Financial Spread Betting Explained
What Is Spread Betting Trading?
How Can I Trade Spread Bets Online With ODL Markets?
Financial Spread Betting is a tax-free* and cost effective way of gaining entry to the financial markets, whether you are speculating on the movement of markets or hedging against adverse movements of your current investments.
A spread bet is the speculation of price fluctuations on a range of instruments such as equities, commodities, currencies, indices, bonds and many other bespoke products. You can back your judgement and profit if you believe a market will increase in price (or consequently lose if the market falls). Or you may wish to profit when the price of the market falls (thus lose if it rises).
The term “spread” refers to the difference between the Buy and Sell price being quoted by ODL Markets. If you think the price of the instrument will go up then you BUY; likewise, if you think the price will fall, you SELL. The price movement of the market or financial instrument will therefore determine not only whether you win or lose but how much you win or lose. The further the price of a market moves (up or down) will determine your profit or loss potential.
A key factor to Financial Spread Betting is that you do not physically own the instrument you are simply backing your trading judgment and speculating on its movement in price.
Spread betting holds a clear advantage over traditional methods of trading. Under current legislation all profits made from spread bets are tax free*. There is also no stamp duty payable on UK market shares** and no commission payable on your trades as the dealing charge is already incorporated in the spread. Without these external trading costs, financial spread betting allows for greater transparency, making it considerably easier for you to calculate your profit.
*Tax Laws may be subject to change
** Subject to change. Please note that stamp duty may be applicable to Irish Stocks. Please ring the dealing desk for further information.
Spread Betting is a high risk investment and it is possible to lose more than your initial deposit rapidly and substantially. Spread Betting may not be suitable for everyone, so please ensure you fully understand the risks involved.
Spread Betting profits and losses are not currently subject to UK Capital Gains tax, however tax laws are subject to change and depend on individual circumstances.
Please click here for our Risk Disclosure Notice
ODL Securities Limited is authorised and regulated by the Financial Services Authority - Registration number 171487 Member of the London Stock Exchange and NYSE Euronext.
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