Financial spread betting is a way of trading that has many advantages. As with anything in life there are also some disadvantages and I will talk about these as well. I would like to discuss both the pros and cons of financial spread betting so you will be able to make your own mind up.

Financial spread betting has actually been here for a long time. In fact it has been around from the 1970s but has only really got popular in the last few years. It is actually defined as betting which means that in the UK you don’t have to pay tax on any of your profits.

Have you ever wanted to play the currency markets but were unable to open a Forex account because of the capital requirements? Well you can play the Forex market from your financial spread betting account. This is great because you are able to trade Forex cheaper with the additional benefits.

Not only can you bet against currencies, you can also bet in a vast number of markets. You can bet on stocks, interest rates, indices, commodities and the list is almost endless. Better still you can do it all from the same financial spread betting account.

Leverage is also key in financial spread betting. Being able to trade on a margin can be very profitable for some. This may be a problem for some people. They don’t have a risk strategy and trade too much. You need to understand this before you begin.

My aim was to open your eyes to the opportunities of financial spread betting and I hope that I have achieved that. I do hope that you have enjoyed reading and are more aware of the benefits and pitfalls involved. Make sure that you are fully comfortable with the risk before you start trading.

If you are thinking about trading using financial spread betting then you need to think about selecting an account from one of the spread betting companies there are in the market. There are lots of them to choose from and it can seem quite overwhelming when you first start searching.

You need to take a step back and not be overwhelmed. This level of competition between spread betting companies is great news. You as a trader will get a much better deal as a result. We have even seen customer service standards increase. You must also realise that there are all these firms because they make a lot of money so think about that when you are selecting.

Most, if not all, spread betting companies are regulated by the financial services authority (FSA). You need to ensure that yours is too. This is a basic check and 99.9% of time not necessary but it is best to be sure.

If you are a beginner then you should be opening a dummy account. Many spread betting companies offer these accounts. Yes not trading for real more may not sound exciting and will not be exactly the same as the real thing but it is in your interests to do it. You will be able to test the software and can see what the firm offers first hand.

Most spread betting companies will try and give you cashback to persuade you to open an account with them. This is another example demonstrating the amount of money they are making from you. Everyone likes to be rewarded and cashback is no different. It shouldn’t however be your main reason for selecting an account. This is a great reason to open a second ‘back up’ account.

The crucial thing about selecting spread betting companies is the size of the spread. The firms make their money that way and it is what costs you your money. They don’t charge commission so it feels like you aren’t paying anything. Your costs are the spread. This is probably the most important thing to consider. This is what the winning traders use to make their selection.

Investors have been starting to pull their hair out again over the last month. They thought that their wealth was on the road to recovery following the recession but movements in the stock market has left them doubting. The FTSE 100 came crashing below the 5000 mark again and went on to recover most of the losses.

Are you one of these investors who has seen many of your gains this year wiped out? If that applies to you then I believe that you should try and find alternative ways of making some profits. You want a way of benefiting from the volatility we have seen recently and a method of doing that is FTSE spread betting.

If you haven’t heard of FTSE spread betting then I will explain a little about it now. It is a great way of profiting (or making a loss) out of the movement of market. You don’t have to worry about individual movement of shares, just the market as a whole.

One of the biggest advantages of FTSE spread betting is that you can go short. If you feel that the market is about to fall then you can open a short trade. If it then goes on to fall you make your profits. You can use it as a hedge against your other long holdings.

FTSE spread betting can benefit you if you are paying a lot of capital gains tax on other assets. A great benefit is that in the UK, you don’t have to pay any tax on the profits that you make. There is no stamp duty when you open a position either.

It is not good news for everyone that they can trade on a margin. If you don’t understand leverage or can’t control your risks correctly then leverage is not for you. If you are able to then you can gain a big advantage from leverage.

If you take your time and learn as much as you can about FTSE spread betting then you should be able to make some profits. It is not for everyone so make sure that you do your research before starting.

If you are looking to be right on the edge of the spread betting world then you need to look at the UK. It has existed in the UK since the seventies but was not that popular when it began. It is now a respectable way to trade in the financial world.

What sorts of markets can you trade? You have spread betting UK shares. There are many different shares to choose from and in fact most companies will offer some kind of bet on almost any share upon request. Be careful of the spreads though, especially on illiquid stocks as they then to be quite large.

Spread betting UK indices is also very popular. This is a good way to trade because the spreads are usually tight because the market is very liquid. Out of all the UK indices the FTSE 100 is the most liquid market and offers the tightest spreads. If you want you can gain exposure to other indices around the world such as American indices, European and Asia etc. You aren’t restricted to the United Kingdom.

Many people would think you were crazy to contemplate trading in commodities. You will be told that that they don’t produce and income and that the prices are too volatile. Too a certain extent they are right. They are volatile and it is very hard to value them because they don’t produce an income. Believe it or not but the volatility can assist you. You need to take advantage of those opportunities.

Have you ever done any Forex trading before? Perahps you should of this as your opportunity. You have the ability of spread betting UK pound versus the Euro, the dollar against almost any other currency you prefer. There is so much choice for you because the spread betting methodology works the same in all markets.

If you are thinking about trading then there are many spread betting UK companies for you to choose from. Increased competition has led to better value.

I was recently looking a changing spread betting companies. To my shock there are about twice as many now as there were when I last looked. At first I thought ‘oh no where do I begin?’ however it became clear that I was now in control. I am wanted by them.

Prior to starting about looking for choosing between the spread betting companies, I want to think about what the increased competition means. Well firstly it has brought new products, better service and better value. I can’t complain about that can I? But the increased competition means that they must have been making big profits to attract other firms into the market. Are they making the big money from me, you or all of us? Just something for you to think about.

Do you already have an account and want to open a second or will this be your first? Although you will be searching to similar attributes, if you don’t already have an account you may be a bit further behind.

Have you thought about the way in which you will be trading? Binary bets or rolling daily? You need to know this before looking at the spread betting companies. This is a big factor as the type of bet is crucial to your trading system and it needs to align. You can get rid of them all together if they don’t offer the products that you want.

Do you wants to trade share or foreign exchange? One of the key benefits of spread betting is being able to trade almost anything. Spread betting companies are adding more and more markets all of the time but you need to check that they offer the market that you want.

It is clear that you should be absolutely clear of what you require from the spread betting companies. Ensure you know what you need and what you can live without. You shouldn’t have any problems once this is clear.

FTSE spread betting has some advantages and disadvantages when comparing to other method of trading the index. I want to take you through a few of those now. I aim to give you a fair view of both sides so you can draw your own conclusions as to whether it is something that you want to pursue.

So what it FTSE spread betting? It is the performance of the FTSE that you will be betting on. This is a well known index in the UK made up to large firms. So in this respect you aren’t only interested in the performance of one company you are interested in the performance of a large number of companies.

But what if I only want to trade in one or two companies? Well in that case then FTSE spread betting is probably not for you. You may want to open a stockbroker account where you can trade individual shares or take advantage of financial spread betting areas.

How do trackers compare to FTSE spread betting? Even though they are based on the same index the are totally different. A tracker is a great option for those people who do not really want to take an active position in their trading.

Now you I am saying that you may be more suited to a tracker, why am I still talking about FTSE spread betting? There are many benefits to FTSE spread betting. Firstly you don’t have to pay tax on your profits. If you hold trackers in an ISA then this is potentially true for profits.

Other benefits incluse having the ability to trade in other markets from the same account, having small captial requirements and being able to use leverage. Please note that using leverage can be risky.

If you are unsure of any of the tax rules or whether that FTSE spread betting is for you then make sure that you speak to a financial advisor before trying it.