Where can you spread bet?

Financial_analyst

Where Can You Trade in Financial Spread Bets?

One of the questions I get asked about and it’s somewhat of an odd one, which usually begins with ‘I’ve heard about financial spread betting, but where can I trade it and is it tax free everywhere?’. Now, this is a decent enough question I suppose and as I’ve said, it’s one that I get asked quite a bit. It does amaze me though that one of the usual misconceptions is that some people actually think that financial spread betting is the product, service or item traded and that’s it. I think this confusion happens from the media, who have at times and mostly negatively certainly in the UK and through usually a good amount of ignorance on the journalists part, simply stated something along these lines in a new article ‘The trader was found to have lost money going short trading financial spread bets’. Given that this is partly true, yes you can lose money in trading and spreads are no different, but you really don’t specifically trade financial spread bets, well you do and you don’t and this is where the confusion lies. For those of you reading this for the very first time, you may be confused, but all this confusion on what financial spread betting truly is, can be read in the other posts on this very blog. It would seem silly of me to simply spout off the same information again, just for information sake.

So Where? The Answer Is Obvious…

Having got the confusion out of the way with regards to ‘trading in spread bets’, let us look at where you actually trade them. I have covered this in some detail in other articles, but I do like to try and keep things fresh and given that I was only asked this very question above the other day, I thought that it would make an interesting article. You see, I’ve been teaching traders analysis for years, at least 10 and it’s so very easy for me to make assumptions, much in the kind of way when people ask me, what to me is an obvious answer, but to others, may not be so.

Where can you trade them? The simple answer is with a financial spread betting company. That may sounds flippant, but the answer is in fact entirely true in every respect. These companies are not actual brokers, they are essentially book makers, nothing more. Legally, they are seen, predominantly as bookies, that offer odds based on the markets, but these odds are not in the traditional sense of say 3/1 against, or anything like that. The odds are presented as actual market financial data and the horse is the market or derivate, which is can be anything for any Forex pair or an index or a stock, plus many more options. The profits that are made, when you ‘win’ against the bookie, are tax free, as you are making a bet against the bookie, the spread betting company. Having said that, many of the main brokerages in the UK do offer Financial Spread Betting platforms, simply because they have the market knowledge and the market data anyway. Although, the last 5 years, or more, we have seen some of the High Street book makers move into spreads, but some of these are what are called ‘White Labels’ which is where there site is a branded site but the logistics and company behind it is an established broker or spread betting company – a common ‘White Label’ provider is London Capital Group. I will be writing more about ‘White Labels’ in another article.

You Do Know It’s Tax Free Right?

The whole Tax Free aspect of trading in spreads varies of course as to where you are based, in the UK gambling profits are free of tax, providing you opt to pay the tax on your bet/stake, rather than on your winnings. With spread betting, this is done automatically for you. Not all countries allow this form of trading of course. In the US, which is the World leader in gambling and in many respects was/is at the front of the ‘at home’ trading revolution that started in the early to mid 90’s. It would be safe to assume that you can trade financial spreads in the US, but amazingly you can’t. There has been quite a number of calls to have this changed and prior to the global financial crisis, this was actually gaining some steam. All that changed of course in 2009. I would imagine it pretty unlikely that the US will ever allow financial spread betting in the country or provide anything similar, which is a real shame. Strangely you can trade in spread betting, but nothing related to the financial markets.

….but not everywhere!

Other countries that do offer financial spread betting are; Canada, South Africa, Russia, France, Spain, Germany and most major European countries, but it does seem to change from year to year. Other countries do seem to come and go. If you are not sure, you can always email me directly and I can look for you directly. As I have many contacts within most of the spread betting companies across the globe, so can always help, plus I can help further on getting you a good account.

Once you have established that you can trade in financial spreads in your country, the next step is to figure out whether the profits you make are tax free. Now this depends partly on what it’s called, if they call it financial spreads, this means that it’s similar to trading in financial spread betting, but they do not class it as betting so the profits will be liable to tax. If the company states it with ‘betting’ at the end then it might be tax free on profits, but depends on how your country tax on gambling works. Most countries do not tax on gambling profits, but you simply need to check. Providing they don’t, then you are good to go.

Some quick news….

Very soon, I will be providing a detailed list of brokers, I know they are not brokers, but it’s the trader in me calling them that and as I’ve said before, many of the main brokers in the UK offer spread betting. Using this upcoming list of brokers will help decide which broker is for you. I will aim to provide a detailed review on each of their platforms and markets covered and point sizes.

For those of you interested in learning to trade, which I imagine is quite a lot of you, then don’t forget that I am producing a professional level trading course, that will teach you in technical analysis, the very thing you will need to learn to trade professionally, or at all for that matter. This trading course is free and gradually builds out as I write it. Basically, as soon as I have written a training article I will post it. The course will build out quite extensively over time and to keep track of updates, make sure you register in the top right. I do aim to use a financial spread betting platform for the examples and I am currently looking and talking with many of the brokers, as I want to show one in the training videos that I will also, over time add, that I believe offers the best platform and coverage and spreads.

Gradually, this training course will teach you how to trade at a completely professional level. It is free and as I write this article now, there are training modules going up on the training section today.

 

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