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New to spread betting and have a few questions


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I am looking to use spread betting to invest long-term in a financial market like the US 500 instead of investing directly in an EFT to avoid tax (which in Ireland is 41%).

I am looking to do this without using leverage i.e. bet what I can afford to lose (always keeping my deposits matching my notional value).

  • What risks apart from market fluctuations are there?
  • If I bet in futures (force open) (not daily DFB), will that market always remain open and liquid?
  • Is there any concern with counter-party risk with IG?
  • I would look to re-invest profits and additional savings on a regular basis (maybe 6 months) by closing the position and opening a new trade. The reason for this is the minimum bet might be too high in notional value to simply make an additional bet on top of the open one. Is there anything I need to be cognisant of here?
Edited by RandyMarsh
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I would suggest spread betting is the wrong instrument for your aim to 'invest long-term' in the US 500.

Drip feeding into a low-cost ETF or tracker fund would be a far easier and cheaper route. I don't know anything about the tax regime in Ireland but wonder if there are not some tax wrapper vehicles (e.g. ISA or SIPP) or Capital Gains allowances available to you, to either minimise or avoid paying tax on your gains.

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Hi @RandyMarsh

Thanks for the query.

Spread betting is leveraged, we do not offer this account type without leverage. Futures have an expiry date, at which point you can either rollover the contract or close the position. Client funds are segregated so there is no counter-party risk. You can read more about this here: https://www.ig.com/ie/client-funds

You would need to close the position before you can realise profits. I suppose you would need to be cognisant of the spread costs. 

All the best, 

Anda 

  • Great! 1
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