Financial spread bets are arguably the most popular form of betting and trading in the world and in the last decade has eclipsed its rivals in both the sports and financial markets.
So why have Financial Spread Bets become so popular?
In both the sports and financial markets, spread bets have potential for the biggest return on a minimal investment – although the risk of loss is also greater. As opposed to other forms of betting or trading, financial spread bets offer a wider variety of options and markets to trade on and the investment is based on t he outcome of a specific event rather than simply a “win or lose” or “rise or fall” scenario. This vast expanse of almost unlimited scenarios and trades to invest in, as well as a higher risk put on more obscure and ambitions bets, has turned the financial spread bet industry into a multibillion dollar business with some sports betting companies claiming that $3-$4 billion a year is spent on sports betting alone and around 300 spread betting accounts are opened every month.
Some providers offer financial spread betting tips for private clients, so it’s worth using these to formulate your own ideas.
What are the benefits of financial spread bets?
- Tax: Unlike other forms of trading, any profits that are made from financial spread bets are tax exempt; this means that you would not be liable for Capital Gains Tax or Income Tax* and in the case of some companies, you are not charged stamp duty or commission on the profits you make from your trades. Tax free trading is a huge advantage for many financial traders.
- Markets: Financial spread bet markets have a wider range of markets and options to trade within, in comparison to other financial trading systems, such as currencies and indices, commodities, metals and shares. Many providers offer a platform trial, allowing you to practice your trading strategy risk free.
- Limited Risk: Financial spread bets allow for more thought-out trades, meaning that you can do research and apply stops and limits to your trades prior to executing them tailoring your trades to your specifications and eventually perfecting your trading technique.
- One Currency: Unlike other financial services, financial spread bets allow you to further limit your losses and expenses on trades by allowing you to trade in a single currency, meaning you avoid facing currency exchange costs.
- Margins: Financial spread bet companies allow you to trade on the margin which means that you are only required to have a percentage of your required trade in your account prior to executing the trade. So if you are looking to place a trade with a total exposure of £5,000 and the company you trade with offers you a margin of 3%, you would only be required to have £150 in your account in order to execute the trade.
*Under current UK tax laws, which may be subject to change.
Risk warning: Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.