Spread Betting

Guide: General Information

The advantages of using spread betting

There are plenty of advantages you get from using spread betting and some specific advantages for each product.

First the general advantages for both products:

One in the eye for the tax man. By using spread betting you avoid paying the 0.5% stamp duty that you would pay if you purchased actual shares. The money you make from spread betting is also currently free from capital gains tax. Of course always be aware tax rules can change.

Pay as you go. By using spread betting all the costs are included in the spread (i.e. the broker costs and funding.)

No short changing. Investors can 'short' and make money when share prices, markets and economies are going down as well as up.

The world is your oyster. Bets can be placed on a complete range of global markets and shares, sectors, commodities and currencies. You can back anything from Microsoft to metals.

Going up a gear. You can gear up or leverage your investment. In other words you only need to put down a fraction of the value of your trade or position. For spread betting if you bet say, £10 per penny movement this is equivalent to trading 1000 shares. In summary you get more bang for your buck.

This means that you can make more by putting down less money, but of course as always it is only fair to point out that you can also lose more.

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