Share Dealing Discussion Area

Toki

I am relatively new to buying individual shares and am interested in the best way of doing this.

I know buying shares attracts 0.5% stamp duty and then there's a spread from the buy and sell price.

I have a spread betting account with Tradefair which I have used for trading the FTSE100 but want to move on to individual shares now.

For example African Barrick Gold with a June expiry trades at 583.1p to 585.7p just now on Tradefair. Approx 0.6% spread.

All shares have a spread on top of the stamp duty in ABG for example this is 0.5p or 0.08%. Also there is the charge of buying and selling shares. Then there is capital gains tax on top of this if you go over the threshold. Taking this into account is spread betting the best, most tax efficient way of buying shares?

I appreciate spreads do vary from one company to the next along with spreads supplied from each spread betting company but in this example am I right? Are there any other taxes / charges I should be aware of?

Another example is Lloyds trading at 62p - 62.3p, less than 0.5% spread, again surely better than buying the actual share?

Thanks in advance.

Biggles

Toki wrote: »

All shares have a spread on top of the stamp duty in ABG for example this is 0.5p or 0.08%. Also there is the charge of buying and selling shares. Then there is capital gains tax on top of this if you go over the threshold. Taking this into account is spread betting the best, most tax efficient way of buying shares?

No, it's arguably the worst.

The spread is wider and you need to pay financing costs if you want to keep the investment for the long term.

As you point out, the spread on ABG is far less with the share than with the spread bet, and with Lloyds it's only 0.03% or less for the share, as opposed to 0.5% for the spread bet.

If you want to bet on margin for the reasonably short term in order to acquire more shares than you actually have funds for, spread betting could be the way to go. You also need to be prepared to lose more money than you are staking.

But, if you are investing for the long term and looking to limit your risk somewhat, an execution-only broker is what you need. If you are concerned about CGT, use a broker's ISA account.

Toki

Biggles wrote: »

No, it's arguably the worst.

The spread is wider and you need to pay financing costs if you want to keep the investment for the long term.

As you point out, the spread on ABG is far less with the share than with the spread bet, and with Lloyds it's only 0.03% or less for the share, as opposed to 0.5% for the spread bet.

If you want to bet on margin for the reasonably short term in order to acquire more shares than you actually have funds for, spread betting could be the way to go. You also need to be prepared to lose more money than you are staking.

But, if you are investing for the long term and looking to limit your risk somewhat, an execution-only broker is what you need. If you are concerned about CGT, use a broker's ISA account.

Many thanks for your reply. I have had a spread betting account for a few months now and do appreciate the risks involved.

I understand for the long term buying actual shares would be beneficial but if I wanted to buy ABG for a number of weeks, no longer than June does this not work out cheaper than buying the shares?

For example, I buy £5,831 via spread bet, £10 per point using my original example spread price, the cost to me is £26. However if I buy via an execution only broker the cost to me would be 0.5% stamp duty + 0.08% spread plus say £7 to buy via broker and £7 to sell which would equal £29.15 + £4.66 + £7 + £7 = £40.81

Please feel free to correct me if I'm wrong with the calculations above. Is buying shares for the long term still the best option do you think?

Thanks again.

sabretoothtigger

100 RKH shares cost:

£235.25 + 1.50 commision + 1.18 stamp

237.93


Spreadbet
235.47 with 2p daily charge

Upto 123 days its cheaper to buy with a spreadbet. They both have a spread, the artificial one has more spread to give them profit

Nikel

Whats up with Sareum Holdings Plc (Public, LON:SAR) today!? Up 100%. Isnt this one of the stocks danny what-is-name bought? The guy that went way overdrawn? I hope for his sake he didnt sell as we were screaming to,....

Biggles

Nikel wrote: »

Whats up with Sareum Holdings Plc (Public, LON:SAR) today!? Up 100%

If you have an interest in a share, always a good idea to check the Stock Exchange announcements.

Research Update: Positive Chk1 Programme Model Studies Sareum, the specialist cancer drug discovery business, is pleased to announce positive results from pre-clinical in-vivo efficacy studies from their joint research collaboration with Cancer Research Technology Limited ("CRT") and The Institute of Cancer Research ("The ICR").

A recent colon cancer pre-clinical model study carried out by The ICR demonstrates that the combination of a collaboration Chk1 inhibitor, dosed via the oral route, in combination with a chemotherapeutic, gemcitabine, demonstrates a greater than two-fold reduction in cancer growth rate compared to treatment with the same dose of gemcitabine without the Chk1 inhibitor.

Further pre-clinical in-vivo studies for the programme show that the collaboration Chk1 inhibitor, dosed alone, can reduce cancer growth in models of AML (acute myeloid leukaemia) and neuroblastoma (a childhood cancer). Certain cancers, such as these, are believed to be dependent on Chk1 for survival.

The joint research collaboration with the ICR and CTR targets Chk1 (Checkpoint Kinase 1). Chk1 is important in controlling a cancer cell's response to DNA damage, which may be a consequence of the cancer itself, or intentionally caused by chemotherapy or radiotherapy.

Sareum's CEO, Dr Tim Mitchell, commented:

"These are exciting advances, demonstrating efficacy of our Chk1 compounds in several cancer models. Studies on additional models are on-going. We believe the results from the recently conducted studies will significantly enhance the licencing package and assist the collaboration in selecting the best compound for development into a clinical trials candidate".

sabretoothtigger

Fellow FTSE 100 member Petrofac is also declaring full year figures on Monday. Charles Stanley reckons profit before tax will rise from 2009’s $448m to $543m, while EPS is tipped to advance to 77p from 64p. Market consensus is for EPS of 80.07p. Charles Stanley has pencilled in a full year dividend of 27p (consensus: 28.41p), up from 22.5p last year.

Events in North Africa and Asia will have had an effect on the oilfield services company’s operations, as they already have had on its share price.

“Petrofac has six strategically located operational centres, in Sharjah, Abu Dhabi, Chennai, Mumbai, Aberdeen and Woking,” Charles Stanley notes.

Apart from political risks, the broker thinks the focus of Monday’s results will be on the group’s “tremendous order book” and on strategy, as investors have become more concerned about the direction in which the business is moving.

“Towards the end of 2010, Petrofac acquired a 15% stake in Seven Energy, which is based in Nigeria. Petrofac’s investment was $100m and its plan is to assist Seven Energy with the development of its production, processing and transportation assets. This move into more upstream activities especially in another politically unstable area was not well received,” analyst Tony Shepard said.

Monday March 07 

INTERIMS 
3D Diagnostic Imaging 

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Stavert Zigomala 

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Frontline Ltd. 

GMS 
ValiRx 

FINALS 
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Tuesday March 08 

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Q3 
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Impax Asset Management Group, New Europe Property Investments, Pressure Technologies, Sage Group

granny587

Can anyone help?
I have just found a paper share certificate for a US listed Stock.
How can I sell these shares?
Thanks!

sabretoothtigger

Try halifax or td waterhouse

Monday March 14 

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Tristel 

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Impala Platinum Holdings Ltd. 

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News Corp. 'A' Shares 

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Tuesday March 15 

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Air Partner, Close Brothers Group, St Ives 

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Cash Converters International Ltd. Units 

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Q3 
Real Estate Credit Investments Ltd. 

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First Quantum Minerals Ltd. 

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Axis-Shield, Capital Drilling Ltd. (DI), Cello Group, Collins Stewart, Dealogic Holdings, European Goldfields Ltd., Fairpoint Group, First Quantum Minerals Ltd., Fisher (James) & Sons, G4S, Gem Diamonds Ltd. (DI), KBC Advanced Technologies, Mears Group, Metalrax Group, ProPhotonix (Reg S) 

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Electronic Data Processing, Framlington AIM VCT, Trans Balkan Investments Ltd., Wynnstay Group 

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Debenhams 

Q1 
Avesco Group 

Wednesday March 16 

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Brooks Macdonald Group 

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Unilever 

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Velti 

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Datong, Domino Printing Sciences 

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British Polythene Industries, FBD Holdings, Fidelity European Values, Heavitree Brewery, Heavitree Brewery 'A' Shares, Henderson Private Equity Inv Trust, Hongkong Land Holding Ltd. (Singapore), Jardine Matheson Holdingd Ltd. (Singapore), Jardine Strategic Holdingd Ltd. (Singapore), Kingspan Group, Lancashire Holdings, Law Debenture Corp., Mithras Inv Trust, Paddy Power, Quadnetics Group, Standard Life, Temple Bar Inv Trust, Thomas Cook Group, XP Power Ltd. (DI) 

Thursday March 17 

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CVS Group 

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Q4 
Premier Farnell 

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Berendsen 

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Alpha Tiger Property Trust Ltd., Banco de Chile ADR, Epicure Qatar Equity Opportunities, Oxford Catalysts Group 

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Banco de Chile ADR, Brunner Inv Trust, Henderson Opportunities Trust, Image Scan Holdings 

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Investec 

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Sinclair (William) Holdings 

Friday March 18 

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Regenersis 

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Eaga, Standard Life UK Smaller Companies Trust 

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M Winkworth 

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Gas Turbine Efficiency, Lotte Shopping GDR (Reg S/144a) 

FINALS 
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Avation 

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Interbulk Group, JPMorgan Russian Securities, LG Chem Ltd. GDS (Reg S), Manroy, Samsung C&T Corp. GDR, Samsung Electronics Co Ltd. GDR (Reg S) 

FINAL DIVIDEND PAYMENT DATE 
Barclays, Catlin Group Ltd., Northern AIM VCT

allenmark_2

I am looking for the such great news on the dealing with the stocks in different ways.