spreadbetting

Intro

If you regularly trade the financial markets you may want to look at Spread betting. With no capital gains tax or stamp duty to pay*, and increasingly tight spreads, Spread betting is one of the most cost effective ways to trade. Learn more about financial spread betting in association with CMC Markets.

Spread betting

Spread betting is one of the most exciting and fastest growing ways to trade the financial markets. moneynet have produced a guide to spread betting and the different products available in the market. We have also produced a list of companies that offer spread betting services over the Internet which can be found here. All of the companies listed are regulated by the Financial Services Authority.

Spread betting at a glance

The principle benefits of spread betting are:

All profits are currently free from capital gains tax and Stamp duty*
Spread betting's flexibility means you can make money when markets are going down as well as going up.
Global markets are as accessible as UK markets. At CMC Markets you can trade UK, US, European and Pacific Rim equities and Indices all in one currency from a single account.
You can trade FX, Bullion and Treasury products as well as Equities and Indices.
You can trade on Margin.
You can place Control Risk Bets enabling you to limit your risk and giving you a "worse case scenario"
Spread betting is offered both over the telephone and online. CMC Markets allows you to trade on FREE award winning trading software.
You can spread bet even when the exchanges are closed, and some products are available 24 hours.

How Does Spread betting Work?

A spread betting company quotes a price on a given market. This price, as with a traditional equity, is made up of a bid and an offer price. The difference between these two prices is what is known as the spread.

If you think the price of the instrument will rise above the bid price, you buy, if you think the price will move lower than the sell price you sell.

For every point you feel the market will move you wager a desired amount of money.

For example.

Buying Vodafone.

Vodafone is trading at 116 - 116.5.
You think that the price of Vodafone is going to rise so you buy at 116.5 at £10.00 per point.
The price of Vodafone rises to 120 - 120.5 so you sell at 120.
In this instance you would have made a profit of £35.00 as Vodafone moved 3.5 points.
£10.00 x 3.5 = £35.00

Conversely

Vodafone's price drops from 116-116.5 to 113-113.5. You sell at 113 to close your position. In this instance you make a loss of £35.00 as the price moved 3.5 points against you.
£10.00 x 3.50 = £35.00

Selling Vodafone.

Again using Vodafone as an example

Vodafone is trading at 116 -116.5
You think that the price of Vodafone is going to fall so you sell at 116 at £10 pounds per point.
The price falls to 112-112.5 so you buy back vodafone to close your position.
The price fell by 3.5 points so you made a profit of £35.00

Conversely

Vodafone is trading at 116 - 116.5.
You sell vodafone at £10.00 per point
The vodafone price rises to 120-120.5
The price therefore moved 4.5 points against you resulting in a loss of £45.00
The more you are right the more you can profit from your judgement. Of course however the more you are wrong the more you may lose.

What are the costs associated with Spread betting.

When you Spread bet all of the costs associated with trading are included in the spread (the difference between the bid and the offer price). Therefore the wider the spread, the more you pay to trade. So when considering a company to spread bet with - Compare the Spread.

So Why Spread bet with CMC Markets?

Because CMC Markets? is committed to offering the tightest spreads in the market, and trading on tight spreads makes spread betting one of the most cost effective ways to trade the financial markets.

In Addition

Not only does CMC Markets/spreadbet offer tight spreads but you can spread bet on the cash market as well as the futures market.
Our Daily Rolling Cash bets enable you to roll your position indefinitely. Instead of paying an expensive roll over charge if you wish to hold your position overnight, you pay a financing charge as is traditional with CFD trading (Contracts for Difference).
CMC Markets offer over 2000 daily instruments to trade on - all of which are available on our award winning trading platform.

For more information or to open an account with CMC Markets/spreadbet call Freephone 08000 933 633, or visit our website at CMC Markets

Listed below are other companies that offer spreadbetting services over the Internet. All the companies listed are regulated by the Securities and Futures Authority.

Company	Contact Details	Services / Markets Offered
www.tradindex.com	Telephone 0207 422 3830 www.tradindex.com	Financial Spread Betting made easy, with unique virtual trading simulator with £20k in virtual funds.
Cantor Index	Telephone 0207 894 8800 www.cantorindex.com	Tax free share trading, indices. bonds,interest rates, commodities and options.
City Index	Telephone 0207 550 8500 www.cityindex.co.uk	Traded options, commodities, interest rates, currencies, bonds, popular markets
CMC Markets	Telephone 0800 0933 633 CMC Markets	Minimum £1 per point, narrow spreads, real time execution and advanced trading software..
Financial Spreads	Freephone 0800 096 9620 www.finspreads.com	Stockmarkets, traded options, commodities, interest rates, currencies, bonds
IG Index	Freephone 0800 195 3100 www.igindex.co.uk	Stock indices, shares, currencies, commodities, interest rates
Spreadex Financials	Telephone 0800 0526575 www.spreadexfinancials.com	Interest rates, stockmarkets, bonds
Index Trade	customerservice@indextrade.com www.indextrade.com	Interest rates, stockmarkets, bonds, commodities

RISK WARNING:
CMC Markets is the trading name of CMC Spreadbet Plc. Regulated by the FSA

Spread bets carry a high level of risk to your capital. Only speculate with money you can afford to lose. Prices may move rapidly against your interests and resulting losses may require further payments to be made. Spread betting may not be suitable for all customers, therefore ensure you fully understand the risks involved, and seek independent advice if necessary.

*Tax laws can change.

For further information contact please telephone the CMC Markets Client Services team on 0800 0933 633 or visit CMC Markets.