what is spread betting?
Financial Spread Betting is a way of betting on the price movement of thousands
of financial markets including shares,
indices, forex,
commodities, bonds and interest rates.
Financial Spread Betting allows you to profit from both rising and falling markets,
placing trades over the phone and online. If you “go long” (buy), your profits will
rise in line with an increase in the price. If you “go short” (sell), your profits
will rise in line with a decrease in the price. Similarly, if you “go short” and
the price rises, losses can occur. Losses however can be controlled with the use
of a “Stop Loss”. See some spread betting
examples here.
Since you are betting on the outcome, you never take physical ownership of any position
and as such, all your profits are absolutely free from UK capital gains tax. Please
note however, tax laws are subject to change and may differ depending on your personal
circumstances.
Spread betting is a margined product that only requires you to deposit a small percentage
of the full value of your position. This means that the potential for profits, or
losses, from an initial capital outlay is significantly higher than in traditional
trading. The margin required is typically between 1% and 10% of the total value
of your position, depending on the market.
View more spread betting features here.
What is the spread?
The spread is the difference between the price at which you buy and the price at
which you sell. If you think the market will rise in price, you buy (go long) at
the higher price. If you think the market will fall in price, you sell (go short)
at the lower price.
Clearly, as a spread better you want the difference between the buy and sell price
(the spread) as low as possible, so the market doesn’t have to move much before
you are in profit. Twowayspreads prides itself in offering
Tightest Spreads. In fact, in some cases we can even offer trading with
no spread, so the buy and sell prices are exactly the same.
Further Information
Take a look at our Platinum Account for more
information on spread free trading. For a detailed look at the key features of spread
betting , click here.