Has anyone ever used futures contracts for long term investing in indexes?
How I understand it would work. You use a spread betting platform to purchase future contracts, rolling them over once they expire. No use of leverage by making sure the notional value always matches the account value. Benefits of this are that they are an alternative to ETFs without having to worry about deemed disposal. You also don't have to pay CGT on gains. I'm not quite sure of the negatives - it's obviously high risk but from my understanding, once you're not using any leverage the risk lies in the index you choose as opposed to the approach. I'm sure I've missed or overlooked things so would love for other's thoughts on this.
How I understand it would work. You use a spread betting platform to purchase future contracts, rolling them over once they expire. No use of leverage by making sure the notional value always matches the account value. Benefits of this are that they are an alternative to ETFs without having to worry about deemed disposal. You also don't have to pay CGT on gains. I'm not quite sure of the negatives - it's obviously high risk but from my understanding, once you're not using any leverage the risk lies in the index you choose as opposed to the approach. I'm sure I've missed or overlooked things so would love for other's thoughts on this.
