Spread betting vs fx trading account

As this is my first post I’d like to take the opportunity to say what a great site this is and thank everyone for posting such valuable information.

I’m trying to weigh up the differences and pros and cons of a spread a/c vs an fx trading a/c. In summary, I think the spread account offers greater leverage (a benefit potentially) but at a larger cost (via the spread).
I would be interested in hearing the thoughts/recommendations of others.

Many thanks in advance to all respondants.

Hi

Ive tinkered with both so can answer this for you

Lets start with the positive
Spreads 100% tax free profit

negative
Spread larger

All positons are closed at the end of each night and reopened each day, if you are at a loss they take that amount from your account at the end of the day.

The biggest problem i found was that spreads tend not to allow you to trade 24 /7 so you are restricted as to when you can trade, normal london trading hours only. (although IG index will allow 24 hour but they still do the above to you.)

Also if you are holding a position and for some reason during the jap trading hours you can’t close or exit the position - so your relying on them executing your stop. NOT good

As for forex, with a broker you gain

you can gain money through carry trades
24 / 7 trading

the only dowside is you do have to declare the tax, or risk the revenue being on your case at some stage.

Any other questions please ask.

Thanks very much for the response.

I think the end of day closure and trading hours are key points here and will consider them when I come to developing a trading plan.

Thanks again.

Your tax situation will obviously depend on the laws of the country where you reside. Spread betting profits are tax free in the UK, but US citizens can never escape the long arm of the IRS.

The biggest problem i found was that spreads tend not to allow you to trade 24 /7 so you are restricted as to when you can trade, normal london trading hours only. (although IG index will allow 24 hour but they still do the above to you.)

Really? are you sure, I know I am a newbie but I have an account with IG and I carry trades over all the time and trade any time of day

Yeah, all UK spreadbetting companies operate 24/7 nowadays (and with tight spreads fixed) but 5 years ago it was a different story :slight_smile:

Hi, can you explain this a little more? How do you make money through a carry trade?

Thanks

Ha ha, sorry, never saw the date!!:34: