Why Traders Must Try Spread Betting

Compared to traditional investment methods, spread betting offers many benefits. This is the main reason why traders should try such investment venture. With spread betting, you can trade on both positions; whether the market is rising or falling. This provides more possibility of making profits. Of course, there are other reasons why traders invest in spread betting aside from this, including the following:

  • Compare costs – One of the main advantages of spread betting is the cost comparison. In spread betting, the trader can gain more profit compared to when he’s investing in a share trade. Even when trading on margin, the trader can still magnify his profits.

  • Have commission and be free of tax– In spread betting, the trader doesn’t own the shares but rather trade according to the share price’s performance. This means that the trader need not pay stamp duty or capital gains tax on any profits made or even account fees or stock broker’s commission. Thus, investors can obtain big savings.

  • Gain profits regardless of the market’s condition – The best reason why traders should invest in spread betting is that the investor can gain profits whether the market is falling or rising. Regardless of the direction of the market, you can still have the opportunity to make money.

  • Access the global markets – The potentials of spread betting is unlimited as compared to shared trading. The investor can have access to international markets including thousands of instruments like commodities, indices, bonds, sectors, and currencies.

  • Engage in margin trading – Investing in spread betting offers leverage or margin. This means that the trader can make a bet even without putting down the entire value of the transaction. Likewise, the funds are not locked up in just one trade. Thus, you can look for other investments where you can use the rest of the capital. This way, both the reward and risk potential is magnified regardless the movement of the market.

  • Access trading 24 hours– If you invest in spread betting you can access your account anytime you want because it runs for 24 hours. You can trade anytime you want, especially when the prices are moving, and anywhere you may be.

Spread betting allows the trader to go short or long, thus gaining exposure to the movement of the market. If you think that the market is going down, you can go short or sell the item. When the price falls, the profit increases. On the contrary, if the price rises, your losses also increase.

This kind of investment is both rewarding and risky. Therefore, before getting into it, it’s necessary to understand how it works. You should also do your research about different spread betting platforms. Keep in mind that your chance of making money is in the spread. If you want to make huge profits, then you should find for tightest spreads. You can find useful information from CMC Markets and learn how the system works. Spread betting isn’t only for commodities, shares, FTSE or foreign exchange but also for sports; the principles applied are the same. 

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