With the stock markets in a hubbub and stock prices yo-yoing on a daily basis it is the perfect climate for engaging in some potentially profitable spread betting! Say, you have a hunch that the euro is on the verge of collapse. Or that the Japanese stock market will beat the European market this year…
Want to bet on the Dollar against the Euro? Pound against the Euro? Not sure about the Nasdaq? Maybe the Deutche Bursa? What about oil, gas, silver, wheat or maybe you simply have an opinion that a certain stock will double in value? Spread betting allows you to do all this (and much, much more…) in a flexible, tax-efficient way. Don’t forget, tax treatment depends on the individual circumstances of each client and may change in future.
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or it can bankrupt you if you don’t…
Spread Betting is becoming increasingly popular as a day trading tool. Where there is volatility in the markets, there are opportunities to exploit. While such wild market swings have made life difficult for long-term investors, for those with a shorter term perspective the high volatility of recent months has created ample chances for them to profit from market swings. And more people are realising that you can trade from home and that you don’t need to be at a hedge fund or help from a stockbroker to try and make money from financial market movements. Spreadbetting offers a simple, tax-free* method of trading the financial markets, whether you’ve traded before or not. However, it is important to appreciate that when trading spread bets you can lose more than your initial margin deposit. Spread betting in this respect is rapidly becoming one of the most exciting ways of speculating on the stock markets and making money. It is a way of speculation which has something to offer everyone from day traders to swing and position traders. At it’s core is the maxim ‘The more correct you are, the more you win!’
Simple, cheap and highly flexible, financial spread betting will fit into any trading strategy that you currently use or wish to use. With the ability to go long or short in rising and falling markets and the capability of magnifying profits, or losses, spread bets are a useful addition to an experienced investor’s armoury. It is a fact that an increasing number of people are now trading using spreadbetting to avoid paying commission and taxes. It’s quick and easy to open an account, requires very small capital, offers leverage and lets you trade in very small amounts across a wide range of markets.
Spread betting might just be the thing for you. With this form of financial trading it is possible to profit no matter which direction the market is moving (i.e. you can profit even when prices fall), and you can trade thousands of different markets all from the one account. Traditionally, if you wanted to day trade shares in the United Kingdom using a broker, the share had to fluctuate by at least 5%… and even then at least half of your profits are going in commissions and tax. You see, in the United Kingdom every time you buy stocks and shares you pay a tax known as stamp duty. This amounts to 0.5% of the market value of the stocks (if you buy on margin, then 0.5% of the market value represents an even higher cost of trading). So with a 5% move, you would be lucky to walk away with 2% (and if the market goes against you, it will cost you about 5% + 0.5% + 1% = 6.5%).
Spreadbetting solves all this since it is considered gambling and it is free of stamp duty. In Ireland and the United Kingdom, the gambler pay no tax on gambling profits (the Bookie = spread betting company pays Tax, NOT YOU…). Of course there is still the bid-offer spread but it is usually much lower making spread betting far more efficient and cost effective. With financial spread betting you can bet in either direction with the same ease (i.e. bet on a share price rise, or bet on a share price fall for instance) – if you predict the market direction correctly, on the same 5% move, you will walk away with 4.75%…if you get it wrong, it costs you about 5.25%…
Our trading course assumes that you have absolutely no prior knowledge or experience of spread trading whatsoever. You can be an absolute and total beginning and this is not a problem. There is no requirements in knowledge or experience that you need to have. The course starts from the basis that the student is a complete beginner and thus begins by explained how to read a chart.
And remember spread trading is currently tax free so you don’t have to worry about capital gains tax. You can also get that little extra treat in the form of a spread betting bonus by signing up to one of the financial spread trading companies featured on our spreadbetting website.
I hope you enjoy reading this guide as much as I enjoyed compiling it. Your are embarking on a very exciting adventure and one which could, quite literally make you rich (or poor if you negligent!) I regularly make several thousands pounds on a bet, and sometimes lose a thousand pounds. It is just a matter of scale…
Start slowly. Build up confidence. Trade carefully.
But above all else…be disciplined.
Enjoy and good trading,
From The Spread Betting Coach