FX .....

If you buy cable on a spreadbetting account at £1 a pip ....you put in a stop say £25 so the most you lose is £25 (on a limited risk account)
If you buy cable on forex account ... say 1mini lot (10K units) same as £1 a pip you need to place a margin which is 2% (not too sure) of the contract units but this can be lowered by placing stops on IG ..ie: increase your leverage ...........................

I just pulled this from the website ...

It is 29 July 2008 and you decide to go short of the euro against the dollar. Our quote is 1.5742/1.5744, and you sell 5 contracts (the equivalent of E500,000) at 1.5742.

The value of your position is E500,000 x 1.5742 = $787,100. To open the position you supply a deposit of just 2% of the position. Your deposit is therefore 2% x $787,100 = $15,742. .......

this has nothing to do with a stop .....you will also recieve maintaince calls ect.....to keep the trade alive if it moves against you and be sure to have this in your account otherwise they will close you out


u know what just look it up ....loads of info on the site

You need to run both vehicles for yourself and see which you like !! for forex i use FXCM but i also scalp indices and for that i do use IG Index ....

Oh and thanks for killing 10mins of my time i was so bored !!

 

[ZEPPO]

I can not apply for a standard account with igindex uk because of my annual income not meeting their requirement .Can i apply for a standard account with igforex.com or igmarket uk ? I do focus on forex! any difference betweeen them? thanks

Why don't you go for a limited risk account, then? There should be no problem.

Eduardo.

 

[longzhan]

Why don't you go for a limited risk account, then? There should be no problem.

Eduardo.

there is a extra charge (wider spreads ) for opening a trade comparing with the standard account ! i thinks it is no need for me!

 

[ZEPPO]

there is a extra charge (wider spreads ) for opening a trade comparing with the standard account ! i thinks it is no need for me!

Yes there is but also you know how much money you are risking; if your income is a limited one, you are greatly reducing your risk! Think about it!

Eduardo.

 

[UKtradergirl]

Yes there is but also you know how much money you are risking; if your income is a limited one, you are greatly reducing your risk! Think about it!

Eduardo.

In a situation where you have to trade on wider spreads, you need to take a longer term trade in order to maximise your profit. Instead of planning to hold something for say, 1 or 2 hours, look at holding for 2 or 3 days at least.

 

[longzhan]

Yes there is but also you know how much money you are risking; if your income is a limited one, you are greatly reducing your risk! Think about it!

Eduardo.

thanks for your kindness！I am a swing trader ,never hold a trade for more than 5 mins,so i can avoid a wave! the guarantee stop loss looks like useless to me!

 

[ZEPPO]

In a situation where you have to trade on wider spreads, you need to take a longer term trade in order to maximise your profit. Instead of planning to hold something for say, 1 or 2 hours, look at holding for 2 or 3 days at least.

Yes, that's the idea, to swing trade holding positions over a period of several days.
I never understood the concept of day trading with a spreadbetter - spreads are too wide, and anyway, they tend to move the goalposts, that is, increase/decrease prices in relation to the underlying, in direction of the trend.
I have found some days with a difference of up to 50 points in the FTSE100 between underlying and SB quote on market opening.
Besides, they can (and do!) delay the trade until it goes against you.
Don't know how you can trade intraday like that, really; better trade the futures with a broker straigth away.

Eduardo.