Kamis, 04 April 2013

Advantages and difficulties of Financial Spread Betting

For many investors, financial spread betting is one of the most attractive ways to invest. For one, you do not need to pay taxes for profits that get based on capital gains, on which you must pay if you use conventional share trading. Also you don’t have to pay stamp duty when you make transactions, as in this case, we’re betting it won’t make an investment. Despite these advantages, this is more risky than conventional as fixed-odds betting where share trading have more protection over them. Should make a wrong bet, you will lose even more if there was no presence of a stop loss. Any losses that occur on betting, you will not be able to offset capital gains with ordinary investments.

How much you pay depends on the spread, which is the difference between the bid and the offer price. As is the case, a wider dissemination requires you to pay more than a narrow trade. So, when you decide on which company you want to spread bet on, be sure to compare the spreads. On the plus side, incidentally, competitions are on the rise as more investors were introduced to this type of bets and are happy with it. Because of this, the spreads are getting narrower.

However, there are still a lot of people who feel financial spread betting to be extremely risky. With the word ‘ bet ‘ in his name, people have negative connotations towards it, questioning the morality of bets instead of investing. Still, the idea among investment and spread betting is quite similar. Both aim to achieve profits. You buy it because you think that the price might go up. A big difference between the two is that you need money to pay a share, while betting requires less money. In addition, invest, losses can be extremely large by the day if your predictions go awry. This means perhaps losing their entire investment that had bought. On the other hand, spread betting, if you put a stop-loss limit, the loss will be only the amount they had settled. On the contrary, your WINS can be endless.

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