Spread Betting Overview

Spread betting is better suited to more experienced investors because of the higher levels of risk it carries. It offers a tax-free way to speculate on the rise or fall of a particular:

• Share;
• Index;
• Commodities;
• Currency

...on almost any market.

Being realistic about the implications of spread betting

Although spread betting eliminates the payment of any commission, there is still an inherent cost within the difference (or spread) between the bid and offer. This is not dissimilar to the way a bureau de change prices currency when you wish to purchase or sell around a holiday.

Being able to make money when markets fall, as well as when they rise, gives spread betting a significant advantage over traditional shares. Saying that, timing is a factor which never disappears and, unless you get it right, you can potentially lose much more than you invest.

This Margined Trading or leverage essentially allows you to magnify your exposure to the markets many times over the amount you deposit. You must therefore always make sure that your exposure value represents an amount of money that you are prepared to lose. We can help evaluate and advise whether spread betting is a suitable investment product for you or not.

Tax savings available

Unlike the purchase of traditional shares there is no stamp duty payable on UK shares with spread betting. For UK residents, any profits made from Financial Spread Betting are also free from UK capital gains and income tax.

Limiting your exposure to risk

Spread Betting offers an enormous amount of leverage on your initial deposit. With this in mind it is imperative that you limit the amount you risk on each trade and remain within your means. At Simple Investments Mark Allen and his team will work closely with you to ensure you are not overly exposed to risk.

Interested? Give Mark Allen a call on 01483 413500 or email him on mark@simple-investments.co.uk.