London, England -- (SBWIRE) -- 04/19/2011 -- Spread betting provider City Index (http://www.cityindex.co.uk) takes a look at four advantages of spread betting over standard trading.
Spread betting makes a falling market as potentially profitable as a rising one
In financial spread betting, unlike standard trading, you can back a market to rise or fall. This means that you can profit just as much from a spread bet on a declining market as you can on a thriving one.
Spread betting is free of tax
‘Buying and selling’ in financial spread betting does not actually mean buying and selling. You simply apply a money value to each 1 point move in a specific market. This means that spread betting does not require you to pay stamp duty tax or capital gains tax, as you never actually own the shares in question.
Spread betting is leveraged
Because spread betting is a leveraged product, every spread bet you place requires only about a 10% deposit of your full stake. This is known as the leverage and it means that a spread bettor can replicate the same position as a standard trader (who would pay the full price of their shares) for a much smaller initial outlay.
Spread betting is a much more immediate form of trading
Online spread betting is a very in-the-moment style of trading. You can feel an impulse to go long on Company X at 9am and have your spread betting position open by 9.01 - no share certificates, no phone calls to your broker, no problem.
For more on the differences between spread betting and standard trading, see http://www.cityindex.co.uk/spread-betting/spread-betting-vs-standard-trading.aspx
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
About City Index
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, spread betting.
We constantly look to improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. For more information, visit http://www.cityindex.co.uk/.