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Financial Spread Betting overview |
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It pays to remember that the costs associated with financial spread betting are included in the spread (the difference between the bid and the offer price) so the wider the spread, the more you pay to trade. When considering a company to spread bet always compare the Spread first.
Quite a number of people believe that financial spread betting is just too risky but the truth is a little different. It is possible to control the risk of loss quite specifically when placing a financial spread bet so that you know
the maximum amount you could lose right from the outset. If you bet on a share and impose a stop-loss limit, your loss is limited to that predetermined amount. A stop-loss being exactly as the name implies - it limits the amount you might lose (but doesn't affect the amount you might win!).
Spread trading can quite often require calm nerve and a cool head so it's not suited to everyone. Investors, as opposed to traders, who take a longer view and who prefer not to deal very often will not find spread betting attractive.
However, there are many attractions attached to financial spread betting, and increasing numbers of people are trying this rewarding form of investment. The two main attractions are that you need relatively little capital although you can make a lot of money from betting successfully, and all winnings are completely free from tax. It can be great fun, and very profitable.
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Spread Betting 