With the tax-free profits, Spread Betting gives you the ability to trade not just one the rising markets, but falling markets as well, as long as your speculation is right you can earn money. The trading opportunities are available round the clock, and there’s no limitation on when you can trade and how much trading can be done. All these factors make “Spread Betting” a lucrative concept among investors who want a steady flow of second income through trading.
Owing to all the benefits and perks of this unique type of trading, many investors are trying to get benefitted from this versatile trading product and are making this unqiue form of betting a vital part of their portfolio.
If you are wondering that “What is Spread Betting“, then it’s important to know that it is a type of trading which originated in the UK and involves placing the bet on the price movement of an entity. If you speculate the right direction of the movement, and place the bid in the right price range, you get benefitted. The benefits do not depend on the price rise. Even if the trader correctly speculates that the price movement will be on the negative side, and the price will decrease, he/she will get benefitted.
Why Spread betting Is Becoming Extremely Popular Among Investors?
Since its inception, has gained immense popularity and acceptance from traders. Some of the primary reasons which signify that why this type of betting is gleaning so much popularity include:
- It allows the traders to trade on rising as well as falling markets
- A relatively small deposit is required to control a larger value trade
- There are no commission charges applicable to the bets
- It is tax efficient, which implies that if you indulge in this type of betting, you need not to pay any UK CGT (Capital Gains Tax) or UK Stamp Duty
How Spread Betting Works?
As soon as you start trading, you are required to open a spread betting position in one of the available markets and select the amount that you would like to trade. Now, you have to speculate the price movement, and your monetary gain will increase with each point that the market moves in your speculated direction.
If you believe that the price of the market chosen by you will go up, you need to click “Buy”. Now, if the market actually moves up, then you will win the stake that you put for every point rise in the market. But, if the market moves down and the price falls, then you would lose the multiples of your stake.
For example, if you think that the price of a particular forex will go up, then you can buy this trade for a minimal stake of £2. Now, for every point rise, you will rise gain £2. But, if the price goes down, you would lose the multiples of £2 for every point drop, that is, £2 on first drop, £4 for second, £6 on the third and so on.
If you also want to try your hand at this inimitable type of betting, and wondering which platform to choose, then you can try “ETX Capital“. It’s a reliable, highly trusted and secure spread betting platform which allows you to trade indices, commodities as well as forex with great ease.
On What Entities Can I Put Spread Bets?
This betting can be done on various entities such as indices, forex, shares, commodities and the other markets including interest rates, bonds etc. This type of betting is very unique, because you don’t have to to actually buy or sell the entity on which you want to place your bet.