With spread betting, gains are tax free and you can speculate on a very wide range of markets like commodities, stocks and shares, indices, foreign exchange and even interest rates. Businessmen who deal with online trading are exempted from doing transaction within limited periphery and they can even establish communication with clients either via internet or over telephones.
These days, most brokers have also introduced mobile trading which makes trading on the move especially convenient. You aren’t tied to open one spread betting account either – in fact a recent survey by research specialist Investment Trends founds that many people in the UK have multiple accounts with different brokers. In comparison to futures, warrants in spread betting are flexible and beneficial to traders as they are not liable to pay tax and stamp duty.
Other obvious benefits include the ability to profit from both rising and falling markets and the capacity to trade on margin. In addition, investors can get facilities by dealing with wide range of assets in different types of complicated market like Asian trading, Nifty 50, lubricant products, mining firms inclusive of all those products which are available in inadequate volumes.
Financial spread bet trading is a legal and licensed trading product and is regulated by the FSA in the UK which means that all spread betting companies need a license to operate. This means that you can rest assured that if you win you will get paid and in fact spread betting companies fall under the Investors Compensation Scheme which means that in the unlikely scenario that a provider faces financial difficulties this scheme will compensate investors for the losses. It is seen that even on weekends and after the closing of spread betting trading center, traders can get advantage of doing transaction in some cases.
In Britain, the spread betting firms provide two-way price inclusive of bid and offer price. The investor can take two directional choices on a given market; he can either ‘buy’ (i.e. go long) or ‘sell’ (i.e. go short). If any trader goes for long, he must anticipate the rise in the value of assets. If he/she faces downtime in the value of products, he/she can opt for selling option to get profits. Traders have excellent option to use stop loss offer to resist financial breakdown while experiencing nosedive in spread betting market.
However, this type of stop loss can’t be fully free of loopholes as you can face downtime in spite of using stop loss If the trader is interested to close the trade at given price, he can select stop loss by paying small premium. If any investor closes the spread bet, he must reverse trading to original options just like going short and long. It will be far better to place stake by investing limited amount in spread betting market at first and you should keep the track of profit/loss ratio in the trading.
Author is an expert writer on UK trading guide and where to spreadbet.