Share dealing Question !HELP!

[Guest DanLord]

I recently joined IG and my friend who is a Forex Broker told me that on IG when you 'buy' shares, you dont actually own them so it is essentially spread betting..?

To my uneducated brain in this world of trading, I was confused as I opened a Share  Dealing account on IG...is this information correct or with my Share Dealing account, the shares  I 'buy' I do own?

Any light that can be shed on this would be greatly appreciated.

 

Thanks,

Dan

[Caseynotes]

@DanLord, yes you can either have a share dealing account where you can buy actual shares or a spread betting or cfd account where you are simply taking a position on the direction of movement of the shares. If you feel you have opened the wrong type of account it should be no problem to shift funds across. You will need to jump through some extra hoops to open a sb/cfd account though as they are leveraged as Trendfollower points out.

[Guest DanLord]

1 hour ago, TrendFollower said:

@DanLord,

IG is known for trading and more specifically Spread Betting and CFD trading in the UK. It offers 'Margin Trading' and the ability to use 'Leverage'. For this you would open either a Spread Betting account or a CFD account.

Now IG does offer a Share Dealing account and though I have never used it, I can only think it is like any other UK share broking account where the client actually acquires the shares though I believe IG use a separate company for the nominee whom they will not disclose but suggest other brokers use them too. 

Your shares in IG's share dealing account will be held in a nominee account. Now from my understanding the shares are owned by a non-trading subsidiary of the stockbroker. This will be similar with certain other brokers in the UK as well so it is not just IG that adopt this. 

Thank you for your quick reply, this has helped me understand...I do have one more question just to clarify though,

For example, my friend told me to open an account with HL (Hargreaves Lansdown) because when you buy the share you own it. As you said it is held in a nominee account so does this mean I do not personally 'own' these.

 

Thanks again for your help!

[Caseynotes]

@DanLord, yes you own it, it is held in your name by the custodian (Citibank in the case of IG), this method is used because it facilitates the speed and ease of buying and selling shares as well as being cost effective.