Financial Spread Betting Advantages

Posted on September 1, 2010
Filed Under Investments | Leave a Comment

On Tuesday of this week we had to endure another budget in the UK. It was the first one from the coalition government and it was an emergency one. One of the key things in there for investors and traders was the increase in capital gains tax.

This will hit seasoned traders quite hard as they are likely to make profits well in excess of the threshold allowance. This is not something that concerns me too much as I do my trading through financial spread betting.

This is not the only advantage of financial spread betting. A further benefit is you could’ve made some money from the decline in the stock market yesterday. As we know, markets don’t trend up all the time and the price action yesterday confirmed that. You could have taken a short position and taken advantage of the declines.

While the stock markets were falling there was another market that was rising. The currency market and the pound started to show some strength. A trading option open to you yesterday was taking your profits from your short position in the stock market and go long in the pound. With financial spread betting you can do all of that from the same account.

I know people who want to invest and want to trade but they complain about not having the start up capital. There is no disadvantage to trading small in financial spread betting. You don’t pay commission so you can start trading from as little as a few hundred quid.

Like anything, there are drawbacks. You trade on a margin which is a positive for a lot of people. Some people however don’t control the risks properly which means that they can end up losing a lot of money.

I think yesterday really showed me why I like financial spread betting so much. It was clear to me that it holds many advantages over other trading.

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