Spread betting as an alternative to holding shares directly

Zenith63

Registered User
Messages
1,302
In my case I hold a specific share to get the high dividend. In between ex dividend dates I also trade the share. I only take my profits out of my account.

So I open an account with €60k and purchase my share. I then trade this share 6 times throughout the year. Basically leaving a hard core €60k in my account. What are my charges likely to be.
Assuming this is a single UK/Irish share and ignoring profits and stamp duty for the minute, then -

With a Davy Select Trading Account you would pay €80 per annum maintenance charge, then €300 on each transaction (0.5% of €60k). Not sure how many buy/sell transactions you mean by "trade 6 times" but assuming you buy in once, then sell/buy/sell/buy/sell/buy then you're looking at seven transactions, so total cost for the year of €2180.

With a Davy Select Plus Trading Account (the 0.9% model account) you would pay €540 per year, half in June half in December.

Also worth considering other option as I don't think Davy is the cheapest way to do this.

Using the example above, DeGiro would cost you €182 in fees per year.

Or have you considered spreadbetting this share instead? If you do it with no margin/leverage then you're getting the same exposure to the market risk/reward wise, but you pay no tax on the gains or dividends. ayondo for example have no annual fees or transaction fees, they make all their money by slightly inflating the bid/ask spread, which seems to be very small (I'd suggest signing up for a demo account and having a look at the share you're interested in, see what the spread looks like) and would be blown away by the saving made by not having to pay tax. One thing to note is that these spreadbetting companies are not as highly regulated as your Cantor/Davy/DeGiro though, so there is certainly additional risk assumed in this way.
 
Or have you considered spreadbetting this share instead? If you do it with no margin/leverage then you're getting the same exposure to the market
One charge missing from the list is "interest" on borrowings to "buy" the shares. In effect, by trading with no margin/leverage, you're putting money on deposit with the spread betting company at zero interest and borrowing from them at the same time (at rates that vary with the provider and the market in which the shares are traded) to "invest" in the shares.
 
One charge missing from the list is "interest" on borrowings to "buy" the shares. In effect, by trading with no margin/leverage, you're putting money on deposit with the spread betting company at zero interest and borrowing from them at the same time (at rates that vary with the provider and the market in which the shares are traded) to "invest" in the shares.
You may be right for some SB companies, but with ayondo (the only one I have experience with) this is not the case.
 
You may be right for some SB companies, but with ayondo (the only one I have experience with) this is not the case
I've now checked their terms and conditions and they DO levy a "daily financing charge" on "Daily Rolling Spread Bets" (See Clause 42 of the Trading T's & C's). It's possible to avoid this charge, but only by having a fixed term contract, which must be rolled over at the expiry date, at a cost of the spread between bid and offer prices, if you want to keep the position open (and they may decide not to allow you to roll over the position) (See Clause 41 of the Trading T's & C's). I would assume that the two are broadly equivalent in cost terms. In short, there's no such thing as a free lunch.
 
I've now checked their terms and conditions and they DO levy a "daily financing charge" on "Daily Rolling Spread Bets" (See Clause 42 of the Trading T's & C's). It's possible to avoid this charge, but only by having a fixed term contract, which must be rolled over at the expiry date, at a cost of the spread between bid and offer prices, if you want to keep the position open (and they may decide not to allow you to roll over the position) (See Clause 41 of the Trading T's & C's). I would assume that the two are broadly equivalent in cost terms. In short, there's no such thing as a free lunch.
They must have it written that way to allow them change policy in future. However I've had it confirmed over the phone and in writing by them, and can also see the fees I'm being charged on my account - no financing charges on un-leveraged positions. They've confirmed that if this policy ever were to change, users would be informed in writing in advance.
 
I've had it confirmed over the phone and in writing by them, and can also see the fees I'm being charged on my account - no financing charges on un-leveraged positions.

I presume therefore that you have a fixed expiry spread bet. (The alternative is a daily rolling spread bet, under which there is a daily charge, which doesn't apply to you). That means your contract expires at an agreed date. If you want to keep the position open after that date, you'll have to roll it over and incur the bid-offer spread, as per my earlier post.
 
I presume therefore that you have a fixed expiry spread bet. (The alternative is a daily rolling spread bet, under which there is a daily charge, which doesn't apply to you). That means your contract expires at an agreed date. If you want to keep the position open after that date, you'll have to roll it over and incur the bid-offer spread, as per my earlier post.
Nope, standard rolling bet. They've confirmed that while their T&Cs state fees would be applicable, they are not levying them for the time-being and will inform users if at some point this position changes, though it's in-place for a long time now so hopefully not something that will change soon.
 
Last edited:
Hi Zenith

I was getting all excited about this until I read this bit::

Important information about ayondo GmbH's application for insolvency
We would like to inform you that ayondo GmbH, the marketplace provider for trading strategies and developer of the Social Trading technology, had to file for insolvency.

It is, however, important to stress that at this point ayondo GmbH is not yet insolvent and that the business operations are continuing as normal.

Additionally, please be aware that client funds are completely safe as it is held by our partner
BUX Financial Services Limited, the legal successor of ayondo markets Limited. BUX Financial Services Limited is a separate company unaffected by the developments of ayondo GmbH.

Also ayondo portfolio management GmbH as the provider of the signal routing is not affected by this.

In the meantime, we are working hard to restructure the Social Trading business to make sure we can continue operating the business as usual going forward. Of course, we will provide updates on this process.
 
Social Trading technology,

I had not heard of "social trading" before.

From Wikipedia:

Social trading is a form of investing that allows investors to observe the trading behavior of their peers and expert traders and to follow their investment strategies using copy trading or mirror trading. Social trading requires little or no knowledge about financial markets, and has been described as a low-cost, sophisticated alternative to traditional wealth managers by the World Economic Forum.
 
I take from this that the biggest risk is that the company goes bust and you lose all of your money because you don't own the underlying shares?
 
Back
Top