WHAT IS FINANCIAL SPREAD BETTING? We take a look
Over the next few weeks we are conductin an experiment. You have all seen these get rich quick schemes.
Well its time we put it to the test.
Over the next few weeks i will keep you posted with updates etc.
What is spread betting?
Financial spread betting is a versatile and efficient way of accessing
financial markets. You can use it to deal on a huge range of outcomes,
from the performance of the FTSE 100 on a given day to the price of
gold at some set point in the future.
Spread betting is a way of gaining exposure to the performance of a financial
market or instrument. You can set up this exposure so as to profit when the
chosen market performs well (or lose money if it performs badly), or if you
expect the market to fall you can place your bet so you profit from downward
movement instead.
The performance of the market governs not just whether you win or lose but
how much as well. If you back a market to go up, you will make more the
further it goes up and you will lose more the further it goes down.
Unlike conventional betting where your stake is a fixed sum, a spread bet
is not limited by the money you put down – so your profits (or losses) can
exceed your initial deposit.
The one thing that spread betting does have in common with fixed-odds
betting is the notion that all transactions are truly bets and this offers an
advantage common to all bets: all profits are free of tax (tax law can be
changed or may differ depending on your personal circumstances).
When placing a spread bet, you may well be opting to ‘buy’ orange juice
or ‘sell’ shares in Lloyds Banking Group but, despite the terminology, you
are never taking ownership of any physical commodity or share. Instead you
are using the performance of those instruments over time as an underlying
benchmark for your bet with us