# CFD Trading Loss



## nekminit (9 October 2014)

Hi folks

Have lost 6 figures trading CFDs (Igmarkets) can any of the loss be carried on when doing personal tax return?


----------



## avion (10 October 2014)

From memory if your turnover is greater than 20K you are able to deduct any losses against your other income. You have to qualify as a trader not an investor. Not sure what the criteria was but i was averaging 60 trades per day at some stage so qualifying as a trader was not an issue. I've been doing it trough accountant.


----------



## John Swift (10 October 2014)

My experience has been contrary to Avion's. Regardless of turnover I was never able to deduct trading losses against other income. :'(

Let us know what your accountant says.


----------



## skc (10 October 2014)

CFD trading is never considered capital gains, so there is no other place for it but be treated as income (unless you somehow managed to qualify it as casual game of chance). So on the same logic I would say losses should be treated equally. However I am no accoutant and I've never had a period of net loss to report...


----------



## cynic (10 October 2014)

John Swift said:


> My experience has been contrary to Avion's. Regardless of turnover I was never able to deduct trading losses against other income. :'(
> 
> Let us know what your accountant says.




Did your accountant/tax adviser give due consideration to the following ruling?http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~financial~basic~exact:::AND~spread~basic~exact:::AND~betting~basic~exact:::AND~contract~basic~exact&target=EA&style=java&sdocid=TXR/TR200515/NAT/ATO/00001&recStart=1&PiT=99991231235958&Archived=false&recnum=12&tot=15&pn=ALL:::ALL


----------



## nekminit (10 October 2014)

Loss of $476,000 AUD will be seeinh accountant monday.


----------



## John Swift (10 October 2014)

cynic said:


> Did your accountant/tax adviser give due consideration to the following ruling?http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~financial~basic~exact:::AND~spread~basic~exact:::AND~betting~basic~exact:::AND~contract~basic~exact&target=EA&style=java&sdocid=TXR/TR200515/NAT/ATO/00001&recStart=1&PiT=99991231235958&Archived=false&recnum=12&tot=15&pn=ALL:::ALL




Maybe? I'm not him, so... I don't know. You can ask him if you like.


----------



## barney (10 October 2014)

nekminit said:


> Loss of $476,000 AUD will be seeinh accountant monday.




That is a serious loss nekminit!!

Couple of questions:-

How are you coping with that psychologically? (I assume to lose that much, you had a large Bank balance to start with?)

What "product" did you lose it on (Stocks, Futures, Forex?)

What was the main reason for the losses in your opinion .. ie. lack of trading skill; bad luck; don't know.

For tax purposes, did you happen to make a profit in any preceding years prior to the loss as that may work in your favour ... although with CFD's I'm not sure.

Hope it works out ok for you  ..... makes my 75K loss a few years back look like a drop in the ocean


----------



## nekminit (10 October 2014)

barney said:


> That is a serious loss nekminit!!
> 
> Couple of questions:-
> 
> ...





Started end of day trading back in 2010 with capital of $50k.

Trading US stocks,JAP stocks,AU Stocks & futures only.

Fast forward almost 4 years my account balance was $1.92m last 3 months taken a loss of  $476k nothing has changed in my trading the markets can be a beast at times.


----------



## barney (10 October 2014)

nekminit said:


> Started end of day trading back in 2010 with capital of $50k.
> 
> Trading US stocks,JAP stocks,AU Stocks & futures only.
> 
> Fast forward almost 4 years my account balance was $1.92m last 3 months taken a loss of  $476k nothing has changed in my trading the markets can be a beast at times.




Whoah!


Your Accountant is your best friend ......  If you made that kind of profit and obviously traded a reasonably high volume, you would generally be considered a professional trader by the Tax department.

If so, your current losses should be deductable from your Tax return ... although you would have had to inform the TD of your original gains (and paid Tax on them) to get Pro-Trader status.

Only speaking from my own experience and that was with a Commsec account (not CFD's). A good Accountant should sort it out (favourably) for you, especially if you are still earning a decent income.

Cheers.


----------



## minwa (10 October 2014)

Did you mean you traded CFD's all 4 years ? With IG markets all the time ? And only lost this year ?

But honestly if you're been trading for 4 years and now into the millions and have not worked out all the tax issues beforehand you need to work on your trading "business" (not your trading skills..assuming no capital deposits you've made like almost 1000% return per year)


----------



## avion (10 October 2014)

That's a good going nekminit. Surprised you still stick with CFD's... Futures are cheaper don't you think?

Beware of bucket shops, once you are successful strange things start to happen...


----------



## nekminit (10 October 2014)

avion said:


> That's a good going nekminit. Surprised you still stick with CFD's... Futures are cheaper don't you think?
> 
> Beware of bucket shops, once you are successful strange things start to happen...





Bucket shops ahhhh! Started trading with (CMC) main reason why i moved to IG but in saying that IG are slim balls also, my strategy is set and forget max days in trade 20.


----------



## barney (10 October 2014)

nekminit said:


> Bucket shops ahhhh! Started trading with (CMC) main reason why i moved to IG but in saying that IG are slim balls also, my strategy is set and forget max days in trade 20.




Most here would be very interested to see a few of your best trades which propelled your 50K to almost $2million  ...... totally understand if you prefer not to divulge, but personally, I'm keen to see where that kind of  cash was generated


----------



## nekminit (10 October 2014)

barney said:


> Most here would be very interested to see a few of your best trades which propelled your 50K to almost $2million  ...... totally understand if you prefer not to divulge, but personally, I'm keen to see where that kind of  cash was generated




Some memborable trades below in no order.


Sprint nextel US
QBE
Gold ( Aug 13 )
DPW ( Germany )
Best Buy ( This trade made me 97k )
SPX500
NXT UK
FMG
8001
Softbank corp
CSC
VNO

Just some positions

How did i do it? Back in April 2010 i opened a position FMG going long with 120,000 CFDS entry @ $4.45 exit $5.33


Go big or go home is the moto


----------



## nekminit (10 October 2014)

Have been short on ADIDAS germany since $62.00 only trade i have open.... check price on that bugga...


----------



## ThingyMajiggy (10 October 2014)

nekminit said:


> Have been short on ADIDAS germany since $62.00 only trade i have open.... check price on that bugga...




Doing what to get in on these trades? 

I'm almost more interested in why you've lost almost 500K in the last 3 months? Especially seeing as it seems like your first big(or rather huge) loss before, otherwise I'd assume you would know about the tax details if you'd had a loss like this before.


----------



## kingink (13 October 2014)

Contemplating trying CFD's.. Not sure what derivative game to play?


----------



## kingink (13 October 2014)

Checked out commsecs demo account for CFD's... I've been missing out for so long not being able to short the market. Seems like a good thing to start learning.


----------



## skc (13 October 2014)

ThingyMajiggy said:


> I'm almost more interested in why you've lost almost 500K in the last 3 months?




nekminit has given you the answer already?



nekminit said:


> How did i do it? Back in April 2010 i opened a position FMG going long with 120,000 CFDS entry @ $4.45 exit $5.33
> Go big or go home is the moto


----------



## nekminit (13 October 2014)

Can confirm that the loss can be deducted with ATO, reason is i started a business which made decent profit so i might as well use my loss in trading.


----------



## ThingyMajiggy (13 October 2014)

skc said:


> nekminit has given you the answer already?




My bad, didn't piece together a trade from 2010 being the losses from the last 3 months.


----------



## skc (13 October 2014)

ThingyMajiggy said:


> My bad, didn't piece together a trade from 2010 being the losses from the last 3 months.




I didn't mean that he still has his FMG position open (if that's what you are thinking). I meant if that trade was indicative of the way he uses leverage than you wouldn't be surpised to see large losses on occassions.


----------



## ThingyMajiggy (13 October 2014)

skc said:


> I didn't mean that he still has his FMG position open (if that's what you are thinking). I meant if that trade was indicative of the way he uses leverage than you wouldn't be surpised to see large losses on occassions.




Yeah but he claims massive account gains(50K to 1.92M) and is asking about tax for this big loss, like as though it's never happened before(otherwise he'd know all about how the tax works?), so thought something might have changed in his trading in the last 3 months for there to be such a huge loss. 

But yeah I get what you mean


----------



## Trembling Hand (13 October 2014)

nekminit said:


> Can confirm that the loss can be deducted with ATO, reason is i started a business which made decent profit so i might as well use my loss in trading.




Hey? You haven't been doing a quarterly PAYG statement for the last 4 years although you have made some huge gains? Would it not be self explanatory if you were doing your tax during this time?


----------



## nekminit (13 October 2014)

People that have PM'd me i have sent you copy of my trades for inspiration and my account statement, the rest of the coin pushers no need to get upset.

leverage or go home.


----------



## skc (13 October 2014)

nekminit said:


> People that have PM'd me i have sent you copy of my trades for inspiration and my account statement, the rest of the coin pushers no need to get upset.
> 
> leverage or go home.




Please don't inspire people that way. How you choose to trade your money is your own business.... but you can ruin other people's life by telling them to trade like a leveraged nut.


----------



## John Swift (13 October 2014)

skc said:


> Please don't inspire people that way. How you choose to trade your money is your own business.... but you can ruin other people's life by telling them to trade like a leveraged nut.




Getting rich slow isn't the only option. Not sure why people only feel like they can/should only advocate for the 'safe' way... isn't that what aussiegovernmentbondforums.com is for?

Leverage or go home... coin pushers don't be hatin'!


----------



## nekminit (13 October 2014)

skc said:


> Please don't inspire people that way. How you choose to trade your money is your own business.... but you can ruin other people's life by telling them to trade like a leveraged nut.




I show other people my broker statement which is straight from IG, it is up to them to find a strategy and collect from the market, NOT telling people what trade to enter or exit.

In the mean time have been reading these forums for good 3 years most here are coin pushers with no verified accounts or anything of that sort just all TALK TALK & more TALK.


----------



## minwa (13 October 2014)

Here we go..

Alvin Purple, Tollbridge now we have their successor. Registered Oct '14..

Talks about verified IG account lol..


----------



## DeepState (13 October 2014)

:jerry



minwa said:


> Here we go..
> 
> Alvin Purple, Tollbridge now we have their successor. Registered Oct '14..
> 
> Talks about verified IG account lol..




:jerry


----------



## pinkboy (13 October 2014)

nekminit said:


> I show other people my broker statement which is straight from IG, it is up to them to find a strategy and collect from the market, NOT telling people what trade to enter or exit.
> 
> In the mean time have been reading these forums for good 3 years most here are coin pushers with no verified accounts or anything of that sort just all TALK TALK & more TALK.




Us 'coin pushers' aren't 3 bad trades away from bankruptcy. 

pinkboy


----------



## barney (13 October 2014)

nekminit said:


> Some memborable trades below in no order.
> 
> 
> Sprint nextel US
> ...





Ok. Thanks for the list.




ThingyMajiggy said:


> I'm almost more interested in why you've lost almost 500K in the last 3 months?




"Nek"  I have no doubt many will be envious of your track record, and good luck to you for turning over such a large profit, but I think Sam's question is very valid ....... ie. To lose such a large slab of your acquired profits in such a short space of time, do you think were you overweight on your risk parameters?  On these large leveraged trades, do you have a mental stop/uncle point in place before you take the trade or is it a totally discretional decision at the time?

Cheers.


----------



## nekminit (13 October 2014)

barney said:


> Ok. Thanks for the list.
> 
> 
> 
> ...




Have lost large amount because of greed and doing things that i shouldn't be, taking on more trades, wider stop losses and just being way to fearless. I know i will get back what i lost and more and also know that i got this money from pretty much thin air.

Overall

Win %	45.4%
Win/Loss Ratio	1.64
Expectancy	0.14
Average Days in Trade	13.6


----------



## pinkboy (13 October 2014)

nekminit said:


> Have lost large amount because of greed and doing things that i shouldn't be, taking on more trades, wider stop losses and just being way to fearless. I know i will get back what i lost and more and also know that i got this money from pretty much thin air.
> 
> Overall
> 
> ...




Oh, so gambling?

pinkboy


----------



## pinkboy (13 October 2014)

Hey nekminit!

If you're going to call me a 'queer@r$e' - at least have some balls to call it out in the open!  Sheesh, by private message!

I got thicker skin than that bro!


pinkboy


----------



## Joe Blow (13 October 2014)

pinkboy said:


> Hey nekminit!
> 
> If you're going to call me a 'queer@r$e' - at least have some balls to call it out in the open!  Sheesh, by private message!
> 
> I got thicker skin than that bro!




Hi pinkboy, he did but I removed the post. I don't think that kind of deliberate provocation is acceptable in discussions here at ASF.

If someone disagrees with *reasonable* criticism of their trading style, methodology or opinions the only acceptable response is to address to the criticism directly, not to attack, insult or provoke the person who is being critical.


----------



## pinkboy (13 October 2014)

nekminit said:


> I show other people my broker statement which is straight from IG, it is up to them to find a strategy and collect from the market, NOT telling people what trade to enter or exit.
> 
> In the mean time have been reading these forums for good 3 years most here are *coin pushers *with no verified accounts or anything of that sort *just all TALK TALK & more TALK*.






Joe Blow said:


> Hi pinkboy, he did but I removed the post. I don't think that kind of deliberate provocation is acceptable in discussions here at ASF.
> 
> If someone disagrees with *reasonable* criticism of their trading style, methodology or opinions the only acceptable response is to address to the criticism directly, not to attack, insult or provoke the person who is being critical.




Hi Joe Blow.

The precedence was set by the Original Poster to attack the trading style of certain posters.

I get the rules of the forum no sweat.  I engage as best I can in true trading discussion, can laugh and fly a bit of banter, jump in some general off topic talk - but can hold my own when there is some argy bargy!

Perhaps a 4 day young poster throwing 'off cuff' attacks should be more the focus here?


pinkboy


----------



## Joe Blow (13 October 2014)

pinkboy said:


> Perhaps a 4 day young poster throwing 'off cuff' attacks should be more the focus here?




It has been noted and a warning has been issued. I like to give everyone a chance to modify their behaviour. We are all capable of losing our temper occasionally.

However, continued provocation or insults will result in harsher measures being taken.


----------



## skc (13 October 2014)

nekminit said:


> Overall
> 
> Win %	45.4%
> Win/Loss Ratio	1.64
> ...




Check your maths.



John Swift said:


> My experience has been contrary to Avion's. Regardless of turnover I was never able to deduct trading losses against other income. :'(
> 
> Let us know what your accountant says.






John Swift said:


> Getting rich slow isn't the only option. Not sure why people only feel like they can/should only advocate for the 'safe' way... isn't that what aussiegovernmentbondforums.com is for?
> 
> Leverage or go home... coin pushers don't be hatin'!




Right... if you going to leverage at least find an accountant who let you deduct trading losses.


----------



## pinkboy (13 October 2014)

Joe Blow said:


> It has been noted and a warning has been issued. I like to give everyone a chance to modify their behaviour. We are all capable of losing our temper occasionally.
> 
> However, continued provocation or insults will result in harsher measures being taken.




Insinuating sexuality by notion of 'pink' in a name is not 'losing temper' or a 'slip of tongue'.  Dont make excuses for *that* type of behavior.

Good quality forumites have left or revoked their posting quota for far less.  You even ask for more active posting, of which Im trying my hardest to engage in.

I might be only a box of chocolates smarter than Forrest Gump, but I have right to defend.


pinkboy


----------



## Joe Blow (13 October 2014)

pinkboy said:


> Insinuating sexuality by notion of 'pink' in a name is not 'losing temper' or a 'slip of tongue'.  Dont make excuses for *that* type of behavior.
> 
> Good quality forumites have left or revoked their posting quota for far less.  You even ask for more active posting, of which Im trying my hardest to engage in.
> 
> I might be only a box of chocolates smarter than Forrest Gump, but I have right to defend.




pinkboy, I issued the warning based on the post by nekminit that I saw and removed. I allowed you to respond in this thread to the PM which I was not aware of.

Let's try and get this thread back on topic.


----------



## skc (13 October 2014)

pinkboy said:


> I might be only a box of chocolates smarter than Forrest Gump, but I have right to defend.
> 
> pinkboy






Joe Blow said:


> Hi pinkboy, he did but I removed the post. I don't think that kind of deliberate provocation is acceptable in discussions here at ASF.
> 
> If someone disagrees with *reasonable* criticism of their trading style, methodology or opinions the only acceptable response is to address to the criticism directly, not to attack, insult or provoke the person who is being critical.




Pinkboy, I think Joe's words were directed at the OP...


----------



## pinkboy (13 October 2014)

skc said:


> Pinkboy, I think Joe's words were directed at the OP...




Make that one less chocolate in the box.


pinkboy


----------



## Trembling Hand (13 October 2014)

nekminit said:


> Overall
> 
> Win %	45.4%
> Win/Loss Ratio	1.64






pinkboy said:


> Oh, so gambling?





Pinkboy am I missing something here. They are goodish numbers why would you conclude gambling (I'm assuming you meant that as a negative)


----------



## nekminit (13 October 2014)

Upset people all around, don't get mad i took your money from the markets.


----------



## nekminit (13 October 2014)

Nekminit your money was gone.


----------



## pinkboy (13 October 2014)

Trembling Hand said:


> Pinkboy am I missing something here. They are goodish numbers why would you conclude gambling (I'm assuming you meant that as a negative)




Good numbers - obviously down from great numbers.  

Read into the actions of the OP above his numbers. Punting trades.  What was a harmless dig, obviously hit a precious nerve. 

pinkboy


----------



## nekminit (13 October 2014)

Overall

Win %	45.4%
Win/Loss Ratio	1.64


----------



## lesm (14 October 2014)

nekminit said:


> Hi folks
> 
> Have lost 6 figures trading CFDs (Igmarkets) can any of the loss be carried on when doing personal tax return?




The thread appears to have lost context with the OPs original question, refer above.

He disclosed how he incurred the loss after being asked.

The OP can trade any way he wishes, whether people think it's a good or bad or gambling approach is up to them. Unless I've missed something, I don't think he asked for advice on how to trade or how he could change his approach to trading.

Besides the PM that caused some reaction and timely intervention by Joe, it appears that a number of ASF members besides yourself may have been PM'ing the OP with trading advice.

Whether he regains the loss, using his approach to trading, or incurs further losses only time will tell.

The OP has further provided some stats related to his approach, which TH commented on, as per his post below.



Trembling Hand said:


> Pinkboy am I missing something here. They are goodish numbers *why would you conclude gambling (I'm assuming you meant that as a negative)*




Why not just let it rest and people go back to the original question raised by the OP. Looks like nerves have been hit on more than one side.

Have a beer or two or whatever you like to drink, laugh it off and move on with life. Maybe you can have a good laugh together one day. with the OP.


----------



## minwa (14 October 2014)

nekminit said:


> Upset people all around, don't get mad i took your money from the markets.




Newsflash: you don't take anyone's money here from trading CFDs.

Come on everyone stop feeding him the attention he's seeking..if he just registered to see if he could deduct trading losses (a question for his accountant) he would not have mentioned the amount.



			
				nekminit said:
			
		

> People that have PM'd me i have sent you copy of my trades for inspiration and my account statement, the rest of the coin pushers no need to get upset.




Post a screenshot of the "PMs" you got ?


----------



## nekminit (14 October 2014)

I did ask for this thread to be deleted, not here to prove anything and for the record i have had many PM me asking for help/guidance in the end i hope i can help them some way. onwards and upwards.


----------



## nekminit (14 October 2014)

minwa said:


> Newsflash: you don't take anyone's money here from trading CFDs.
> 
> Come on everyone stop feeding him the attention he's seeking..if he just registered to see if he could deduct trading losses (a question for his accountant) he would not have mentioned the amount.
> 
> ...




Why should i? let the admin check and tell you. laters let me know what you trade so i can take your cash.


----------



## nekminit (14 October 2014)

So please delete thread.


----------



## barney (14 October 2014)

nekminit said:


> *Have lost large amount because of greed and doing things that i shouldn't be, taking on more trades, wider stop losses and just being way to fearless*. I know i will get back what i lost and more and also know that i got this money from pretty much thin air.





Its an easy trap to fall into for sure, and greed is a lot more destructive than fear.

If I had $1.5 million of the house's money, the first thing I'd do is put 2/3rds of it somewhere where the House couldn't get at it 


I hope the thread isn't deleted.  I'm genuinely interested in your plan of attack from here.

Cheers.


----------



## pinkboy (14 October 2014)

nekminit said:


> Upset people all around, don't get mad i took your money from the markets.






nekminit said:


> Nekminit your money was gone.




I find it funny you're originally here to ask for a handout from the ATO after Mr. Market took your money.

pinkboy


----------



## tech/a (14 October 2014)

Someone dealing with these sorts of $s
has to ask such a basic question.

If you have over $1mill you have people in place 
handling these menial tasks.

I treat these sort of posts as forum chatter.
No value.


----------



## lesm (14 October 2014)

tech/a said:


> Someone dealing with these sorts of $s
> has to ask such a basic question.
> 
> If you have over $1mill you have people in place
> ...




Couldn't agree more. Really a question for an accountant or the ATO.

Wonder if he declared the original income.

These types of questions started appearing earlier in time when CFDs first came into existence in Aus.


----------



## Trembling Hand (14 October 2014)

lesm said:


> Couldn't agree more. Really a question for an accountant or the ATO.
> 
> Wonder if he declared the original income.




Its clear that he hasn't. If he has been trading profitable for 4 years and doing his tax he would be doing the exercise every 3 months, or his Accountant. The ATO would have him in the PAYG system after he lodges his first tax return in the first year.

So not only does it seem he is a cowboy with leverage he also doesn't look after the basics of his business. What will the return be after the ATO catches up with the unclaimed profits and slaps on the 13% interest penalty rate?


----------



## Wysiwyg (22 May 2016)

I have a recent good example of how CFD providers make the most out of a clients loss. I took a short position on the Wednesday and decided to hold overnight. The following day the indicative price showed me I would be stopped out at open with a higher open price. I notice on my statement the position was closed not at open price but at the exact high of the day.  :bad:  Hopefully newbies will learn from this. 

p.s. I can provide evidence.


----------



## cynic (22 May 2016)

Wysiwyg said:


> I have a recent good example of how CFD providers make the most out of a clients loss. I took a short position on the Wednesday and decided to hold overnight. The following day the indicative price showed me I would be stopped out at open with a higher open price. I notice on my statement the position was closed not at open price but at the exact high of the day.  :bad:  Hopefully newbies will learn from this.
> 
> p.s. I can provide evidence.




May I ask which instrument and whether the provider was quoting an outside of hours market?


----------



## Wysiwyg (22 May 2016)

cynic said:


> May I ask which instrument and whether the provider was quoting an outside of hours market?



RIO FPO and during market hours. Being a CFD you don't get to see the order take place on the exchange but you can see the position close. The transaction price appears on your statement.


----------



## cynic (22 May 2016)

Wysiwyg said:


> RIO FPO and during market hours. Being a CFD you don't get to see the order take place on the exchange but you can see the position close. The transaction price appears on your statement.




Thanks for that. I  just wanted to be certain that the actual closure occurred during market hours and wasn't a part of the shady "greymarket" shenanigans.

Are you intending to take them to task on this one? I'd be very interested to hear how they respond.


----------



## Wysiwyg (22 May 2016)

cynic said:


> Are you intending to take them to task on this one? I'd be very interested to hear how they respond.



No because they say that was the best price their system closed the trade. The exact high of the day was coincidence. Lesson for new traders is be aware that CFD providers do squeeze every bit out of a trade. I have never had any problems trading using DMA (Direct Market Access). The trade mentioned was using the CFD market maker.

Check my GOLD trade on this forum where the spread opened up 4 dollars when usually fifty cents. Got screenshots to prove it. Posted it here somewhere. Will see if I can find it.


----------



## cynic (22 May 2016)

Wysiwyg said:


> No because they say that was the best price the system closed the trade. The exact high of the day was coincidence. Lesson for new traders is be aware that CFD providers do squeeze every bit out of a trade. I have never had any problems trading using DMA (Direct Market Access). The trade mentioned was using the CFD market maker.




What an amazing coincidence!

It just so happened that the client they bet against somehow managed to incur the maximum possible loss on that trade!


----------



## Wysiwyg (22 May 2016)

Wysiwyg said:


> I have never had any problems trading using DMA (Direct Market Access).



In saying that I don't see the short sell and covers as standing orders/sales in the market but the longs are visible as standing orders and sales. Being less transparent, they could possibly work the short order sale prices in DMA but I have been getting my prices.


----------

