Benefits Of Spread Betting And Taxes

If you are already aware of the benefits of stock trading in the physical market and also its inconveniences, then it is natural that you may also be seeking to find alternate trading choices that allow you to get more bang for your buck and without some of the inconveniences associated with physical stock market trading. How would you like to know of a trading instrument like financial spread betting or margined trading that it is also known by which allows you to trade more with less money and also not pay any taxes on your profits?

Well, the beauty of spread betting is that it allows you this luxury and that explains why many people are taking to it. Margined trading allows you to take advantage of market volatility in stocks, commodities, bonds and any such underlying. The leverage that you can get while putting in less capital is the main attraction over conventional physical market trading.

The rules as they stand now with regard to regulated trading makes it difficult for short term traders to make money consistently. There is just too much by way of additional burden that a trader has to bear. When you add the brokerage, stamp duty, capital gains tax and other administrative charges, you would get an idea of how they add up and make short term trading quite difficult. Yes, you can argue that in the physical market trading, you can set off losses against gains, which you cannot do in spread betting, but as long as you can ensure that in your investing activity, you are able to keep stop losses and get out at the right time, your profits will always be more than the losses and you would not have to set off anything.

Spread betting is just not speculation. It is a good tool for tax planning as it helps you hedge any potential risk you may face on the stock portfolio you hold. In a falling market, you need not sell your portfolio at a loss but can spread bet on stocks by going short and make money. You can thus recover whatever losses you make on your portfolio through this derivative activity.

As you would have seen, financial spread betting is an effective trading tool which can help you build your investment portfolio and protect your investments, by increasing profit without the requirements of tax fees.

Source: Independent Investor