Spread betting: A tax-free way to trade

Spread betting is Britain's favourite way of using borrowed money to play the stockmarket. And you don't have to pay on your profits. Here's how it works.

Futures and options are the oldest types of derivatives, and the principles involved underpin many financial instruments. But they're not the most popular tools with individual British traders.

Instead, the UK's favoured way of using leverage (borrowed money) and shorting (profiting from falling prices) is through spread betting.

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