The reason that a lot of people have done poorly is because they only ever have what is called a ‘long’ position. That is they buy something and only benefit when the price goes up. With financial spread betting you can actually go on the opposite side of the trade… you can trade short. This means that you have the ability to profit when an asset declines in value.
So what enables you to go short? When you trade this way you don’t own the asset. You place a stake in the direction that you think it will move. If you think it will move down you may place a short of £10 per point. For every point it declines you will make £10. For every point it goes up you lose £10.
I know I have probably lost half of you with that last paragraph but please bear with me. Yes it is complicated… well it will seem that way in the beginning but you will get there. Why not practice with a demo account offered by the financial spread betting companies?
If you are from the UK then there is an extra benefit of trading this way. That benefit is that you don’t pay capital gains tax. Tax laws can change so always seek advice prior to you starting.
That is only a few of the benefits of financial spread betting. There are some disadvantages of it that I encourage you to check out before opening an account.
The reason that a lot of people have done poorly is because they only ever have what is called a ‘long’ position. That is they buy something and only benefit when the price goes up. With financial spread betting you can actually go on the opposite side of the trade… you can trade short. This means that you have the ability to profit when an asset declines in value.
So what enables you to go short? When you trade this way you don’t own the asset. You place a stake in the direction that you think it will move. If you think it will move down you may place a short of £10 per point. For every point it declines you will make £10. For every point it goes up you lose £10.
I know I have probably lost half of you with that last paragraph but please bear with me. Yes it is complicated… well it will seem that way in the beginning but you will get there. Why not practice with a demo account offered by the financial spread betting companies?
If you are from the UK then there is an extra benefit of trading this way. That benefit is that you don’t pay capital gains tax. Tax laws can change so always seek advice prior to you starting.
That is only a few of the benefits of financial spread betting. There are some disadvantages of it that I encourage you to check out before opening an account.
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