FTSE Spread Betting Guide
Do you currently invest? Have you got any money in UK shares? Well if you have then you may want to know a little bit about FTSE spread betting. This is a new way of getting exposure to the index. It has its advantages and disadvantages and we will go through some of these now.
The FTSE is the largest index on the London Stock Market. This is the one that they always report on the news each night. When you a doing FTSE spread betting you are making a bet on the entire index. This means that you need to think about more macro issues and not think too much about the performance of one or two companies.
If you don’t want exposure to the entire index then obviously you shouldn’t be thinking about FTSE spread betting. I will be something that you will have to put a bit of effort into. Perhap you could think about a managed portfolio or even investing in individual stocks if you prefer.
Can a tracker fund be better than FTSE spread betting? Yes of course it could and for the vast majority of people this is by far the better option. It is a cheap way to gain exposure to the FTSE as an investment and you don’t have to take an active role.
If buying a tracker fund is a better way to invest for most people then why should they want to try FTSE spread betting? There are so many benefits. You don’t have to pay tax, neither stamp duty or on profits in the UK. This may be true to trackers on profits if held in an ISA.
You can also start trading with small amounts because you don't have to pay commission. This means you are penalised for small trades. You can also take advantage of leverage although you need to ensure that you understand the risks before doing so.
If you have any doubts of FTSE spread betting or the tax implication then speak to your financial advisor beforehand. It is important that you understand all the implications of your trading.
Tags: ftse spread betting, Spread Betting Guide, spread betting uk