Financial spread betting is a form of investing that has recently become very popular. Although you may be interested in this form of investing, you might be reluctant to take this interest any further because you lack the necessary confidence. In the following article we will discuss 5 things that you should be aware of concerning financial spread betting that will hopefully give you a better understanding of it and enable you to take the next step towards investing.
Trading Is Tax Free In the UK
One of the biggest advantages of financial spread betting as a form of investment is the fact that any profits that are gained from it in the United Kingdom are completely tax-free. This means that one any profits you make you don’t have to pay stamp duty, income tax or capital gains tax.
You Have the Choice to Trade Long or Trade Short
Spread betting is flexible in that you are able to trade either long or short, depending on your research and any hunches you have. Trading short is the type of investing you would do if you thought a price would decrease, whereas trading long is the type of investing you would do if you thought there was going to be a price increase.
You Only Have TO Trade On Margin
As spread betting is leveraged, you only have to trade on a small percentage of your trade’s overall value. This enables you to have capital free that you can invest or use elsewhere. When speaking in terms of investments, the percentage amount that you have to trade on with spread betting is known as the margin. This can be in the range of anything from as small as 0.2% of your trade’s overall value.
Spread Betting Is Not Free Of Risks
With any form of investment, there are always risks involved; and spread betting is no different. It is not called spread “betting” for nothing. While it is very likely and possible that you can make a nice, tidy profit from spread betting, on the other hand it is also likely and possible that you could lose everything you invest and much more.
You Should Use a Regulated and Trusted Financial Spread Betting Company
There is a large number of spread betting companies operating now, offering their clients trading platforms to invest through. The good thing about choosing one of these is that they are there to help you regardless of your level of experience within the world of investing and trading. They can help show you the ropes and guide you in making wise investment choices, as they have the necessary experience, training and qualifications. A company like this is also properly regulated, which is important as you want to know the company you work with is trustworthy at handling client’s money.
