Do you/would you use Arbitrage/Stoozing/Leverage?

I've been stoozing for a few years now. I use credit cards for everyday spending, once the 0% on purchases intro offer is up I do a balance transfer which in the current climate are 0% for 2+ years with some companies. I've made low four figures from interest on borrowed money...well worth looking in to if you're not currently doing it!

For the very short term, you can make debit card deposits on to platforms which take 1-2 working days before hitting your bank account by which time I have funded any deficit.  You can thus effectively utilise your overdraft facility without incurring any o/d fees/interest (your bank will typically only allow a debit card payment if you have the capacity, ie cash + o/d facility, to make the payment, but the transaction isn't recorded and valued on your account until 1-2 business days post transaction.  I normally use this to help shuffle money around platforms and stay fully invested, but it has the added benefit of earning interest on my o/d facilities at no funding cost so can be viewed as an extreme example of stoozing......

Some of my P2P cash came from replacing my FTSE100 tracker funds with bets on the FTSE100.  This makes my FTSE100 investing tax free and the sale of the tracker funds released cash for investing in P2P.  Complicated to manage and not for the faint hearted as each pound released for P2P is effectively being put at risk twice.  Once in the stock market bet and once in P2P.

Approach

I sold my FTSE100 exchange traded funds.  I keep 20% of the cash released to cover margin calls and invest the remaining 80% in P2P.  To get the equivalent FTSE100 exposure, every three months I place an up bet on the FTSE100 future for the next three months, and I place an up bet on a cheap put option to protect against market falls exceeding 20%.  I use IG Index.

Cost and benefit

For example this June I placed an up bet on the September FTSE100 future at 7437 points.  So for a £1 per point bet I would make or lose £1 for each point the FTSE is above or below 7437 points on 15 September 2017.  The bookmaker charges a 4 point (£4) spread.  To protect against crashes I placed an up bet on a September put option at 6200 points for a price of 11.3 points (£11.30).  Total cost 11.3+4=15.3 points (£15.30) for this quarter =0.2% of 7437 repeated 4 times a year =0.8% pa.

In return for that 0.8% pa cost I get the dividends tax free (reflected as a discount in the price of the future), there is no capital gains tax to pay, and 80% of the cash is available for investment in P2P.

Complications

I need to keep enough liquid cash to fund margin calls in case the market falls to 6200 before September.  (Falls below 6200 would be funded by the PUT option).  In September I will need to re-adjust the 20% cash reserve ready for the next quarter.

I am assuming that I can release enough P2P cash to fund the quarterly cash re-adjustment should the FTSE fall.  Following the flooding of the Lendy secondary market I am moving this cash reserve to other platforms as quickly as I can.

Experience

I have only been using this approach for about 18 months.  The cash rebalancing got quite expensive in the Jan 2016 market falls, but it has not yet triggered the put option.

Other markets

I use the same approach for the US S&P500 index.  But I still use exchange traded funds to get my exposure to other markets because the bid / offer spread on other instruments is nearer a prohibitive 1% every quarter.

my brother did and he earned a handsome sum of money from it.

i personally dont.

Ditto.