Spread betting on equities is a quick and flexible method of trading. Using this method an individual does not have to hold direct investments in order to trade on the financial markets. Another advantage is that a position can be taken which covers both the market moving up, and moving down. Profits can be made on both a rise and a fall in prices, so long as an individual has taken the appropriate long or short trade against the equity price.

Losses will occur however, if a bet is made that the price rises, and in fact it actually falls.

Spread betting is a fantastic way of having access to the world’s financial markets, and being able to see the movement in major shares and indices. Spread betting can be done against currencies, on equities and all major commodities throughout the Far East, Europe and the US. This includes emerging markets which are only just coming online.

The great thing about spread betting on shares and markets is that you do not need much up front capital, in fact you only need a percentage of the value of the position you are taking. This gives a high potential return on initial outlay. Markets vary, but on average you will need to put down 10% – 20% of your positions value.

There are also tax advantages to spread betting on equities as opposed to investing directly. Spread betting does not currently attract stamp duty, or Capital Gains in the UK. However, just because it is this way at the moment is no guarantee it will remain this way. Taxes are always subject to change.

As with any form of investment, spread betting carries a certain amount of risk and there is always the chance you may lose your investment. As such, this type of betting should be considered carefully before going ahead. It is important to be aware of all the risks before you start, and to get advice from an independent source if required.