Spread betting allows you to bet on a huge variety of financial products in one place and in one currency.  At Capitalspreads for example, you make your bets in one of 3 currencies (Sterling, US Dollars or Euros), which means you do not have to bother with costly exchange rates and can, in general, trade in your own currency.

Spread bets are margined trading products, which means you need only deposit a small percentage of the full value of your trade leaving your excess capital to continue working hard elsewhere. For example, a £1 bet on a share is the equivalent of buying (or selling) 100 real shares. On most shares the minimum Initial Margin Requirement (deposit) is 3-5% of the underlying value of the shares which means that you can take a bet in a share with as little as 1/30th of the money required to buy the actual real shares from a stock broker.

Also, because firms like Capital Spreads are not stockbroker, they do not charge commission or fees. They make profit from the spread they add to the underlying market prices, which result in their quotes. Plus, don’t forget, that - at the time of writing - UK residents benefit further because your profits do not incur Capital Gains and Income Tax.

Whilst spread betting offers many benefits, it is important to note that it carries a high level of risk to your capital, so you should only bet with money you can afford to lose.  Whilst some firms offer compulsory stop-losses, it is possible for you to lose more than your initial deposit. 

Although you can make substantial profits from spread betting, if the markets move against your bet, your loses can also be substantial and although Capital Spreads has a policy of attempting to limit client losses on bets by applying an automatic stop–loss to each bet you make, these stops are not guaranteed. As a consequence, if a market gaps, you may lose more than your initial deposit.

Click here to read more about spread betting at capitalspreads