"spread betting"

mrmoose · Apr 1, 2003

i just heard of these shops in england where they have spread betting. what spread betting basically is firms making book on indexes (dow spu ftse) or other instruments and you bet. One advantage is that in england betting winnings are tax free (ironically trading or investing seems to be taxable some great social policy). One of the players in making these books is Cantor Fitzgerald (www.cantorindex.com where you can also bet on how much a movie will gross the first week).
my question does anyone trade on these sites and how do the spreads and liquidly compare with say the spiders or e Minis and are their arbs either between different spread shops or between the spread shops and the regular indexes. do any pros use spread betting either as a primary market or an arb tool?

NYSE Trader · Apr 1, 2003

another example of how there is little separation anymore between las vegas and wall street.

marketsurfer · Apr 1, 2003

spread betting is a losers game. heavily weighted toward the house. i would avoid it at all costs.

best,

surfer

Lobster · Apr 1, 2003

TradeSports is way past cool. But of course $1000 is a large order.

stock777 · Apr 1, 2003

Quote from NYSE Trader:

another example of how there is little separation anymore between las vegas and wall street.

In Vegas at least they give you room and board.

1contract · Apr 2, 2003

I am not as negative about spread betting as many others seem to be. They vary a lot in the spreads they offer - but it is possible to trade top 100 UK shares for mkt spread with no additional spread added. Mid 250 UK shares are a different story.

As for indices, they tend to anticipate the moves a little, which makes very short term scalping impossible. Also at key points you will sometimes get an unfavourable requote when you try to enter a trade. It is possible to get S&P daily for 0.5pt spread.

I guess they work in much the same way as FX trading companies. The advantage for UK traders is that winnings are tax free so.

candletrader · Apr 2, 2003

Spread betting is a pretty hopeless endeavor for intraday trading, since the house controls the spreads, not the market participants... if scalping, the spread makes an adverse move at precisely the wrong time... I don't know of any spread betters that allow US citizens to open an account...

Unless you
a) want to use spread betting as a tax-free vehicle for swing trading and
b) experiment at spread betting by trading through a friend's account who resides in Europe

then forget about this game...

Bachelier · Apr 2, 2003

check out my post in the retail section on person to person stockbetting:

Hey,

I had this idea:

At tradesports you can bet on for instance saddam's removal, in a scale of 0-100.

What if you could bet on a stock's closing price for the month (as stated by nbbo), on a scale from 0 cent untill 100000 cents. in the same model as tradesport.com's, eg. person to person, no professionals allowed. the price of this bet would follow the real stock's price closely of course, as with futures.

If you could open an account at a professional, safe, user friendly website providing this, by simply charging your creditcard, would you do it and would you trade there?

Commission free of course. or ultra low.

Greetings,

Bach