Spread Betting v Direct Access - The Annual Revisit

[the blades]

This is the sort of answer I would expect from someone who has just opened a spred bettin' account with the pocket money his mummy gave him rather than a real trader. .

my god, why not just write "liar liar pants on fire" and have done.

You request that people argue their case in a professional manner, then litter every post with juvenile side swipes at anyone who chooses to spreadbet. And elsewhere you champion your hatred of Hypocrites. Hmmm.

UTB

 

[2be]

This thread has lost its way long time ago, and I would like to wish all many profitable trades whether on DA or spredbetting platform.
There is still an undiscover wander of the world, "satisfied taxman", when you find one you deserve 10 T2W reputation points.

 

[Hoggums]

Exactly the sort of question a spred betta would ask.

Tell me, exactly, what does the MARKET price of an instrument mean?

Don't google for the answer!

In order to sort out wheat from chaff you have to know what wheat AND chaff are, don't you?

Well I'm quite happy to stay unprofessional in your opinion. I trade SB purely for tax reasons and all things being equial I would switch to DA - but they are not in my opnion. I fully understand that I trade the SBs market - not the real market and as such I'm subject to their whim. BUT - the SBs market and the real market are very closely correlated which enables me to trade it as I would the real market. Yes an SB can skew the price according to it's own supply/demand but I know that it won't last long as the SBs need to keep the correlation otherwise they would lose customers in droves.

I get the impression you are a day trader nt which I totally agree you can't use an SB for. However I am not, my trades last from hours to days, and as such the SBs market tricks are of little consequence to me. My trade sizes are relatively small to my capital so I accept a few pips skewed/lost here and there. What I don't accept is having to give back 40% of my profits to the taxman.

 

[new_trader]

Well I'm quite happy to stay unprofessional in your opinion. I fully understand that I trade the SBs market - not the real market and as such I'm subject to their whim. BUT - the SBs market and the real market are very closely correlated which enables me to trade it as I would the real market. Yes an SB can skew the price according to it's own supply/demand but I know that it won't last long as the SBs need to keep the correlation otherwise they would lose customers in droves.

I get the impression you are a day trader nt which I totally agree you can't use an SB for. However I am not, my trades last from hours to days, and as such the SBs market tricks are of little consequence to me. My trade sizes are relatively small to my capital so I accept a few pips skewed/lost here and there.

OK, fair enough. But all I asked was for a definition of what market price is, that's all. One spred betta has given up and left the thread without answering...lucky I didn't hold my breath..

I am not talking about 'price skew' or any other S/B practices. I wanted to see if people who claim to be professionals can give professional answers to questions that matter when it pertains to trading, in ANY time frame but the answers I keep getting is "it's tax free"..

I don't know if S/B co's skew the price, what I am actually referring to is a complete absence of essential information. This is why I say S/B is non-professional. They provide what they think you need to know and, from what I read in these forums, 95%+ of people trading think it's all they need to know.

 

[jasy22]

Well I'm quite happy to stay unprofessional in your opinion. I trade SB purely for tax reasons and all things being equial I would switch to DA - but they are not in my opnion. I fully understand that I trade the SBs market - not the real market and as such I'm subject to their whim. BUT - the SBs market and the real market are very closely correlated which enables me to trade it as I would the real market. Yes an SB can skew the price according to it's own supply/demand but I know that it won't last long as the SBs need to keep the correlation otherwise they would lose customers in droves.

I get the impression you are a day trader nt which I totally agree you can't use an SB for. However I am not, my trades last from hours to days, and as such the SBs market tricks are of little consequence to me. My trade sizes are relatively small to my capital so I accept a few pips skewed/lost here and there. What I don't accept is having to give back 40% of my profits to the taxman.

Spreadbetting firms are no different to forex brokers, who also skew the price even my broker, FXCM says this goes on, Check their website.

Jesse Livermore made more money with bucket shops, than with Wall Street brokerages, becuase of excessive slippage, he never knew at what price his order would get filled at, the bucket shops spreads were wider, but at least he new what the price would be and could plan better.

Dr Elder the Author of Trading Physchology even says the futures floor traders add 10-20
pips slippage to orders and make a killing out of it, it also happens on NYSE.

Stick to spread betting my friend because no banks or brokers can be trusted in this game, 40% tax is too much.

 

[Hoggums]

OK, fair enough. But all I asked was for a definition of what market price is, that's all. One spred betta has given up and left the thread without answering...lucky I didn't hold my breath..

I am not talking about 'price skew' or any other S/B practices. I wanted to see if people who claim to be professionals can give professional answers to questions that matter when it pertains to trading, in ANY time frame but the answers I keep getting is "it's tax free"..

I don't know if S/B co's skew the price, what I am actually referring to is a complete absence of essential information. This is why I say S/B is non-professional. They provide what they think you need to know and, from what I read in these forums, 95%+ of people trading think it's all they need to know.

Yes it would be great to see the SBs volume & order book including stops. One would think you could make a killing. However it would also be tricky to trade because the "market" would not trade according to what's on that book as it is linked to the real underlying, whose L2 data might be completely different.

Anyway this is going far beyond my experience as I have not traded using L2 data. It is something I would definitely study if I was to go full time, but stuck in an office I don't have access or the time.

 

[FXSCALPER2]

'Professional', hehe. What is that, anyway? I have an account with IB and one with IG. My 20 pips from IB are professional and the 20 pips from IG are not. I have to make sure to keep them apart.

I mean, seriously. Don't you wonder why some people are obssessed with this subject and keep telling us we are gamblers?

It is amusing though, I have to admit.

 

[ucbestp]

dude, i'm starting to get dconvinced that you've never set foot on a trading floor. Do you not realise that what we're explaining is actually beneficial to you....or are you just bitter that you have to pay tax on your pnl and stamp duty.....and hence is that why you're trying to convince people with your "unprofessional","you're not a real trader" quotes....i mean, mate...sort yourself out.

 

[grantx]

FSA protection does not extend to SB's clients' funds - you join the queue of creditors if it goes down. The FSA regulation applies only to treating customers fairly, which means Jack Sh1t.

Grant.

 

[Aspire]

Not sure I should be getting involved here but feel like sharing my opinion.

In my mind anyone who makes their living from the markets is a professional regardless of how it's done. You can be a professional trader trading actual contracts/ shares or you can be a professional spreadbetter.

As for which is better you simply have to work out which is more efficient for you and your style of trading. Calculate how much extra you would be paying in spreads/commissions by spread betting and subtract this from what your tax bill would be going direct access. If the result is negative then you should be D.A., if it's positive then you should be spread betting.

Some one making 10 long term trades per year and making £250k is going to be far better off with spread betting while someone doing 20,000 round trips per month for the same income should be D.A. They are both professionals.

 

[0007]

Not sure I should be getting involved here but feel like sharing my opinion.

In my mind anyone who makes their living from the markets is a professional regardless of how it's done. You can be a professional trader trading actual contracts/ shares or you can be a professional spreadbetter.

As for which is better you simply have to work out which is more efficient for you and your style of trading. Calculate how much extra you would be paying in spreads/commissions by spread betting and subtract this from what your tax bill would be going direct access. If the result is negative then you should be D.A., if it's positive then you should be spread betting.

Some one making 10 long term trades per year and making £250k is going to be far better off with spread betting while someone doing 20,000 round trips per month for the same income should be D.A. They are both professionals.

Agree - been meaning to say the gist of this for a while. It's results wot count!

 

[new_trader]

Not sure I should be getting involved here but feel like sharing my opinion.

In my mind anyone who makes their living from the markets is a professional regardless of how it's done. You can be a professional trader trading actual contracts/ shares or you can be a professional spreadbetter.

As for which is better you simply have to work out which is more efficient for you and your style of trading. Calculate how much extra you would be paying in spreads/commissions by spread betting and subtract this from what your tax bill would be going direct access. If the result is negative then you should be D.A., if it's positive then you should be spread betting.

Some one making 10 long term trades per year and making £250k is going to be far better off with spread betting while someone doing 20,000 round trips per month for the same income should be D.A. They are both professionals.

Aspire,


I did explain earlier that giving hypothetical arithmetical examples isn't evidence of anything. But this is all I keep getting from spred betta's. Oh, and that they make money spred bettin'!!

Someone making £10million/ year trading DA and paying tax is better off than someone making £250k tax free through spred bettin'...therefore I win the argument!!

good tradin' to ya dude!

 

[gfrost]

Where do you get 40% from ?
The Uk capital gains rate from April 2008 is 18%, the first £9,600 is tax free.

The main concern I have with SB's, is that, if they are "making a book" rather than laying it off, it's in their interest for you to lose, wheras a DA broker wants you to win to carry on making commisions for them.

I can see some of you are struggling to see the differences between investing and gambling, that's easy - It's investing if you win, and gambling if you lose

 

[counter_violent]

Who's pulling your strings newt_rader ?

I mean you can't think this rubbish up on your own....hmmm on second thoughts ....and whats with all this fishing for answers without providing anything in the way of an answer yourself....come to think of it, have you ever posted anything constructive on these boards...ever ?

As for S B and D A .....the only message i'm getting here is to do with snobbery....plain and simple................AMATEUR.... LOWLIFE.... S B'ers.

The right answer to this debate by the way is very simple.....USE BOTH......they each have advantages.

 

[the blades]

Who's pulling your strings newt_rader ?

I mean you can't think this rubbish up on your own....hmmm on second thoughts ....and whats with all this fishing for answers without providing anything in the way of an answer yourself....come to think of it, have you ever posted anything constructive on these boards...ever ?

As for S B and D A .....the only message i'm getting here is to do with snobbery....plain and simple................AMATEUR.... LOWLIFE.... S B'ers.

The right answer to this debate by the way is very simple.....USE BOTH......they each have advantages.

exactly. It's not difficult.......for most.

Socrates' puppet's ability to exclude the tax free element from the debate is laughable. It's very obvious that, as you describe it, pure snobbery clouds the judgement of otherwise intelligent individuals. Oh, and new-trader.

UTB

 

[Hoggums]

If you gave Nigel Kennedy a £100 violin would he no longer be a professional if he played it? He would make great music whatever the instrument. If you sold his Strad to a beginner are they suddenly going to be professional? NO - but they would waste a whole lot of money finding out that they could probably never learn to play.

I think the "SB is rubbish" posters miss the whole point of this site - which is not a bunch of professionals discussing in depth trading strategies, most are amateurs hoping to boost income, now and in retirement. Most people don't have enough money to open a direct access account with live market data feeds.

Everyone has to start somewhere - and in my opinion SB is the best option due to the money required to open and account and the minimum trade sizes.

Advising someone that you should never use a SB and opening them up to huge losses they can ill afford is in my opinion wholly irresponsible.

Everything has its place.

 

[ucbestp]

Agreed....new trader dude, you're embarrassing yourself.

 

[the blades]

If you gave Nigel Kennedy a £100 violin would he no longer be a professional if he played it? He would make great music whatever the instrument. If you sold his Strad to a beginner are they suddenly going to be professional? NO - but they would waste a whole lot of money finding out that they could probably never learn to play.

I think the "SB is rubbish" posters miss the whole point of this site - which is not a bunch of professionals discussing in depth trading strategies, most are amateurs hoping to boost income, now and in retirement. Most people don't have enough money to open a direct access account with live market data feeds.

Everyone has to start somewhere - and in my opinion SB is the best option due to the money required to open and account and the minimum trade sizes.

Advising someone that you should never use a SB and opening them up to huge losses they can ill afford is in my opinion wholly irresponsible.

Everything has its place.

what's more - even with a relatively large account, the exposure most futures contracts have make it difficult to trade indices, currencies commodities etc etc at the same time.

80% of my activity is through DA into stocks and futures contracts, but spread betting will probably always be a valuable compliment.

UTB

 

[new_trader]

I think the "SB is rubbish" posters miss the whole point of this site - which is not a bunch of professionals discussing in depth trading strategies, most are amateurs hoping to boost income, now and in retirement. Most people don't have enough money to open a direct access account with live market data feeds.

I say spread betting is non-professional and I am attacked with abuse and diatribe, you say the above and get reps. I find this impossibly funny!

Everyone has to start somewhere - and in my opinion SB is the best option due to the money required to open and account and the minimum trade sizes.

Advising someone that you should never use a SB and opening them up to huge losses they can ill afford is in my opinion wholly irresponsible.

Everything has its place.

Unfortunately this thread was split and you missed what I said in the original. I actually said the advantage of spred bettin' is the low barrier to entry.

http://www.trade2win.com/boards/439078-post56.html

I started out spred bettin' and still have two accounts which I occasionally use, so I don't know why people take what I am saying so personally...go figure...I know what's what now but I would never have figured it out through spred bettin alone because you are not given what you need to make a fully informed decision, it's that simple, and no simpler. This is a fact, not an opinion, do you see?

After reading the following thread you need to ask yourself if a low barrier to entry is actually a benefit or a hazard to newbies.

http://www.trade2win.com/boards/uk-indices/32629-trading-ftse-1-per-pip-3000-pip-stoploss.html

The problem with having such a low barrier to entry is (and I paraphrase a professional trader) the quantities are so absurdly small they invite careless execution of trades. The problem is newbies don't want to paper trade, they don't want to study and they don't want to practice. They just want to make money as quickly as possible. There probably aren't many newbies reading this thread because it doesn't have the words "System", "Strategy" or "Money" in the title.

Good tradin' to ya dude!

 

[Aspire]

Aspire,


I did explain earlier that giving hypothetical arithmetical examples isn't evidence of anything. But this is all I keep getting from spred betta's. Oh, and that they make money spred bettin'!!

Someone making £10million/ year trading DA and paying tax is better off than someone making £250k tax free through spred bettin'...therefore I win the argument!!

good tradin' to ya dude!

That is one of the stupidest posts I have ever read!! Try reading what I wrote properly, preferably with your brain engaged.

For starters I was not arguing in favour of either spreadbetting or direct access just stating the FACT that each can be more efficient in the right situation and giving an examples of what these situations could be. I have never personally placed a spread bet, I have only ever used D.A. and my style of trading could not be done any other way. You have not won the arguement with me - I was never arguing against D.A. and my ego isn't fragile enough that I have to argue that I'm any better for not using S.B. I was never arguing - They both have their places.

You say that hypothetical arithmetical examples aren't evidence of anything and then straight after claim to "win the arguement" with one

Someone making £10million/ year trading DA and paying tax is better off than someone making £250k tax free through spred bettin'...therefore I win the argument!!

and.... umm... someone making £10 million/ year spread betting is better off than someone making £250k trading D.A..... So what!!??!