Thanx again. I think with stocks and low volume stocks for sure, as you move higher in pound per point the spread gets wider and as you said they can do what they want. But I know for a fact stuff like Nasdaq cash futures/Dow etc you could do £100 a point and still get the same price/spread as someone doing £2 a point. I am not sure if £100 would be classed as too small for you, but for most it's a very big position. (£100 for those that don't know is worth 1.1 million + on the Nasdaq 100) Anyone with a decent system in place doing £100 a point daily I am sure will be very well off to say the least.
If you are betting long term the only viable option is to find a shop that only charge the spread every quarter or so, without any finance cost. Even then for most instruments the spread is very expensive. For example IG Nikkei225 have a 20 point spread vs 5 or 1-2 for futures. Otherwise most shop charge base rate + 250bps for financing which would easily kill your profit. From what I have gathered Spread betting pro tax free higher leverage/less margin Con of spread betting with quarterlies quote is not real quote and is controlled by the shop Pay spread every quarter which range from ~10bps to a 2-3% each year Can't move in and out without paying the awful spread also risk: tax rule change and counter party risk
I agree with most of what you said. BTW Nik 225 is 7 point spread during market hours, I actually trade that one sometimes. Regarding quotes not being real. With stuff like the Nasdaq 100 the spread will always stay the same, it actually went to 1 point yesterday! There is enough volume for them to always match the direct market. Something no one has touched on in this thread and it's a massive pro...IG offer guaranteed stops, which have worked well for me before. I used that for the last CPI shock number, so you know exactly what your max loss is if it gaps, also risk/reward can be amazing on those ones when it gaps in your favour. As you all know in the direct market with IB etc your stops don't help when markets gap.
You get Nikkei with 7pts spread? I suppose that is without any daily rollover charge? Can I know which shop please? edit: If you are referring to IG the 7 pt spread is for DFB which they charge you an arm and a leg for the daily finance fee. To avoid the finance charge you have to trade the quarterly future which is 20 pts spread and they force you to pay the whole spread during rollover.