Best share spread betting account?

khampson

Hi I am wanting to start spread betting in stocks and shares. To begin with I am only looking at small amounts les than £20 per deal. I have tried a demp offered by plus500 and enjoyed it. What is the best company to open a spread betting account with? I know plus500 dont charge fees but do make you pay a small premium fee if you still have an open bet at the close of play. I have only ever used plus500 so I have no knowledge of other products or fees of other companies so please can you assist?

Keith

bigfreddiel

khampson wrote: »

Hi I am wanting to start spread betting in stocks and shares. To begin with I am only looking at small amounts les than £20 per deal. I have tried a demp offered by plus500 and enjoyed it. What is the best company to open a spread betting account with? I know plus500 dont charge fees but do make you pay a small premium fee if you still have an open bet at the close of play. I have only ever used plus500 so I have no knowledge of other products or fees of other companies so please can you assist?

Keith

doesn't really matter - in the long run you'll lose everything

take my advice for free - don't waste your time or money

fj

khampson

Why is that?

bigfreddiel

khampson wrote: »

Why is that?

whats your winning strategy then - do you know more than the 'experts' because even they don't know - take the gov of boe - can't even forecast rate of inflation - and he controls it!

fj

BLB53

I believe IG Index are the best and have a great site and lots of info for beginners.

Whether you can make a profit from trading is another matter - some can, many can't!

khampson

bigfreddiel wrote: »

whats your winning strategy then - do you know more than the 'experts' because even they don't know - take the gov of boe - can't even forecast rate of inflation - and he controls it!

fj

May be just luck? I looked at the trends. I did well on netflix.

khampson

Will I be better off buying a full shares?

bowlhead99

I like IG too.They are a quality outfit, I bought shares in their IPO which did well, though I no longer hold them. The platform is good (including mobile app) and the spreads are not uncompetitive compared to rivals.

In the past I have had Finspreads and Cityindex accounts though neither of them are active anymore as IG meet my needs just fine. At one point my City account was only being used because IG didn't take bets on their own share price...

Spreadbetting can have a valid place in an investment strategy though clearly it can be high risk because it's on margin. No worse than CFDs and has tax benefits. Also allows guaranteed stops if you pay a premium, which you can't get on the real share itself.

I don't buy the idea that "in the long run you'll lose everything". This is simply not true. If someone were literally 'betting' as if they were in a casino, with a rollercoaster of 'wins' and 'losses' unil they go bust, then yes you may be right. If someone is shorting a stock or an index or going long on a currency pair or buying an option in odrer to hedge a 'real' investment or cash position, the idea that this must be doomed to failure is simply naivety.

I am not sure that the fact that the Governor of the BOE is unable to predict or control consumer prices within a percent per annum is an indicator that you can't make money on the markets. If I buy the September 2013 FTSE 250 index does this make me an idiot? It does? So, what if I short it? Am I still an idiot? What if I get out of the market and hoard cash - does that make me an idiot? Am I only allowed the view that shares all go up in the long term and the only valid investment is a broad-based index tracker with a 5-10 year outlook?

Having said all that, I tend to agree that someone who makes money on a demo account by 'watching the trend' and luckily buying Netflix at the right time, is unlikely to make his fortune with a real money spreadbetting account.

bigfreddiel

khampson wrote: »

Will I be better off buying a full shares?

just buying shares won't work either, you need to have some sort of methodology for your share seletion, you need to have ab overall aim, and then evaluate which shares will benefit your overall plan.

for example are you investing for income, growthor both,in a sipp or an isa?

do you undertstand portfolio theory, are you a passive investor or a day trader?

are you in it for the long term?

can you stomach a 20% fall in your portfolio value?

answer those questions and you may be able to decide what you want to do

cheers

fj

Nomad2006

Another vote for IG from me, for me it's the most professional feeling of all the firms I've tried. I also love the range of markets, particularly in options.

The most important thing with spread betting is to always understand the real size of the position you're taking - sometimes when everything is expressed in £ per point, it's easy to get divorced from this and get yourself into excessive leverage. When you go long £10 a point on the FTSE for example, you need to be comfortable that you've just put £63,000 in the stock market, with all the same risks as a real money position in a tracker fund.

So long as you keep that in mind, spread betting can be a very useful tool. I would only ever have a relatively small portion of my funds in a spread bet account though, and also make sure to have plenty of liquid funds available to meet margin calls.

grey_gym_sock

glad to see all the support for IG, since i hold the shares

i wouldn't encourage anybody to use spread betting. my own investments are all just buying shares and funds. is it idiotic to do anything else? well, not necessarily. but what i would avoid doing is pursuing a strategy which will be a disaster if i turn out to be an unskilled investor. (in investing, how good 1 is or isn't may not become clear for decades.)

an important part of that is keeping costs low. suppose the market is giving a real return of 4% per year. suppose i trade frequently, incurring additional costs of 2% per year, in search of higher returns. but that in the long run, i turn out to be just average (never mind below average) at picking shares. well, then i've just thrown away half the real return i could have made.

certainly 1 thing you ought to be aware of with spread betting is how much it's costing you to keep a position open. how it compares to buying the underlying share/investment. how that cost varies depending on the holding period. spread betting will generally be more cost-effective for shorter holding periods.

i said i wouldn't encourage anybody to use spread betting. it's not that it's necessarily a mistake for everybody. it's more that anybody doing should first have a clear idea about where they stand on all the issues raised in this thread, and a few more ...