Itís now official; spread betting is the future of stock market investments. Who would have thought itís possible to invest less and get a full price payout off your investments? If you arenít leveraging on this derivative stock trading method, here is what you are missing out on.
Spread betting basically means you donít own any stock assets but get paid from predicting whether there will be a rise or fall between bid and asking price. You donít have to worry about a crashing stock market or a cunning stock broker out to fleece you. But there are bigger benefits to this leveraged trading.
No capital tax
Capital tax only applies to assets owned thus means you are exempted as a spread bet investor. Any other costs obligation tied to asset ownership wonít apply to you either, which means your profit comes with zero-tax deductions. Itís a lucrative way to beat the system and not worry about the revenue authority raising eyebrows.
Trade on anything
Since itís all about predicting a rise or fall in bid and asking price, you can spread bet on just about anything. You can trade on gold, silver, market stocks, bonds, securities and even currency. Most spread-bet investors have access to over 10,000 stock markets globally, a 24 hour trading market in which one can enter and exit as they wish.
A clear trading pattern
You have the freedom to determine how much trading capital is going to be invested. This trading capital is always a fraction of the asking price which is multiplied by the difference between the closing and bid price. You will never be required to trade big sums if you donít want to, but you are guaranteed maximum returns when the prediction pays off. Everything is straight forward with spread betting, unlike the uncertainties of stock markets.
With asset stocks, like currencies, a slight disturbance in the market balance could bring the price value down. For example, a sudden outburst of political unrest ruins a countryís currency value in seconds, and there is no way you could predict that. But with stock prices, you can establish a pattern based on your knowledge and experience.
Plenty of information to tap into
Venturing into spread betting doesnít mean you have to go at it alone; there is constant wisdom out there to make use of. One of these avenues for tips and insights is spread betting companies like CMC markets. These online companies help you sign up an account and start trading right away. You will then be receiving daily trading insights provided by these spread bet companies that will help in your investment decisions.
It is no secret that one can incur a huge loss when they donít predict correctly. Even the statistics show that about 20% of spread bets end up in profit while the 80% is disappointing losses. However, spread betting companies are in place to increase the odds and offer a guiding eye.
Why you may not be right for spread betting
With so much money to be made by just predicting asset prices, how come very few people invest in such an avenue. Firstly, leveraged trading is only allowed in a few regions while itís banned in others. In the UK, spread betting is legal and highly lucrative because of the zero-tax loophole. However, in Australia, Japan and the USA, the practice is banned because it is considered as unlawful gambling. So to be a leveraged trading investor, you will need to open your account in the UK or any other country that allows the practice.
Other people shy away from the opportunity because of gambling fears. Just like the spreads in conventional gambling, it is possible to come out with huge profits or losses. Nonetheless, there are trading companies that offer daily insights that help steer away from losses and predict market prices better. Another reason why dozens of individuals donít spread bet is because of its addictive nature. There are fewer ties to real stock assets, fewer regulations and an opportunity to make insane profits from little deposits.
Spread betting is readily available in some countries and continents globally. Some of its advantages include tax-free profits, multiple markets to trade in, clearly defined trading platforms and readily available tips to help in market price speculation. However, there are discrepancies to be aware off before venturing into the trade.