Spread Betting Online within Ltd Company

[Turion]

Originally Posted by BolshieBastard

A limited company is its own legal entity. I cannot see any valid reason why a limited co would want to be involved in spread betting never mind allowing its money to be spent in such a way.

No wonder contractors get investigated by HMRC.

At least, as Co Director, he is gambling with his own money.

Bit different from all those banks. Their directors were happy to gamble the stability of the global financial system creating/buying/selling dodgy debt - and then paying themselves mega bonuses.

[thunderlizard]

There are all sorts of valid reasons why a limited company would spread bet. A gas supplier might want to hedge against its exposure to a mild winter by spread betting on the average temperature. Or, like this chap's company, it might just want to make some money by speculating.

Sure, it can all end in tears, but as you say, it's its own legal entity.

[BolshieBastard]

Originally Posted by thunderlizard

There are all sorts of valid reasons why a limited company would spread bet. A gas supplier might want to hedge against its exposure to a mild winter by spread betting on the average temperature. Or, like this chap's company, it might just want to make some money by speculating.

Sure, it can all end in tears, but as you say, it's its own legal entity.

With respect, that's hardly spread betting in the accepted sense is it? The OP seems to be referring to spread betting which is usually recognised as gambling on horse racing or football results etc.

If that's the case, I dont see how the OP can legally do that, director or not.

[Turion]

My Ltd co has a company share trading account in which stocks are traded and held, with funds being shifted to and from the bank deposit account, same as personal share accounts, except company cash is used. Whilst I do not spread bet, this is also simple to arrange if desired. TD Waterhouse, Selftrade and others offer these accounts.

[IR35 Avoider]

Originally Posted by BolshieBastard

With respect, that's hardly spread betting in the accepted sense is it? The OP seems to be referring to spread betting which is usually recognised as gambling on horse racing or football results etc.

You don't seem to know much about UK spread betting companies. I would guess that more than 90% of all bets placed since IG Index was founded in 1975 have been a trade on some kind of financial market. Sports betting was an afterthought and is still a sideline at most companies. IG Index was founded so that people could gain exposure to gold, which couldn't legally be directly owned at the time. (The "IG" in "IG Index" stands for "Investors Gold.")

Spread betting is probably the easiest and most flexible way for a UK individual to get access to financial markets, particularly if they want do anything more unorthodox than buy a share to hold long-term.

Having said that, I don't recommend becoming a trader. When you join IG Index, they tell you they don't care if you win or lose, because they hedge their trades in the underlying market. However, when they went public, their prospectus said that they try as far as possible, within the constraints of their capital and prudence, not to hedge their customers trades. This is because they know their customers will nearly always end up losing money, so by taking the other side of whatever the customers do, they will make money. If the previous sentence doesn't scare the sh*t out of you, read it again until the full implications have sunk in. If it still doesn't scare you, find out what the Efficient Markets Hypothesis is, and read "Market Wizards" and "New Market Wizards" by Jack Schwager, which contain a series of interviews with famous traders. Once you've done that, and hopefully gained an appreciation of how difficult trading is, re-read the aforementioned sentence until you no longer feel like trading.

The following blog says what I've already said, at greater length.

http://chris-king-uk.blogspot.com/20...rategy-of.html

In "Market Speculating", a book sent to me free by IG Index, the author says that the reason betting winnings are tax-free is because people collectively lose money doing it. If winnings were taxable, losses would be tax-deductible, so it's in the governments interest for winnings to be tax-free.

Some quotes from the Blog, for those with short attention spans.

These star traders seemed to regard the market as a malignant metaphysical entity, an enemy trying to catch them out. One described the markets as a machine that held up a mirror to each trader, detecting whatever particular flaw existed in his character or personality, and using it to destroy him.

A quote along these lines is to be found in an amusing book, "A Fool and His Money." In it, a commodity trader is quoted telling the author, "When I first came down here I was Mr Big Ego. I had a law degree and here were all these ex-cops and truck drivers and people with 200-word vocabularies trading in the pits. I figured I'd make a killing, right? With this competition, how could you lose? Then I get the sh*t kicked out of me. Then I get the sh*t kicked out of me again. You know what I learned down here? Humility. Discipline. You come into this business with any sense of superiority, and you're dead. Sooner or later you find out who you are. That's what this game is about, finding out who you are. People say the market's this or the market's that, and they begin to think they can understand it. They discover they're wrong. They can't understand it. The market is ... the market is God."

In the same book, an expert estimates that 85% to 95% of people who invest in futures and options end up losing money.

[DimPrawn]

I've built-up £150k in the company bank account. Most of it is owed to HMRC.

Can I blow the lot on Lotto tickets?

[thunderlizard]

Originally Posted by BolshieBastard

The OP seems to be referring to spread betting which is usually recognised as gambling on horse racing or football results etc.

If that's the case, I dont see how the OP can legally do that, director or not.

Even if he is betting on the horses, I really can't see what law he'd be breaking. Under normal circumstances, a company director would not pop down to Market Rasen on the company's account, because he knows he's more likely to lose money than gain it, and because he knows the shareholders would pile out ASAP. But if the director is the sole shareholder too, then that obviously isn't going to happen. Yes it's reckless but not actually illegal. I'm sure there'd be personal comebacks for him if his recklessness left the company in debt - but that's not the issue here (I hope).


IR35 avoider - some interesting points there & I'll have a read of that blog, thanks. However, being a trader is all about thinking you're better than most other traders. When a trader buys a share, it's because he thinks it's cheap - which is to say that he thinks the rest of the market has valued it wrong.
& also:

In the same book, an expert estimates that 85% to 95% of people who invest in futures and options end up losing money.

...well, say it's 90%. That means (making several assumptions along the way) that the other 10% end up with 10 times what they put in. That's why there's so many people trying!

[wizard1974uk]

Originally Posted by DimPrawn

I've built-up £150k in the company bank account. Most of it is owed to HMRC.

Can I blow the lot on Lotto tickets?

Why not, you could win millions

[HairyArsedBloke]

Originally Posted by DimPrawn

I've built-up £150k in the company bank account. Most of it is owed to HMRC.

Can I blow the lot on Lotto tickets?

Have I blown

[Iron Condor]

Originally Posted by lindsay~

This might sound like a stupid question but I'm looking to start Spread Betting using Ltd Company funds.

Is this possible? All the spread betting site application forms I've looked at online ask for individual names and there doesnt seem to be a provision for company names anywhere.

Advice appreciated.

Lindsay

Its better to spread bet under your own name to save tax. Why pay 22% corporation tax + maybe more to remove profits when you can pay 0%?

You only need a small deposit to control alot of stock or futures.
So you only need to take a small divi from your company.. 10K can probably buy or short 100K worth of stock atleast, probably alot more. Ofcourse margin works both ways and you can quickly get a margin call.

I dont recommend spread betting if you want to day trade as the spread will add up over many trades.