Why Financial Spread Betting
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Financial spread betting is a relatively new form of investing. It allows you to bet on shares or markets without owning any stocks or products.
Financial spread betting works on the basic principles of "Buying" or "Going long" and "Selling" or "Going short". Buying or going long simply refers to betting on the value of a market going up. Selling or going short is betting on the value of a market going down. These two principles form the crux of financial spread betting which ultimately decide your profits or losses depending upon how much the markets move up or down.
Financial spread betting has become increasingly popular due to the variety of benefits that it offers.
So for all those who want to know 'why spread bet?', here are some of the answers.
First and foremost, financial spread betting is a tax free* investment. Unlike buying shares and other investments there is no income tax, no capital gains tax and no stamp duty deducted from your P&L.
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Spread bets also give you the opportunity to stick to the market of your choice. There is little limitation with regards to the number of markets you can trade. You can take positions on a huge range of financial markets including shares, stock market indices,
forex, commodities, interest rates, bonds etc.
If your strength / knowledgebase is the FTSE, you can stick with trading the FTSE 100. If your strength is the Oil markets you can stick to spread trading the price of a barrel of Brent Crude Oil.
Financial spread betting also saves you from the headache of paying commission. Unlike many share dealing services, with spreads you do not pay a commission to the operator for every trade.
As mentioned above, you can bet on both upwards and downwards moving markets. If you think a market will go down, you can spread bet on the market going down.
Financial spread betting also lets you place your bets online or via the phone.
We understand the need to know about financial spread betting and therefore endeavour to provide a comprehensive guide to spreads. Just go to www.CleanFinancial.com whenever you are looking for a range of different opinions, tips and/or strategies on financial spread betting.
Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'Why Financial Spread Betting' by KK, updated 19-Jan-09
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