The are lots of ways to trade and FTSE spread betting is one of them. It has its positives and negatives as does any other trading method. 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? Well you will be trading or ‘betting’ on the movement of the FTSE. This is a well known index in the UK made up to large firms. You therefore aren’t really interested how shares do on an individual level. You are more concerned with the overall movement of the market.
But what if I only want to trade in one or two companies? If that is your preference then you should really think about something other than FTSE spread betting. If that is the case think think about opening a normal stockbroker account or even do some financial spread betting for individual shares.
How do trackers compare to FTSE spread betting? Well both have exposure to the index but they are very different. A tracker is a great option for those people who do not really want to take an active position in their trading.
So if the tracker is potentially better for most people then why should I consider FTSE spread betting? Well FTSE spread betting has a number of advantages. 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.
The other advantages include access to lots of markets from the one account, you don’t have to pay commission and you can use leverage to assist your position. 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.
