Beginner's Guide to Spread Betting

 

Examples

Gambling vs Trading
The name spread betting automatically conjures up thoughts of gambling due to the word ‘bet’. This is confirmed by the UK government who have classed any profits made in a spread betting account as being free from capital gains tax. However, no trading or investing decision ever includes thoughts of gambling. This should also be true for any one hoping to venture into spread betting. In truth we should refer to 'spread betting' as 'spread trading'. The system has been set up to mimic open market trading as closely as possible and therefore lends itself to the same profitable strategies used in the open market. Strict risk reward and discipline are key. The same price movements, technical criteria or fundamentals exist; you are simply acting on your strategy through a different medium.

 

 

 

Without venturing too far into strategy building and implementation, it must be remembered that the smaller margin requirements, especially for stocks, must be incorporated into the risk factor of each trade.

Contents:
1. Introduction
2. How it Works, Similarities and Differences
3. Examples
4. Gambling vs Trading

Next:
5. Summary
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