Spread-betting allows the investor to speculate on the movement of financial assets, including global indices and equities, currency pairs, commodities, and treasuries.
It is a type of derivative product which gives the investor the potential to speculate on whether an asset will go up or down in value, without having to actually buy or sell the underlying asset you are trading.
When spread-betting, you are quoted a buy and sell price for the asset. The difference between these two prices is known as the spread. Once you have decided whether you want to go long or short on this asset (using the corresponding buy or sell quote) you then need to determine your stake in this position. This will be a fixed monetary value that is either gained or lost per each point that the asset moves away from the quoted price. Due to regulations surrounding spread-betting, you do not have to pay any capital gains tax on any profits made.
As you are trading on margin and leveraging your total position in the market both profits and losses are magnified, losses can also exceed your initial deposit. Equitrade Capital employs a range of risk management techniques during the life-cycle of a trade to help protect your position.
Spread bets are leveraged products and carry a high level of risk to your capital for increased return as prices may move rapidly against you. Losses can exceed your deposits and you may be required to make further payments.