Anyone using saxo to trade futures in the UK?

globalarbtrader

globalarbtrader

I'm interested in API trading, if anyone has experience of that.

Basically I want a backup for IB. Seems to be the only shop offering actual futures, rather than CFD and spread bets.

GAT
 
I used Saxo exactly like yourself as a backup to IB. I only traded options and am also UK based.

I found the comms very high(like £4/contract) and the "platform" very antiquated.

The worst point for me was when they put my account on "closing trades only" because they had sent me a message on the platform which I had failed to see and take action on (some compliance req). Even after I filled in the form, I had to beg for 3 weeks to be given access again, and my messages were just ignored.

Ultimately I withdrew all my funds and closed my account.

I used Sucden for many years, but about 5-6 years ago they stopped acting for retail clients hence my move to Saxo.

I also have an account with DeCarley - a futures and commodities friendly US broker, but don't use it much. Very good personal service.

Not sure what the API facilties are like with them or Saxo.

Good luck.
 
I see a review for Saxo bank indeed as a good company already more than twenty years in operation, but the minimum deposit the broker is so high, I am never trading with this broker, I am trading with FXOpen broker, this company regulated too in FCA, besides ASIC and Cysec.
 
globalarbtrader said:
Spread betting is orders of magnitude more expensive than futures.

GAT
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Nas futures right now GLOBEX has 1 point spread. (has fees)

IG Nas Futures has 2 point spread, but we need to factor in that is tax free and there are no fees.

So if we make 100k+ profit on both the above, the first one we take a much bigger hit due to tax

right?

I guess this could be all to do with your trading style as well, if you rely on making just a few points per trade then I guess direct market has to be better.
 
tradingpoker said:
Nas futures right now GLOBEX has 1 point spread. (has fees)

IG Nas Futures has 2 point spread, but we need to factor in that is tax free and there are no fees.

So if we make 100k+ profit on both the above, the first one we take a much bigger hit due to tax

right?

I guess this could be all to do with your trading style as well, if you rely on making just a few points per trade then I guess direct market has to be better.
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The fees on trading Nat gas futures are tiny, $3 a contract I believe.

For my style of trading what tends to hurt you is the cost of rolling over positions every night. The funding costs on spread bets are horrendous due to the fat interest margin. You pay 2.5% a year with IG for example; may not sound very much but that's on your leveraged position so it can easily work to to a huge proportion of your account size. Or you can trade fixed dates rolling quarterly or monthly, basically replicating futures. But then the spreads are much wider. On my IG account now July Natgas is 12 points wide.

Alternatively I could day trade, but then that 2x width bid-offer would absolutely kill me.

Because you get £12k CGT allowance in the UK you actually need a huge position before the tax saving compensates for the extra costs - hundreds of thousands of pounds. At that level you'd be better off with futures.

There is extensive analysis on this in my third book, "Leveraged Trading". If you have a copy, then table 3 shows the average risk adjusted trading cost: futures 0.01SR units per trade (and if anything, this is very conservative), quarterly spread bets 0.06, and daily funded spread bets 0.11 SR units.

Spread bets and CFDs have their place for traders who can't afford the big ticket sizes of futures, as that is their main advantage. But I'm lucky enough that I can trade futures instead.

GAT
 
globalarbtrader said:
The fees on trading Nat gas futures are tiny, $3 a contract I believe.

For my style of trading what tends to hurt you is the cost of rolling over positions every night. The funding costs on spread bets are horrendous due to the fat interest margin. You pay 2.5% a year with IG for example; may not sound very much but that's on your leveraged position so it can easily work to to a huge proportion of your account size. Or you can trade fixed dates rolling quarterly or monthly, basically replicating futures. But then the spreads are much wider. On my IG account now July Natgas is 12 points wide.

Alternatively I could day trade, but then that 2x width bid-offer would absolutely kill me.

Because you get £12k CGT allowance in the UK you actually need a huge position before the tax saving compensates for the extra costs - hundreds of thousands of pounds. At that level you'd be better off with futures.

There is extensive analysis on this in my third book, "Leveraged Trading". If you have a copy, then table 3 shows the average risk adjusted trading cost: futures 0.01SR units per trade (and if anything, this is very conservative), quarterly spread bets 0.06, and daily funded spread bets 0.11 SR units.

Spread bets and CFDs have their place for traders who can't afford the big ticket sizes of futures, as that is their main advantage. But I'm lucky enough that I can trade futures instead.

GAT
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Thank you for the above.

When I said "Nas" futures I meant Nasdaq futures, sorry.

Over night funding for spread betting is an issue, agree there. So if we work off the E mini Nasdaq 100 futures. 1 contract is worth $227k.

So if I was to hold that position over night for 12 months on IG (spread betting) it could cost me over $5,000!

btw that overnight funding rate changes all the time. Also you can actually get paid! Right now if you are long oil you will be paid overnight funding. Say you are long 10 contracts, you will be paid $70 per day (again the rate changes all the time)

Going back to the Nasdaq futures example. 1 contract via Interactive brokers will cost you margin wise $24k, that same position via spread betting on IG is around $15k, so spread betting wins on that front, it's less margin.

Fees...to open the above position on IB, it's $2.15, to close it's $2.15, so $4.30 round trip.

With IG (spread betting) there is no fees, but wider spread. It's 2 point spread, each point equals $20, so that extra point costs us $20. So basically $15 ish more than interactive brokers.

I guess that is where they cost more and make their money. 10 trades per day would cost $200 on IG and only just over $20 on IB. Big difference I guess.

If you add overnight funding in then that goes up even more on IG, but I don't because I day trade only.

Regarding the tax side of things. Lets say you have a big year, 250k profits, you are going to lose up to 40% of that right on IB, but keeping it all on IG right? Does that not offset all the above then if you are day trading?

Thank you again
 
tradingpoker said:
Thank you for the above.

When I said "Nas" futures I meant Nasdaq futures, sorry.

Over night funding for spread betting is an issue, agree there. So if we work off the E mini Nasdaq 100 futures. 1 contract is worth $227k.

So if I was to hold that position over night for 12 months on IG (spread betting) it could cost me over $5,000!

btw that overnight funding rate changes all the time. Also you can actually get paid! Right now if you are long oil you will be paid overnight funding. Say you are long 10 contracts, you will be paid $70 per day (again the rate changes all the time)
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It's my understanding that you are only getting paid because the rolldown on the future is in your favour (contango or backwardation). But you are always paying 2.5% over and above what the future is.

So if the rolldown is 10% in your favour on a long futures position, then if you are long you will be earning 7.5% and if you are short you will be paying 12.5%.

tradingpoker said:
Regarding the tax side of things. Lets say you have a big year, 250k profits, you are going to lose up to 40% of that right on IB, but keeping it all on IG right? Does that not offset all the above then if you are day trading?

Thank you again
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Well I'm not day trading, so the break even for me would be much higher. Of course it's true that with a large enough expected profit there will be a point when the tax advantages outweigh the costs.

But I have fairly conservative profit expectations - conservative because I'm definitely going to be paying those trading costs regardless of my profits - and I'd probably be looking at a very large account before it would at least theoretically make sense to spreadbet.

And there are other issues with spreadbetting firms, like counterparty risk and the fact they can play games with quotes - for example you are likely to be paying a significantly wider spread if youre doing the size required for the tax advantages to make snse. Plus they don't offer the same range of products as someone like IB.

I am willing to concede that I'm biased in favour of futures, and as I've said spreadbets will make sense for some people (as long as they aware of the risks and costs). But not me.

GAT
 
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