UK Financial
Spread Betting Guide
Financial Spread Betting Explained
Learn about successful financial spread betting strategies explained in
the information provided in this guide to arm yourself with useful
information before you begin to trade, helping you to become successful
in your spread trading and investments.
Whether your interest in global financial markets is stocks, bonds,
indices, commodities, forex, or a combination of these, this
guide to online spreadbetting can help you to learn as much as possible
about
the financial markets, their current values, financial betting tips and
strategies for how to financial spread bet successfully so that you
will
consistently reap a profit in the future.
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Financial
Spread Betting
Contents Index
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Financial Spread Betting Explained
 The concept was originally
devised in the UK for sports spread betting but when combined with the
vast potential profits offered by the financial markets, investors were
very quick to realize that financial betting can prove to be a far more
lucrative strategy for anyone that wants to take advantage of it.
Much like buying
traditional shares from a stock broker and selling them for a profit, a
successful spread trade is based on correctly betting on the rise and
fall of the current market prices.
However, it is slightly different in that you do not own the underlying
asset on which you are trading. Instead, profits and losses are simply
based on the price of the underlying asset, as it rises and falls with
the current conditions of the financial markets.
Basically, you are betting on the price movements of the underlying
asset of your choice. The UK financial spread betting
companies offer
price quotes in which a long quote (buy) means your profit is based on
the rise in the price, and a short quote (sell) means your profit is
based on falling prices.
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A
financial spread bet is an easy way of speculating on the rise and fall
of prices as it is simply a bet as to which direction you feel the
price of a specific asset will go. How much profit or loss you make is
based on the actual rise and fall of the market, just as it would if
you had purchased the shares through a traditional investment.
Advantages and Risks
Of course, online Financial spread betting is not for everyone but it
does have a wide appeal due to its versatility and value. While it is
not necessary to be a seasoned investor to participate in this type of
financial trading, you do need to research the products you are
interested in betting on, and need to know a few things about how the
process works.
You also need to be aware that, like any other type of capital
investment, there are both advantages and risks to consider. Compare online spreadbetting with
traditional investing. |
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Some of the Advantages of Spread Betting in the UK
- Go
long or short: Profit from both rises and falls within the
market
- No
dealing fees: No brokers means no dealing fees on trades.
The spread is the spread betting companies profit margin
- Tax
Free Trading: Exempt from UK capital gains tax and stamp
duty
- Cost
effective hedging: Hedge your current portfolio against
losses in declining markets
- Trade on
Margin: Maximize
profits through leverage
- Trade
world markets from one account: Access to trade worldwide
financial markets in
a single currency
- Demo
account: Free demo accounts allow you to learn how to
financial spread bet successfully without any risk
- Find out more
about the advantages
Risks
The
major risk associated with a financial spreadbet is the potential
for magnified losses due to the leverage and you can lose more than
your initial investment. When betting, ensure that you only invest
money that you
can truly afford to lose. Knowing the ins and outs of the financial
markets
will help you to make smart trading decisions, and while profits are
never guaranteed, knowledge can help you to utilize market
information to make decisions that are more likely to result in profits.
Regulation and Availability
In the UK spreadbetting is regulated by the Financial Conduct
Authority (FCA). Unfortunately, financial spread betting in America
(USA), is still not yet available as it is still considered to be
online gambling there.
Next: Financial Betting Explained
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