I currently spread bet mostly on Forex and commodities and would like to reduce the cost of each trade, possibly by paying a a one-off fee which would be more than made up for in svaings on severeal trades. Someone on another thread mentioned moving to DA from SB to achieve this. What is DA?
I assume it's Direct Access meaning the actual exchanges.
Spread bet FTSE or direct access FTSE on LIFFE.
No such thing as paying a one off fee to reduce comms. But comms are only part of the equation regarding costs. The bid-offer spread in my opnion is far more important (however this does depend also on how much you trade, the more trades the more critical costs are).
I don't trade spread bet FTSE but I think the spread is around 5 points.
100 trades x 5 points (SB market) = 500 points of costs, but 'no' comms
100 trades x 1 point (LIFFE bid-offer) = 100 points. Comms say £3 r/t with IB
Now work it out yourself. It's possible to make a profit AFTER paying tax with DA if you gross say 200 points of LIFFE FTSE.
But if you make DOUBLE the gross and use SB then you'll still be a loser, but of course they're still tax-free and you pay no commissions, hahahaha!
PS. Some of the workings within this example might be simplified but the process should make a lot of sense.
The other thing to note about DA is that you get access to trading software that is 10x better than what you get with the web based systems the SB companies offer.
Spread bet FTSE or direct access FTSE on LIFFE.
No such thing as paying a one off fee to reduce comms. But comms are only part of the equation regarding costs. The bid-offer spread in my opnion is far more important (however this does depend also on how much you trade, the more trades the more critical costs are).
I don't trade spread bet FTSE but I think the spread is around 5 points.
100 trades x 5 points (SB market) = 500 points of costs, but 'no' comms
100 trades x 1 point (LIFFE bid-offer) = 100 points. Comms say £3 r/t with IB
Now work it out yourself. It's possible to make a profit AFTER paying tax with DA if you gross say 200 points of LIFFE FTSE.
But if you make DOUBLE the gross and use SB then you'll still be a loser, but of course they're still tax-free and you pay no commissions, hahahaha!
PS. Some of the workings within this example might be simplified but the process should make a lot of sense.
The other thing to note about DA is that you get access to trading software that is 10x better than what you get with the web based systems the SB companies offer.
How can you tell someone that, Anley, in all conscience, when you were told by people only yesterday that it's 2 points?!anley said:
Yesterday in another thread you claimed it was 6 points and you were promptly corrected by people with more up-to-date information than you.
It's one thing to delude yourself with all your prejudices and inaccurate, out-of-date information, but to puport to advise other people asking for help in this way strikes me as really _very_ unpleasant.
I don't pretend to understand your motivation here, but certainly one could be forgiven for getting the impression that you may actually be deliberately misleading people for some reason. I very much hope that that's wrong!
dr_d_michaelson
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That's exactly how it looks to me. I am less tactful and polite than you and I openly suggest that he IS deliberately misleading people asking for help.Roberto said:
I appeal to all the better-informed and less prejudiced members to "report bad posts" every time Anley produces this opinionated cr*p and let's try to get something done about it, because it's REALLY out of hand now!
Where was I told that the FTSE spread was 2 points? And which SB companies quote 2?
Please post the url here.
Report me all you like boys but re-read the above where I spefically stated 'I think' it's around 5 points. Also the above example as I highlighted was simplified but I think the original poster will have the brains to work out what I was saying instead of jumping up and down like little schoolchildren threatening to sneak on me.
And Mich, have you answered intelligently the questions I put to you yesterday because if anyone's opinionated, it's you.
Please post the url here.
Report me all you like boys but re-read the above where I spefically stated 'I think' it's around 5 points. Also the above example as I highlighted was simplified but I think the original poster will have the brains to work out what I was saying instead of jumping up and down like little schoolchildren threatening to sneak on me.
And Mich, have you answered intelligently the questions I put to you yesterday because if anyone's opinionated, it's you.
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In post # 20 of this thread: http://www.trade2win.com/boards/showthread.php?t=13566 . You replied again to the thread not long after that (apparently quite unembarrassed by all the people pointing out that you'd got your facts hopelessly wrong, as so often).anley said:
Capital Spreads do for a start. http://www.capitalspreads.com/downloads/specifications.pdf and the product is called "Rolling Daily FTSE 100 Cash". Any good?anley said:
frugi
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Please not another SB v DA slanging match!
They both have their pros and cons and the advantage conferred by choosing one over the other will depend to an overwhelming degree on the individual's circumstances, not on the supposed intrinsic merits or drawbacks of either. There are simply too many factors involved to make an easy, direct comparison.
deal4free quote a 2 point spread on the FTSE cash in market hours.
They both have their pros and cons and the advantage conferred by choosing one over the other will depend to an overwhelming degree on the individual's circumstances, not on the supposed intrinsic merits or drawbacks of either. There are simply too many factors involved to make an easy, direct comparison.
deal4free quote a 2 point spread on the FTSE cash in market hours.
A rolling daily mkt is not the universal spread bet market that we all talk about and you both know too well what I was referring to.
For me however I'd still recommend that people trade a 1 tick liquid mkt over a 2 tick derivative of a derivative mkt even if you do have to pay tax. A 50% discount is always welcome these days and speed is a critical factor when short term dealing, and speed is certainly not what you get when you use the SB companies trading platform or telephone.
Anyway as frugi says lets not argue over pathetic points.
Let me just hope that at least my posts give newbie traders something to think about rather than the glossy brochures and fan clubs all saying tax-free is the greatest thing since slice bread.
For me however I'd still recommend that people trade a 1 tick liquid mkt over a 2 tick derivative of a derivative mkt even if you do have to pay tax. A 50% discount is always welcome these days and speed is a critical factor when short term dealing, and speed is certainly not what you get when you use the SB companies trading platform or telephone.
Anyway as frugi says lets not argue over pathetic points.
Let me just hope that at least my posts give newbie traders something to think about rather than the glossy brochures and fan clubs all saying tax-free is the greatest thing since slice bread.
Also you SB fans should remark when you tell everyone that the spread on FTSE is 2 points is that 'only for day-trading'. If you want to hold a position for a few days or even a few weeks then the spread difference goes up by hundreds of % and these costs can be a killer for many people.
This is a very critical point because as I'm sure many people are aware there are many different traders/investors in the SB market following many different time-periods.
And Mich, still waiting for you to reply to my points from this thread, you can't leave me and everyone else hanging like this.
http://www.trade2win.com/boards/showthread.php?t=13566
This is a very critical point because as I'm sure many people are aware there are many different traders/investors in the SB market following many different time-periods.
And Mich, still waiting for you to reply to my points from this thread, you can't leave me and everyone else hanging like this.
http://www.trade2win.com/boards/showthread.php?t=13566
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Hey, I didn't mean to start a fight :| . Anley told me what I needed to know. I realise I need to check the numbers and do the math to see if it's worth it but it answered my question.
The next one is can anyone recommend a specific direct access service with the best spreads or tell me how to go about opening an account? Again forex is my primary market so it would have to beat deal4free's 3 point spread on EUR/USD given that I'll be making about 1-2 trades a day that may last an average of 3-5 days.
The next one is can anyone recommend a specific direct access service with the best spreads or tell me how to go about opening an account? Again forex is my primary market so it would have to beat deal4free's 3 point spread on EUR/USD given that I'll be making about 1-2 trades a day that may last an average of 3-5 days.
the blades
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anley said:
Hi Anley,
In purely constructive mode here........
The 2pts rolling cash is just that, 2 pts. When you roll over (with CS) the only additional cost is the carry charge. From which you benefit when short.
Maybe I've missed the point here, but as someone who uses this product I'm not sure why (if) my costs are increasing the longer i hold.
All the best,
UTB
I'm also trying to avoid the usual arguments here. I'm sorry but this is simply plain wrong. It just isn't true, Anley.anley said:
Without wishing to insult you, don't you think that it might be preferable if you don't post on this subject? You don't know the basic facts and obviously you don't find them out either, before posting. (Fair comment, I think everyone must agree?).
First you say the spread is 6 points, then you're told it's 2. Then you say a day later that you think it's 5 points, then you're told by members and by a moderator that it's 2. Then you ask for proof and url's and you duly get them, to prove you wrong. Then after all of that, you STILL come back again and say something like this which, again, is completely wrong?!
It really is a bit much!
Why not just leave it, and then other people won't have to correct your howlers all the time?
Not an unreasonable request, I hope?
Roberto
Please answer this question
Trader A thinks that the FTSE will rise by 250 points between 1 Jan 2005 and 16 Feb 2005.
He'll therefore go long, say £5 a point
Which FTSE SB market would you recommend he trades and what would be the likely bid-offer spread on the SB mrkt most suited to his trading view.
Thanks
Please answer this question
Trader A thinks that the FTSE will rise by 250 points between 1 Jan 2005 and 16 Feb 2005.
He'll therefore go long, say £5 a point
Which FTSE SB market would you recommend he trades and what would be the likely bid-offer spread on the SB mrkt most suited to his trading view.
Thanks
Roberto
Another question.
It's 30th March and Trader B thinks the FTSE will rise by 100 points over the next 11 trading days.
What SB mkt would you suggest he trades and what would be likely bid-offer spread on it (+ of course any other trading fees like adjustments)
Another question.
It's 30th March and Trader B thinks the FTSE will rise by 100 points over the next 11 trading days.
What SB mkt would you suggest he trades and what would be likely bid-offer spread on it (+ of course any other trading fees like adjustments)
the blades
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anley said:
If I may, again please take in the spirit intended,
I would buy at £5 per point on the rolling cash. I would pay 1pt more than the current price. I would hold on to my bet until 16th Feb and close it, at 1 pt under the current price. It's that simple.
You may be thinking of, for example, a daily bet with IG index where each time the bet is rolled over, you incur half the spread. Thies isn't the case here.
The only other costs - an adjustement will be paid for dividend payouts - if you're long you will be credited the dividend effect X your £/pt. Vicer versa if short. Also, interest charged daily, you will pay around 6%pa interest if long and recieve about 2%pa if short (fair enough as your trading pot is now offsetting the mortgage, for example)
Maybe I read this all wrong, but anyone in CGT territory, who's a higher rate payer with a profit target above about 3pts per trade, would be better off spreadbetting.
I stand to be corrected by those more knowleagable (maybe half the planet
)UTB
Blades
My point is not about the costs of this product over that or even the mechanics of said costs.
Rather my point is simple, the cost of doing business for most traders is often the deciding factor of whether they make money over time or not.
Many people get suckered into SB because it has no comms and profits are tax-free but whereas this can be a massive advantage it can also be a major disadvantage. Nothing is free especially in the financial markets and this is why all competent traders/investors fully investigate the actual costs of one product over another, and some do this on a trade by trade basis.
Of course one cannot discount SB over say Exchange based products but if you look at one person's trading style over another then 1 product might be far better suited than another. For example as a general rule the more short term you are the more important it is to deal on products that have the tightest bid offer spread. But if you're long term and hold for many months then the importance of the cost of doing business is far less relevant.
That's my point and so I'm always surprised that people like Roberto and Mich attack me for stating this critical point. I'll say it again because even if I provoke just 1 person to think about trading in more of a general business light (controlling costs in any business is imperative) then some good will have come out of this thread.
My point is not about the costs of this product over that or even the mechanics of said costs.
Rather my point is simple, the cost of doing business for most traders is often the deciding factor of whether they make money over time or not.
Many people get suckered into SB because it has no comms and profits are tax-free but whereas this can be a massive advantage it can also be a major disadvantage. Nothing is free especially in the financial markets and this is why all competent traders/investors fully investigate the actual costs of one product over another, and some do this on a trade by trade basis.
Of course one cannot discount SB over say Exchange based products but if you look at one person's trading style over another then 1 product might be far better suited than another. For example as a general rule the more short term you are the more important it is to deal on products that have the tightest bid offer spread. But if you're long term and hold for many months then the importance of the cost of doing business is far less relevant.
That's my point and so I'm always surprised that people like Roberto and Mich attack me for stating this critical point. I'll say it again because even if I provoke just 1 person to think about trading in more of a general business light (controlling costs in any business is imperative) then some good will have come out of this thread.
Blades
Cost of doing business is your example = Spread + Interest
You've told us the spread price but what's the estmated interest cost?
1/4 FTSE bet is 6 points bid-offer with Fins.
What's the estimated total cost of your rolling bet, that's the question here.
PS. Rememebr everyone with this thread it's not just about the cost of doing SB FTSE, don't forget about the bid-offer costs with shares (and please don't quote VOD as an example), how about quoting me the bid-offer on GOOG SB versus cash
Cost of doing business is your example = Spread + Interest
You've told us the spread price but what's the estmated interest cost?
1/4 FTSE bet is 6 points bid-offer with Fins.
What's the estimated total cost of your rolling bet, that's the question here.
PS. Rememebr everyone with this thread it's not just about the cost of doing SB FTSE, don't forget about the bid-offer costs with shares (and please don't quote VOD as an example), how about quoting me the bid-offer on GOOG SB versus cash
the blades
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anley said:
Anley,
But as you've put up only a fraction of the money required, your real money is receiving interest.
For FTSE350 shares, the additional spread is <0.5% with CS, less then stamp duty alone.
For US stocks, we're into a different comparison. SB is obviously not the cheapest method for every scenario.
UTB
Blades, the SB companies aren't that generous. Yes you'll save because of money in the bank but also you'll find the SB companies are loaning you money and this comes with a charge known as the cost of carry. It's as if you'll be given a £10 note in your left pocket but your right pocket will be picked of £10 as well, ok the figures are not correct but the idea is.
And as for Stamp, true but then CFDs don't have stamp either. If you want bang for your buck them SB or CFDs it is, but why not do what most retail guys don't do and that's fully investigate ALL costs involved so you're always using your capital in the most efficient way, today it's SB, tomorrow CFDs are the best tool but the following day it might be cash stocks.
Never a right or wrong answer but those who know how to do the workings and realise the workings are important stand the best chance.
And as for Stamp, true but then CFDs don't have stamp either. If you want bang for your buck them SB or CFDs it is, but why not do what most retail guys don't do and that's fully investigate ALL costs involved so you're always using your capital in the most efficient way, today it's SB, tomorrow CFDs are the best tool but the following day it might be cash stocks.
Never a right or wrong answer but those who know how to do the workings and realise the workings are important stand the best chance.
