Law Articles And Legal Issues

The Basics of Tax-Free UK Financial Spread Betting

Financial Spread Betting (or Trading) offers a tax free method of speculating on financial markets.

Quite simply, if you think a particular index, share, commodity, currency or sector will rise, you place an UP bet. This also referred to as a Long position or a buy.

On the other hand if you think the particular market will fall you place a DOWN bet (commonly referred to as a Short position or a sell).

The amount of profit you make or money you lose depends on how right or wrong you were and how much you risked per point.

At the time of placing the bet you decide how much you would like to risk per point. This can be as small as £0.01 or a large amount such as £1000+.

Most bets work on either a daily, rolling or contract month basis.

A Daily bet is one which is only open during one particular trading day. You could place the trade at 11am and, if you do not close it beforehand, it will be closed at the end of trading (4.30pm in the case of the FTSE 100).

A Rolling bet is one which, unless you state otherwise, rolls through to the next trading day. This costs a little money and your bookmaker should be able to give you more details.

A trade opened for a particular Contract Month will end up to 3 months in the future. There will be a specific date when the contract finishes known as the Expiry Date or Last Trading Day.

For example: if you opened a trade on the FTSE 100 September contract, the expiry date will be in September, usually the third Friday. The trade will expire at the close of trading on that day.

Some bookmakers also run other types of bets such as weekly and also "Year End".

Day-traders or "scalpers" will tend to use Daily or Rolling bets but as a beginner it may be wiser to trade over a longer time frame.

If you decide to day trade, bear in mind that you must be correct almost immediately to profit. If you select a longer time scale, you have some breathing space for the trade to turn around.

An example of a trade

It is June and the FTSE 100 is trading at around 5000 and you are confident that it will go higher before September. To back your opinion you decide to use a spread bet.

Logging onto your internet account, the bookmaker quotes you 5010-5020 for the FTSE 100 September contract.

This means that you can buy (go long) at 5020 or sell (go short) at 5010.

Spread betting quotes are always displayed as two seperate prices. You buy at the higher price and sell at the lower one. The "spread" itself (in this case 10) is a charge added by the bookmakers. Different companies have different spreads, some larger than others.

As you are backing the market to go higher, you would buy £1 a point (or however much you like) at 5020.

September arrives and you are close to the expiry date for the contract.

Rather than wait for the last trading day you decide to take your profit as the FTSE 100 is now quoted at 5305-5315.

You close your position by selling £1 per point at 5305.

As you were correct in thinking the FTSE would rise, you have now won £285:

(5305 - 5020) x £1 = £285 tax free

There is no need to hold your position until expiry, you can close it at any time to take your profit or limit your loss.

If the FTSE was trading at 5500 in July, you could have closed then for more profit. All you have to do is log into your account and place another trade in the opposite direction for the same amount per point to close.

Of course, if the FTSE had gone lower in this example you would've lost money but you can use stop losses to limit the loss.

Ben Catt is an active financial trader and runs a free website containing hints, tips and information about tax-free financial spread trading and betting in the UK. The site can be found at http://www.FinancialSpreadTrading.co.uk. He also runs a business opportunity information site - http://www.BizOppsUK.com

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

Other Law Sites
Search The Internet For Other Law Sites

Law Books
Search For Law Books At FindaBook.com

New Partnership Expands Digital Current's Legal Services
Starting this spring Digital Current begins a new partnership with Trial Solutions out of Houston, Texas. This partnership expands Digital Current's already expansive legal services. 95% of Digital Current's clients come from the legal field. Business Manager Leland Macon has high expectations for this new alliance.

Amlaw Top Firm Akin Gump Warrant Agreement Draft Released by RealDealDocs.com, the Online Legal Document Source
RealDealDocs.com offers various online legal documents from agreements to contracts for your downloadable and printable convenience. In this release is a copy of the Victory Acquisitions Corporation warrant agreement drafted by Amlaw top revenue per lawyer Akin Gump law firm.

Over 400,000 Australians Predicted To Pay $500 Tax Surcharge
Leading health insurer, HBA predicts more than 400,000 Australians will pay an extra $500 or more a year in tax because they didn't have private hospital cover, based on recent figures from the Australian Taxation Office (ATO).

Railroad Accident Lawyer Says: Buckle Your Seatbelts
Massive train crashes seem the dramatic stuff of movies and novels, billowing steam engines destined for disaster, fixed irreversibly on track to collide. Indeed, in the 19th century train companies used head-on train collisions as a publicity stunt.

Georgia Gift Credit Card Law
The Georgia Gift Credit Card Law has been in effect since 2005 and protects consumers upon the purchase of both Gift Credit Cards and gift certificates within the state. The law also applies to other prepaid cards bought in Georgia.

More Things To Know About Child Custody Lawyer In Maine
Sacrificing the welfare of your child is inhumane?

Local Attorney Earns Prestigious Designation
Encino-based attorney Gerald L. Kane was honored with the coveted "Personal Family Lawyer" (PFL) designation in a ceremony held last week in San Francisco, CA.

Phoenix Worldwide Industries, Inc. offers Rapidly Deployable, Mobile Surveillance Platform for Facilities Security and Law Enforcement Agencies
Phoenix IVS, division of Phoenix Worldwide Industries, Inc., integrates Cellular or Wireless Mesh Intelligent Video Surveillance into ?Urban Watch Mobile Surveillance Platform?

The Legal Impact of Parentage
When one thinks of being a parent the initial points for consideration tend to be financial (can we afford it?), practical (how will our lives change?) and pragmatic (what do we need to do to prepare?). However, too few people think of parentage as a legal relationship, subject to a variety of different laws across a number of different areas. Whilst some of the legal effects are positive, some require a greater understanding of the nature of paternity in order to fathom whether or not the child in question can be considered to have a particular parent.

Free Income Preparation Tax Software In The Internet
An income tax is a financial charge imposed on the financial income of entities like persons and corporations. In short, any legal entity who has a value can be taxed which somehow makes sense. To see it in a positive light is to view tax as a contribution to society.

Law Firms: Learning and Adopting of Corporate Methods
Unlike other industries, law firms have not felt any of the intensive pressures of competing with each other, until just 15 years ago.

Resolving Disability Benefit Issues with Brentwood Social Security Law Attorneys
Brentwood is one of western Los Angeles most affluent districts. The place was originally an agricultural district and was popularly known as home of the Pacific branch of the National Home for Disabled Soldiers and Sailors during 1880s.

NAACP Joins Discrimination Lawsuit Against SBA Leading Advocacy Organizations Support Litigation; SBA Under Attack For Failure to License Minorities;
An African-American led firm has brought a $100 Million lawsuit supported by SBA Inspector General report which finds bias in the license process. The NAACP with other leading consumer and civil rights organizations have joined in to monitor the lawsuit. SBA has allegedly rebuffed Senators John Kerry and Orrin Hatch inquiries on the program.

Celebrity Endorsed Website Turns Phone Bill Excise Tax Refund into Peace Movement Dividend
U.S. taxpayers looking for ways to help end the war in Iraq can now go directly to RefundsForGood.org. This new celebrity endorsed web site shows both the average taxpayer and corporations how to easily redirect their one time phone tax refund to a non-profit working to foster peace in the world.

Small Box Web Design Launches New Web Site For Tucker | Hester Law Firm
Small Box Web Design launches Tucker-Hester.com - Indianapolis Business Bankruptcy Attorneys.