STOCK MARKET SPREAD BETTING

I. What?

Index Betting, or Spread Betting is a tax free, cost effective alternative to traditional share trading. It allows you to speculate on the movement of stocks without using an expensive stockbroker.

II. How?

It is not only versatile, by allowing you to go long (buy) or short (sell) a share, it is extremely cost effective, as you do not pay commission or fees. If you are a UK resident, your profits are tax free. Index or Spread Betting can also be used to protect investments in an existing share portfolio.

The 'spread' in the phrase Spread Betting, refers to the Sell (Bid) and Buy (Offer) price quoted by a spread betting company. The price is calculated around the live (or the estimated future) market price of a financial product.

When you spread bet, you do not buy the stock or share but instead you make a bet as to which way you think the market or share-price will move. You can bet per penny or point movement, the amount you wish to bet is known as the 'stake,' and you can be as little as one Euro per point or penny movement.

III. Why?

Spread betting allows you to bet on huge variety of financial products in one place and in one currency. You make bets in one of three currencies (Sterling, US Dollars or Euros), which means you do not have to bother with costly exchange rates and can, in general, trade in your own currency.

Spread bets are margined trading products, which means you need only deposit a small percentage of the full value of your trade leaving your excess capital to continue working hard elsewhere.

IV. Advantages?

• 1. In spread betting, you can go short of (or sell) a stock or share.
• 2. Spread betting allows you to trade in sizes smaller than those usually available in the underlying market.
• 3. One can benefit from an opportunity to trade in larger positions than are normally permitted in the underlying market, without depositing large sums of money.
• 4. All spread betting profits are recognized as the winnings of a bet, and are therefore free of capital gains and income tax.