Spread betting is a threat to traditional share dealing a spread bet can be a faster, cheaper and tax-free way of making money. So it attracts its fair share of critics. Here are three myths about spread betting and why you should take them with a pinch of salt.
'Going short' is nasty
Spread betters always lose
Sure, when you place a spread bet, you are betting against a broker insofar as you accept their "spread". And to be blunt, most spread betters do end up losing their money to the house. But it's not impossible to make money as long as you have a consistent, well-disciplined strategy and a cool head. Practice makes perfect so make use of any trading simulations offered by your spread betting broker.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
- Spread betting The easy way to geared, tax-free returns
- Forex trading- How to profit from currency movements
Spread betting can only be used for gambling
Yes, spread betting can be used to gamble. And gambling is risky which is why we recommend you use stop losses. But you can also use spread bets to hedge a portfolio short term and actually reduce risk (see last week's edition of MoneyWeek for more on this).
-
How inheritance tax trick is helping families save ‘six-figure sums’Happy to skip a generation to save thousands on inheritance tax? A deed of variation could be the estate planning tool you need.
-
Nationwide: House prices unexpectedly dropped in AugustHouse prices fell by 0.1% in August in a surprise drop, according to Nationwide, as “affordability remains stretched”
