The Benefits Of Spread Betting

By: Adam Swave

Since it is a huge deviation from the traditional way of dealing with stocks and securities, spread betting has created different opportunities to different types of people. Some people even see it as a viable investment option. At the same time, since you are placing your money on the “unknown” and therefore creating unimaginable risks, you are not investing, but gambling in essence.

Despite this, when dealt with properly and intellectually, you can surpass these limitations and earn fruitful returns. Essentially, it has benefits that make this activity very enticing to many people. Here are some of they key benefits in being a player in this industry.

You Are Free of Tax, Stamp Duty, and Commission

Since this is gambling in essence, all your profits are free of income tax and capital gains tax. Also, all traders are free of commission charges from middle men and brokers, no matter how often they engage in the trading business. Lastly, spread betting does not entail stamp duty, unlike the tradition trading of shares.

On the other hand, there is a type of player that pays a sum of money to brokers and similar middle men in exchange for crucial information that can significantly affect the outcome of the trades. They are the people who are considered major players of the industry. They maintain premium accounts and they treat this gambling activity as an essential investment goal. This is the reason why they will go at great lengths to maximize their profits from their deals, especially those who have invested a fairly large amount of money.

You Can Obtain Profits When Markets Rise and Fall

With spread betting, anybody can trade on the different sides of the shares. Positions available in any type of bets are the short and the long position. When you take the short position, you are hoping that the value of the share will fall so that you can buy the shares back after you have sold it at a higher price. When you take the long position, you have originally bought a share at a relative low price, hoping that its value will increase so that you can sell it at that price level and earn the difference as a profit.

Significantly, this shows the both sides where you can earn, as well as lose, in making bets in the industry. Because you do not actually own the shares, you are given the flexibility to either buy or sell it very quickly.

You Can Trade on Margin

In spread betting, you are actually trading on margin because both traders on either side bet on the price difference in a specific period of time. Even if you are relying on the difference, which may be small in some cases, your returns are magnified because you are holding more than one share.

Carefully considering these benefits will equip you the necessary characteristics in joining many types of bets. A positive outlook, founded by the benefits of spread betting, will certainly help you be a winner in the industry.