subject: Trading The International Financial Markets [print this page] Many people are increasingly thinking about taking control of their finances; especially in the light of the positives and negatives drawn from the economic crisis.
Being more tax efficient with your investments and savings is always a good idea. Looking to adjust existing stocks and shares portfolios is another sensible area of focus. And then there is looking at new investment opportunities.
I would imagine that most readers would benefit from putting more thought and effort into these key areas.
Certain trading formats are gaining popularity. One particular type of financial trading, namely spread betting, has a range of attractive features and is worth investigating further.
Before we continue though, it should be noted that, as with all forms of speculation, there is a downside and you can lose more than your initial investment.
Why is spread betting gaining popularity? Why should you consider it as part of your investment strategy? Put simply, spread betting addresses the problem of how to gain quick and simple access to World markets. It can also be tax efficient.
Many potential benefits exist. Spread trading can often be faster than traditional trading methods given that you are merely speculating on the future performance of a stock or asset, rather than taking ownership.
Naturally, you can spread bet on markets to go up but you can also spread bet on them to go down.
As discussed above, investing does have its risks but there are some steps you can take to minimise your potential downside. You could add a Guaranteed Stop Loss to your trade to help reduce your risks. If you were to start losing money on a particular market and the market continues to move against your position, but hits the level your Stop order is set at, then your trade will be closed and you won't lose any further funds even when the market carries on moving against your original trade.
There are a number of regulated UK spread betting firms and they tend to offer thousands of international markets. Naturally, companies like Financial Spreads and IG Index offer the normal benefits of spread betting including; trading outside market hours, no brokers fees, no commissions and tax free trading*.
Whilst spread betting offers a wide range of benefits, it is also important to remember the potential drawbacks.
Spread bets do carry a high level of risk so you should only speculate with money you can afford to lose. Before you trade, please ensure that spread betting matches your investment objectives, make sure you familiarise yourself with the risks involved and seek independent advice where necessary.
* According to current UK tax law, if you pay tax in another jurisdiction this may vary.
by: Robert Thomas
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