Spread Betting on Shares
An increasingly popular method of dealing in shares is to use spread betting.
I G Index introduced spreads on the shares of a few FT100 shares in 1995 and
has since expanded rapidly to offer spreads on nearly all UK companies capitalised
at over £10 million, every S & P 500 and Nasdaq 100 stock in the USA,
together with many leading Asian and European shares.
While the concept of betting on a shares movement might seem strange at first the service that IG Index offer has very substantial advantages compared to conventional share dealing.
Tax Free Profits
Because the transaction is a bet, your profits are free of capital gains tax
and income tax.
Gearing.
You can take up a position in stocks & shares without having to provide
the full contract value, as would be the case when dealing with a stockbroker.
Instead you make a margin deposit as collateral, usually about 10% of the contract
value for shares in major companies. IG Index can agree to provide a credit
account to approved customer’s, this allows you to deal without putting
a deposit down, providing you keep trading within the agreed waived deposit
limit.
Low transaction costs
There is no commission charge or stamp duty to pay, only the dealing spread.
Bulls & Bears are welcome
You can bet that a share will rise (go long) or that it will drop (go short).
The majority of smaller investors can only profit if a conventionally purchased
share rises in value, a drop in value means a loss. However with the flexibility
of spread betting it is perfectly possible to short a company’s shares
if you feel they are due for a downturn and make a tidy tax free profit.
Small minimum deal sizes
You do not need to make large bets. The minimum deal size for some UK shares
is only £1/point, equivalent to 100 shares.
Immediate dealing
IG will quote you a price and you can make the deal immediately with no frustrating
wait for execution.
Controlled Risk facility
IG Index offers a guaranteed stop-loss facility on all UK stocks and the vast
majority of other shares they deal in. This facility normally costs only 0.3%;
paid only once no matter how many times the position is rolled over.
Types of bet.
Three types of bet are available from IG Index on individual shares: Quarterly
bets, Daily bets, and bets on share options.
There are wide ranges of share and index spread bets available from IG Markets.
For further, more detailed information, they have produced an 88 page dealing
handbook to guide you through the process. Visit their website at IGMarkets.com
.