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March 06 2013


Benefits and Risks of Spread Betting

Leverage your investment potential

With spread bets you can increase you exposure to an underlying investment from a lower initial outlay. For example, a deposit of £100 might allow you to open a spread bet position equivalent to a £1,000 equity investment. This leverage is great news if the market moves in the direction you expect, but it obviously carries a high degree of risk if the market moves against you.

Tax free profits

As spread betting is not currently subject to UK Capital Gains Tax or UK stamp duty, any profits you make are not taxable, and any UK equity trades will not be subject to the usual 0.5% charge on purchases. Conversely, any losses you make through spread betting cannot be offset against profits elsewhere as they do not fall within the UK Capital Gains Tax regime.  You should, however, note that tax laws may change and are subject to individual circumstances.

Flexibility to trade global markets

Through our simple online trading platform you can trade on the movement of currencies, commodities, indices, sectors and individual equities across markets in Europe, North America and Asia, giving you access to hundreds of instruments not available through traditional trading.

Make profits (or losses) when markets move up or down

By going short you can profit from a falling market as easily as you could profit from a rising market.  Conversely, it is possible to make a loss from a rising market if you chose to sell it. 

Limited risk

Although spread betting is often thought of as inherently risky, it does not need to be. By using stop losses and guaranteed stop losses, you can limit the risk of every trade you place, and ensure that you never lose more than you can afford to. To read more about limiting your losses, read our managing your risk page.

No commissions or fees

With spread betting, the price you are quoted is the price you pay. There are no additional trading commissions as the cost of trading is built into the spread.

Read more about the benefits of spread betting vs conventional share trading.

Spread betting risks

Spread betting carries a high degree of risk.  Please ensure that you fully understand these risks.

Find out more on spread betting at http://www.finspreads.com

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