Posted by IndependentInvestor on July 28, 2010 under Spread Betting News | 
Financial spread betting giant WorldSpread has announced it has struck a deal with 188Bet to take its online trading services into other largely untapped markets, including the emerging Asian markets where financial spread betting remains a niche interest.
The partnership agreement will see spread betting hit a truly global stage, with analysts anticipating a strong rise in uptake in the new financial markets. With the WorldSpread online trading platform on offer to 188Bet’s global client base, the deal has paved the way for Asian investors to take advantage of spread betting on a range of worldwide indices.
Posted by MoneyWrite on July 14, 2010 under CFD Trading News, Spread Betting News |
There is a common misconception that Spread bets and Contracts for Difference (CFDs) are immune from the laws that govern insider trading. This is simply not the case. Anyone who is investing in spread bets or CFDs should be doing this because of their opinion on the market, and not through some privileged information.
Insider trading covers all types of trading on financial derivatives, and not simply the trading of the underlying shares as is commonly believed. This has meant that there have been a string of prosecutions of insider dealers who have engaged in insider trading.
As contracts for difference and spread bets are traded off a stock exchange then it can be harder to spot spikes or sudden dips in a share’s value as the prices of the contracts and bets are not published. However there is an indirect effect on a share price as markets tend to equalise, and sudden movements can still be seen.
Companies that provide contracts for difference and spread betting exchanges can often lose money on insider trades, and so tend to be quite zealous in prosecuting insider traders. Authorities used to be more lenient on insider trading on off market exchanges, although as it is commonly recognised that this can affect the share prices on the exchanges this is no longer the case.
Posted by IndependentInvestor on June 28, 2010 under Spread Betting News |
Although the budget did not raise Capital Gains Tax as much as was feared, it was still quite a large rise, and it can still affect people with large shareholdings. This has made the spread betting look even more attractive due to its tax free status.
Unlike shares, futures or contracts for difference, spread betting gains are not taxed as capital gains. This is because spread betting is seen as form of gambling as it is done in a closed network and the person who takes both sides of the bet is the same person. A contract for difference has a buyer and seller by contrast, whereas everything in a spread bet goes through the betting exchange.
It would be mad for the government to make gambling losses claimable for tax, so in that spirit the government makes gambling winnings untaxed.
This means that profits on spread bets are tax free. This means that some people can benefit a great deal on this.
Firstly the rise in capital gains tax particularly affected the higher paid. Those paying the 40% or 50% tax band saw their CGT rate go from 18% to 28%, a 56% increase in the rate. This is significant. Although losses on Contracts for difference, shares and options can be used to lower the capital gain, and the threshold of £10,100 remains, spread betting is totally tax free on the gains.
Spread betting has the same result as share options do, but due to the status of the activity as “betting” then it has remained tax free, something the budget has not changed.
Posted by IndependentInvestor on June 14, 2010 under CFD Trading News, Spread Betting News |
Sometimes it can be daunting to start trading Contracts for Difference or to start spread betting. The very attraction of these forms of share trading, the great gains that can be built up from small movements, also means that the losses can mount up quite quickly.
However a demo account is a very good way of learning the ropes. There are things that should be watched for, and it should be recognised that a demo account is not the same thing as trading with your own money.
A demo, or shadow, account is a “play” account where a person can put in the trades that they think should be made and then system mirrors a real system. Essentially the system will buy and sell at the currently prevailing prices and will show reports to see if the trades would have been profitable or made a loss. This will give a new trader some idea of where their strengths and weaknesses lie.
It must be recognised that there is a difference when you use your own money and when you use a demo account. When it is your own money then emotions can cloud your judgement. Benjamin Graham, the great investment theorist who Warren Buffet claimed to have copied, said that it was not the system that was used that marked out successful investors but the discipline that the successful investors used to keep to a system rather than their emotions.
It is much easier to use a system when it is not your money.
Posted by IndependentInvestor on June 9, 2010 under CFD Trading News, Spread Betting News |
Many people can not trade during work hours. After all we’re paid to work during that time and not trade on our own account. There are some alternatives.
Taking the long view is an obvious but often overlooked strategy for out of hours traders to follow. To take a topical example BP may look oversold on the basis that the amount that has been lost on its share value is three or four times the highest estimate for any cleanup operation. This is a medium term view, which is independent of any short term price movements.
There may be some gains that are being left on the table, but this can be a far better use of the time.
However there are many people who want to take advantage of the quick gains that contracts for difference and spread betting offer, who realise that they can think ahead of the market when news breaks. For these people the shares that are traded on the London Stock Exchange are not a very good option.
However there are alternatives. Big indices, such as the FTS100 index, are traded out of hours. This means that a bet on either the direction of the economy or the health of big companies in general can be made using either spread betting or contracts for difference.
The other market that is always open is the foreign exchange market. These are massively liquid as they are the biggest markets in the world, being the lifeblood of international trade. So instead of shorting oil companies, short the Norwegian Krone and other petro-currencies.