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.
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.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
You may be right for some SB companies, but with ayondo (the only one I have experience with) this is not the case.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.
Interesting. I'll check them out. Had never even heard of themwith 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.You may be right for some SB companies, but with ayondo (the only one I have experience with) this is not the case
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 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 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.
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.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.
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