Uk Financial Spread Betting

Does the term 'spread betting' bring an image of galloping horses to your mind? If so, then perhaps you should see the more serious side of betting, namely Financial Spread Betting. Financial spread betting is a term which is used to define a specific type of futures contract wherein you are not required to take physical possession of any asset. As the term suggests, all that you are required to do is speculate about the future price of the market or asset class.Financial Spread Betting in the UK works on the principle of 'bid' and 'offer', also known as "Buy" and "Sell". If you want to bet on a financial market to go up, you "Buy" it. If you want to bet on a financial market to go down, you "Sell" it. Your profit or loss will be decided by the course that the markets undertake.The sentiments of the market are influenced by a variety of global factors, hence solid fundamental research should help.Spread betting can be projected in a negative light by brokers for the simple reason that they do not receive a commission. Personally, I find the fact that there are no brokers a good thing. This speeds up the process and it also means that there are no brokers fees or commissions.Although there are certain inherent risks associated with financial spread betting, in the UK a few proactive measures, such as a Stop Loss mechanism can help limit you downside. You can also try trading via a Demo Account, ie a free account where you trade with virtual funds. Financial spread betting carries a high level of risk and, therefore, a third important risk-reducing option is simply to trade with smaller stake. As with all investments, you should only trade with funds that you can afford to lose. In the UK and Ireland, spread betting offers you tax free* benefits as there is no stamp duty and your profits are tax free.You can financial spread bet on a wide range of global markets such as UK Shares, German shares, US shares, Crude Oil, Gold, Pound/Dollar, Euro/Yen etc. You can also spread bet on indices like the FTSE 100 and the Dow Jones.However, note that whatever you trade, this form of investment may not be suitable for all classes of investor. Make sure you fully understand the risks involved and, where necessary, seek independent financial advice.*Tax laws are subject to change and may differ if you pay tax in a jurisdiction other than the U.K. --

>Article Source: http://www.eArticlesOnline.comAbout the Author:Robert Thomas is a financial journalist and a seasoned spread betting writer offering strategic views on stocks and shares, commodities and forex markets