I opened a spread betting account tonight.
For those who don't know spread betting is a very popular way to trade in the UK. This popularity is explained by several reasons:
- It is tax free. You are actually not buying or selling financial instruments. You are just betting that their price is going to go up or down.
- It is highly levered. You can bet £10 for every £1 change on the price.
- You can lever the leverage Why not spread betting on the price of options?
I haven't funded yet. A few remarks though:
- Give me access to real time pricing
- I am very looking forward to receiving the training materials they provide you with. Two of the biggest providers here in the UK are providing their new customers with binders and special trading conditions for the first few weeks after subscribing.
- Their is a lot of warning and they are providing you with options to limit your losses but two clicks and it is actually done: you can have opened a positions. If you passed the company's credit check you don't even have to have the money on your account. One loss? I'll do better on the next one. It is really crazy and losing a lot may actually be stupidly easy.
- Even if the spreads are tight, lots of fees around. Leverage has a cost.
Will keep readers posted on the experimentation.
