Spread betting is a tax-free way in which you can speculate on the rise or fall of any particular share, index or currency on almost, any market.
For UK residents, any profits made from Financial Spread Betting are free from UK capital gains and income tax.
Although spread betting eliminates the payment of any commission there is still an inherent cost to spread betting within the difference (or spread) between the bid and offer.
This is not dissimilar to the way a bureau de change prices currencies which you may wish to purchase or sell ahead of a holiday.
Unlike the purchase of traditional shares there is no stamp duty payable on UK shares with spread betting.
Being able to make money when markets fall as well as when they rise gives spread betting a significant advantage over traditional shares however, timing is a factor which never disappears and unless you get it right you can potentially lose much more than you invest.
Spread Betting offers an enormous amount of leverage on your initial deposit. With this in mind it is imperative that you limit the amount you risk on each trade and remain within your means.
Margined Trading or leverage, essentially allows you to magnify your exposure to the markets many times over the amount you deposit. Therefore you must always make sure that your exposure value represents an amount of money that you are prepared to lose.
Lovely Jubbly.
