Spread betting

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10. Practical advantages - volatile markets

Volatile stock markets, where prices move through wide price ranges on a daily basis, can be unnerving for ordinary share investors. Do you sit it out and do nothing, or try to take advantage of the volatility by buying low and selling high?

If you decide to actively trade the market, you could buy and sell shares or you could place spread bets. Spread bets offer some advantages over buying shares:

• It is free of commission and dealing costs.
• There is no middleman - i.e. broker - taking up time and money - both vital elements in quick markets.
• You don't have to pay capital gains tax on profits. CGT can get extremely complicated, and time confusing for those moving in and out of the equity markets fast in volatile markets.

The combination of going short and long, buying and selling spreads fast, is one of the few effective ways of profiting from volatile stock market movements. Of course, the risks are greater because your potential loss is much higher.

1. What is spread betting? 2. A brief history 3. Spreads on individual equities 4. Spreads on an index 5. Performance spreads 6. Other financial spreads 7. Practical advantages - leverage 8. Practical advantages - going short 9. Practical advantages - hedging 10. Practical advantages - volatile markets 11. Practical advantages - tax 12. Dynamics - think short term 13. Dynamics - the size of the spread 14. Dynamics - upside and downside 15. Dynamics - length of bet 16. Strategy - bet only what you can afford 17. Strategy - cutting losses 18. Strategy - stop losses and limited risk bets 19. Strategy - taking profits 20. Strategy - arbitrage 21. Opening an account 22. Placing a bet and managing your account 23. Regulation 24. Some more tips 25. Conclusion

• Financial Spread Betting
• The Beginner's Guide to Financial Spread Betting