What is spread betting all about?

Wouldn't it be great if you could make a short-term gain on shares quickly, cheaply and without worrying about paying tax? Well you can: it's called spread betting. Here's how it works.

Wouldn't it be great if you could make a short-term gain on shares quickly, cheaply and without worrying about paying tax? Well you can. It's called spread betting. Better still you can place up or down bets this way.

Here's how it works. When you buy shares you incur all kinds of costs. There's the broking fee, which could be say £10 (or more likely £9.99) to buy, and the same to sell. Then there's 0.5% stamp duty paid to the government. Next you'll suffer capital gains tax at up to 28% on any profit you make between buying and selling.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.