In spite of the risks associated with spread betting, there’s a reason traders continue to return to its markets. In the next five points, we’ll cover some of the advantages of spread betting, and why it could be the right trading option for you:
Tax Free Trading*
Under current UK laws, profits made from bets are exempt from taxes. This means that your earnings in spread betting stay yours, regardless of the size of your profit. Clearly, tax-free profits are only advantageous if you’re actually making profits, but even if you lose, the capital gains made elsewhere cannot be offset against your losses.
No Commissions or Stamp Duty<
Most brokers offer a 0% commission on your bets, meaning your profit is yours to keep. Similarly, trades on the London stock market are exempt from the 0.5% Stamp Duty, which may seem minor now, but a 0.5% saving on every trade you make over the course of your spread betting career quickly adds up, especially on regular short-term stock trades. Please visit our Spread betting trading broker comparison page to find an account that suits your needs.
Trading with a Small Investment
When starting out in spread betting, the risk of large loss is best minimised by your ability to bet with values as low as £1 per point. This means that you can experience the fast-pace of live trading without running the risk of substantial loss. Similarly, because spread betting affords its traders a high leverage, even the smallest of movements in the underlying asset can translate into large profits. Simply put, spread betting makes your money work harder for you. But remember, high leverage can be a double-edged sword, so make sure you start small and only increase your investment when the time’s right for you.
24-Hour Trading
The beauty of spread betting is that the only limiting factor to the amount of trades you make per day is you. That is to say, the markets never sleep, meaning you are free to bet as much or as little as you personally want. This also means that the markets are constantly changing, so the world of spread betting is your oyster, so to speak.
Markets, Markets, Markets
One of the draws to spread betting is the inexhaustible supply of new markets available to choose from. With over 10,000 areas upon which to bet, spread betting is an exciting and ever-evolving marketplace filled to the brim with betting opportunities, including FX, Commodities, Indices, Equities and almost anything in between.
Conclusion
The culmination of these factors is a rapidly-evolving betting platform, with advantages far outweighing the disadvantages. Equally, some of these advantages can quickly double up as disadvantages when used incorrectly.
Want to open a Spread betting trading account?
Check our Spread betting trading broker comparison page to find an account that suits your needs.
*UK Tax laws are subject to change, please seek independent advice from a tax advisor.
