What do financial spread bet traders actually trade?


What Do Traders In Financial Spreads Actually Trade?

Over the years, there has been quite a lot of misconception and preconceived ideas as to those trading in financial spread betting actually do and what on earth they actually trade. Many of these half truths and in some respects, down right lies, come from the press, who like to pillory a method of trading in the financial markets, that has both become a professional means of profiting from the financial markets, but also one that has come of age and is incredibly popular – both in terms of private traders and even institutions trading in them.

Unfortunately, a lot of the negative press that appears regarding financial spreads, is partly because the actual method of trading is available to almost anyone and secondly because you do not physically trade anything and are in fact taking a position against the spread betting company themselves, then you are not directly involved in the financial markets (more about that in a moment) but are simply taking a ‘punt’ against the contrary view of the spread betting company. The advantage, being many, but primarily any profits made are tax free.

However, because of these main facts associated with financial spreads, the press and a good amount of the public at large, mostly because of ignorance and that it’s ‘cool’ to knock anyone or any institution looking to profit from the markets and God forbid doing so with a method where they don’t pay any tax on the profits either, causes a great deal of delight for editors and two bit journalists looking for an easy target. What else could be easier to negate and garner public opinion than a method of trading which; is tax free, actually nothing is traded, massive profits can be made, and any part of the market or derivatives of can be traded. Wow, now that alone can be nectar to any negative journalist.

Don’t Let The Name Fool You

The truth of the matter is that despite it’s name, financial spread betting is a professional means of taking advantage, providing you know what you are doing, from the markets. For those of you looking to learn more about the markets, I am gradually writing and publishing, on this blog, what will be the equivalent of a professional level of training in trading and more so, in what I have been teaching traders for over 10 years, technical analysis. I will teach you exactly what professional traders need to learn to pass their exams, plus a few things they don’t teach you, which I’ve simply learned myself over the years.

Anyway, back to the story. As I was saying, the name itself doesn’t do it any favours. For starters, it really doesn’t sound like a professional means of trading does it, the only part that does is the word financial, but spread and betting, really takes any professional view garnered from its name away very quickly. Now, from those of you who have read the articles that I have been putting on this website over time will understand, or more to the point really should understand, is that the spread simply refers to the point between the buy and sell and where the broker or for those who want to be accurate, the financial spreads company (even though most are owned by brokers), make their money. The betting part, is associated with the fact, that any trade that you make with your broker, is against the broker and not actually in the markets themselves, because of this, it’s gambling, much as you would in a casino and another reason why the press like to lambast spreads.

You Can Trade Pretty Much Anything

Yet, for the initiated amongst you and I hope that you are one, spread betting despite it’s name and bad rap which is mostly blown out of proportion, is a highly professional means of trading and should be taken very seriously. Simply because, the fact that you can trade pretty much any market within financial spread betting, this alone is down to the financial spread betting company or more to the point I prefer to call them brokers still. They decide what you can and can’t trade, as long as they can get the market data, then you can pretty much trade it.

For instance then, 99% of all financial spread betting companies do allow you to trade in stocks, indices, commodity markets, including metals – gold, silver and so on, as well as the entire Forex market and this is just for starters. The very fact that spreads are unique, allows for the ability to include various forms of trading each and every of these derivatives or sections of the market place. Meaning that of course you can trade as you would using any of the professional methods of trading the markets, which as a reminder you will be able to learn on this website – enter your name and email on the top right for access. The brokers have developed trades that allow you to call market prices and ranges as well, which give you even more methods of taking advantage of the markets, than you could from any other method of trading.

I have always been a huge advocate of spreads and will continue to be. Personally, I always wish they would have changed the name of it, so it didn’t sound, well so cheap. Yet, despite it’s rather naff name. For me and for many like me, there is no better way to trade the markets. I simply fail to see the sense in trading using say a full on broker, when you know that any profits that you make with that broker are liable to tax. Where as, you can do the exact same thing with a financial spread betting company and walk away with ALL the profits and pay no tax. Granted, you pay more in the spread, but given the advantage of the tax breaks you receive and providing you trade professionally, then it’s a no brainer.


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