Why is financial spread betting suitable for beginners?


A New Beginning

Stepping out on your first foray into trading can seem daunting. These days there appears to be an incredible amount of choice in everything that we do; whether it’s the clothes we buy, the food we eat or what we decide to watch on TV or virtually consume on our mobile phones and tablets. The choice and selection is almost endless. Much can also be said for the amount of choice there is on what you can trade. Not so long ago, it was relatively straight forward, but now with there being an almost endless supply of options, it’s hard to actually know where to begin. After all, with every choice you make on the product that you wish to trade, chances are, you will need to open a new brokering account just for that. The selection of a suitable one can be harder than at first thought. Looking on the surface brokers all do look the same, but once you uncover the varnish and start to dig deeper, it’s worth understanding, as I will point out in another article very soon, what you should be really looking at when you decide on your broker.

For the sake of this article, I won’t be writing on how to select a broker, but more to the point, why you should look to open, certainly to begin with, if you’ve not traded before and, come to think of it, even if you are trading right now – why you should open a financial spread betting account.

As you would have read from one of my other articles, that financial spread betting is almost seen by some traders as the poor cousin, that it’s not really trading and that you are only ever really pretending at trading if you trade in financial spread betting.

You Are NOT Trading Anything!

Now given the fact that yes, with financial spread bets, you are not trading but essentially betting against your bookie, the spread bet company, but that’s where it pretty much ends. Everything else is so closely tied into trading the actual same products in real terms, that you are and should think, act and state you are trading, because, in essence, you are. Except, the only difference, is that you are trading a bet that has no intrinsic value of it’s own, other than the outcome. However, be that as it may, you can say that is also true for a lot of derivatives.

In reality and removing snobbery, you would find that most traders, most professional traders would actually agree, that most trading in derivatives is really gambling anyway. It’s simply that financial spread betting is not ashamed to really call it exactly what it is.

The benefits exceed that of pretty much all derivatives, for those trading in financial spread bets. Namely, it’s tax free, in the UK at least as you are gambling and the fact, the glorious fact, that you can trade on virtually any market there is, what ever the broker (which I still prefer to call them) or that should really be financial spread betting company decided to offer. All offer Forex, stocks and index markets, many others offer a vast array of markets to trade.

Nothing Has Changed

The great thing about all this, is that all of these are traded the exact same way as they would be if you were trading them for real. Therefore, those trading Forex with a Forex broker, would not notice any difference, aside from the fact that most spread betting control panels are actually easier to understand, than they would if they were trading with their forex broker. The other advantage is of course, with their financial spread betting broker, the profits are tax free, where as with their forex broker, any profits they make, are subject to tax, this can mean, depending where you live, saying goodbye to up to half of your profit, just because you decided to trade with a forex broker, than you did with a financial spread betting broker.

Therefore, anyone looking out to start to trade, would be very wise to look at financial spread betting, because all the main markets are their, all the key derivative markets are there and the way in which they are traded are the same and any profits you make are not subject to tax. Everyone wins, well especially you.


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