A couple of observations here:-
- benefits of spreadbetters I think exist if you have a small account which is what you propose because with many you can bet smaller amounts than the futures contract sizes. Examples are FTSE futures - £10 a point on Z U8 on Liffe, S&P futures ES U8 are $50 a point (far less risk than on FTSE as it is approx 20% of the size, ie 1300 vs 5500)
Therefore you would need to know the minimum sizes offered by the spreadbetters as I think they vary.
Ones I've come across are IG Index (most reliable platform), Finspreads (smaller bet sizes but I find their platform unreliable) and City Index
There are several negatives about spreadbetters but of course this is subject to your trading frequency and style as undoubtedly some people do make money on them
My issues with them are more about spread size as I mix trade between swing and intraday. They offer tighter spreads on intraday stuff (I'm sure you've seen the FTSE 1 and 2 point spread offers which to be fair are pretty good) BUT if you want to roll for a couple of days you get charged, or if you deal in the futures their spread is far higher (6 points on FTSE). If you're not fiddling and getting in and out that's fine but believe me you'll be less inclined to fiddle if you're got to pay 6 points each time you do it.
FTSE futures through a broker have a spread of between 0.5 and 1.5 (normally 0.5 but they do widen around some events) and you'll be charged around 0.3 points comm for a round trip so probably costs you 1 point. You can see the case for spreadbetters on FTSE for intra day here
S&P. I think the spreads here are far worse all around, but esp by the sbs. The futures market moves in 0.25 increments (a ripoff IMO but that's irrelevant) and the spread is 0.25. Through a broker you can expect to add 0.1 in commissions to get to 0.35 total.
SBs for the futures charge between 0.8 and 1.00 and for the intraday stuff they're better but I'm not sure.
My other big point is functionality. If the market is trading at 1306 and I want to stop sell 1304 or limit sell 1307 not sure I could easily do this on many sb platforms but this is easy with brokerages. Finspreads I know have a range around the current price that you're not able to use with limits and stops. I suspect that IG are better but then they charge more
Tax - a total distraction. No offence but if you're starting and turn consistenty profitable in your first 6 months then you've probably beaten 80% of the successful traders out there and only 10% or so are successful, ie you'll be amazing. Really wouldn't worry about that.
The two most popular brokerages I think are IB and tradsetation. I use IB and get on with them just fine, others love tradestation and I know that tradestation has a load of built in analytics for free. These guys are cheap and reliable and I would recommend any beginner to use these rather than SBs with the only exception noted above - if the instruments that you want to trade are too expensive for your account and you can trade smaller with a SB.
I think the rule here would be to check out the different options based around your trading style.
good luck
Pad
