Spreadbetting FTSE 100

Discussion in 'Professional Trading' started by reactor, Apr 15, 2003.

  1. reactor


    hi people!

    i'm a newbie considering spreadbetting on the FTSE 100 because of the huge leverage as you can put on any amount for a one point movement that is divisible by £1 with a minimum bet of £1 and that all profits are tax free. i'm a uk resident and have had some experience with technical analysis. i'm considering using metastock professional version 8 along with e-signal as the data provider.

    firstly, how real-time would the data be that i get from e-signal? the spreadbetting company provides software which is very limited but is fed a more uptodate price, so a follow on question is how important is it to have real-time data if i want to be an intra-day trader?

    finally, my friend has managed to lose £500 from £1000 in just two days of trading, so should i be taking on such a risky instrument to begin with, and if i should, can i rely on my moving averages for entry and exit points? The pros rely on volume to help them out but its not available if you just trade the cash index, so would it be more wise to trade FTSE 100 futures?

    thanks for your time people!
  2. lindq


    Your questions indicate that you are indeed a newbie. And as such, you should not be trading with such a leveraged vehicle until you have thoroughly become familiar with your system and the instrument you want to trade. Leverage cuts both ways, and you will be in real danger of losing your trading capital...and possibly a lot more. This is not what you want to hear. But it is advice that you should take.
  3. You will get creamed ...
  4. Pabst


    You British are so paradoxical. Cultured, traveled, literate, and yet the most gullable blokes in the Western world.
  5. Reactor,I recommend you open an account with Finspreads and start trading with 1 pence a point to cap your losses.The spreads and price manipulation will kill you if you are daytrading compared to direct access trading but a lot of people in the UK start out this way.
  6. klutz


    Reactor, If you have £1000 to play with then do not bet more than £1 a pt.

    As long as you bet small and dont add to losing trades as well as taking losses once they reach a pre determined level you'll manage to last long enough to learn something worthwhile.

    One thing I forgot to mention, if you are thinking of day trading via a spread better then read StockOperators comment again he's dead right about the spreads and price manipulation.
  7. Spreads will kill you on the spread bets.

    Only way to make money on those things is to trade occasionaly or for the longer term moves.

    Tax free runs both ways, yes no tax IF you win but if you lose then you can't offset those losses against tax liabilities.

    I 100% agree with the other chap, go to finspreads and trade pennies a point rather than pounds.
  8. Agree with metoox and Pabst lol. Spread betting looks like a sucker game. I don't understand why UK traders use UK brokers, they suck. My understanding is the first 7000 are exempt from CG tax so why bother with spread betting? If you are talking about stamp duty tax, well trading UK stocks is just not an option, funny this morning I was just thinking that they should have a big tax cut like in the US and ought to get rid of this stamp duty tax , but is the UK really a capitalistic country? Get a US broker and trade ETF's or US stocks, the real thing.
  9. reactor


    thanks for the replies people!

    the spread is only three points during market hours and four points outside. the temptation is there. i feel nervous yet i feel excited by the prospect. i intend to do no more than two trades a day to begin with.

    i'm more mechanical in my approach than my friend, so i won't fall into the emotional trap of the gambler and hold onto losing positions in hope of a recovery.

    i dream about the numbers and can't escape the thought of trading in the stockmarket. i feel the passion and have the determination despite the huge risks involved.

    i'll check out Finspreads.

    i'll keep you folks updated with my progress!
    #10     Apr 16, 2003