I want to briefly run through some of the advantages of financial spread betting. As with most things, there are a few disadvantages.
Ok so the first advantage of financial spread betting is that you don’t have to pay tax. When you are making lots of profits, tax can become a big chunk of that. With financial spread betting you don’t have to pay tax on any profits that you make, no matter how big they are.
Having said that this is only useful if you are actually making profits. You won’t be able to offset any of your loses you make else where. And specifically in financial spread betting because of its leverage, if you do make losses and you don’t protect yourself well enough, the losses could be substantial.
The other great advantage of financial spread betting is that it is so easy to learn and it is very easy to short trade shares (or any other asset for that matter). This is a really useful feature as it is as easy to short as it is to go long. This gives you full flexibility in any market.
There are lots of different markets for you to choose from as well. You can relax knowing that you don’t have to restrict yourself to a single area. This means that you can diversify and benefit from lots of different market movements.
When you are financial spread betting a foreign instruments you don’t have to worry about currency risk. Imaging I was making a bet on Coca Cola at £1 per point. I will make or lose £1 per point depending on the direction that it goes irrespective of the relationship between the GBP and the dollar.
This is really useful because you can fully concentrate on the underlying assets and not have to worry about the direction of the currency.
As already mentioned trading is risky so make sure you read all the available financial spread betting information beforehand.