Spread Betting on Shares

Why Spread Bet on Shares?

sharesTrading on individual UK shares is the fastest growing area of financial spread betting and it is not at all difficult to understand why. As soon as a novice spread bettor can get their head around the fact that they are able to take a position and leverage a small amount of money to take advantage of the underlying share price, there really is no going back.

When you take into consideration everything that the average investor had to go through when purchasing share in the traditional manner, ie, having to pay the full price of the shares along with broker fees, stamp duty etc, they would be forgiven for thinking that there must be some kind of catch when taking an interest in the shares through a spread betting broker, which of course there isn’t!

To top it all off and to add insult to injury for the traditional investor in UK shares, should they make a profit it is liable for capital gains tax, under current legislation, all profits made from spread betting UK shares is entirely tax free!

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No.1 Spread Betting Company for Trading UK shares

As UK shares are always a popular with spread bettors, all of the brokers are extremely competitive when it comes to spread etc but the number one spread for all of the UK share spread betting requirements is CityIndex.co.uk.

In these times when spread betting brokers seem to be cropping up everywhere, CityIndex.co.uk is one of the UK’s most established companies. They began trading in 1983 which is a life time in the world of spread betting and they are constantly receiving awards due to the high standard of service and commitment to innovation in the financial spread betting industry.

As far as trading on UK shares go, CityIndex.co.uk offer a service which is second to none, backed by a trading platform which is highly efficient and very easy to use.

Tightest Spreads for Shares Trading:

Igindex.co.uk – 0.1%

CapitalSpreads.co.uk – 0.25%

CityIndex.co.uk – 0.2 -0.4%

Etxcapital.co.uk – from 0.08%

Intertrader.co.uk – from 1%

Tips for Trading UK Shares

Yet another obvious example of the advantage of trading UK shares through a spread betting broker as opposed to going down the more traditional route is the ability to be able to sell a share without actually owning it.

This is known as going short and the best way to describe it is by giving a simple example.

Let’s say that you believe Royal Mail shares are currently over valued at £4.62 per share. In your opinion Royal Mail will be dogged by strike action over the coming months, not to mention the fact that they are losing market share to their competitors and you decide to back your judgement by placing a spread bet that the share price will go down.

You accept a sell price of 460p and decide to sell at £10 per point. Over the next few weeks you are proved correct, the postal workers vote for strike action and the media take no prisoners in forecasting all sorts of woes for the future of Royal Mail.

You decide to take your profits when your broker offers a buy price of 405p which results in a tax free gain of (460 – 405) = 55

55 x 10 = £550 tax free profit.

Of course, if the price had gone up by the same amount you would have been looking at an equivalent loss, but don’t forget, any astute financial spread bettor would have utilized a stop loss to keep any losses to a minimum.


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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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