LONDON, October 26, 2010 /PRNewswire-FirstCall/ -- Financial spread betting was born in London in 1974, the brainchild of an unemployed stockbroker named Stuart Wheeler. His idea was to give people the opportunity to trade on the movements of gold prices without having to pay the exorbitant cost required to actually own the physical commodity.
Wheeler introduced the concept of spread betting to some of his friends, deciding a sell price and a buy price and then allowing them to spread bet on whether the index would rise or fall over the following week. Although losses incurred could be greater than a trader's initial outlay, It was immediately evident that one of the advantages of financial spread betting (http://www.cityindex.co.uk/spread-betting/) was the fact that it would allow traders to profit from a falling market as well as a rising one.
Word of financial spread betting soon spread across London, and in 1975 Wheeler turned his idea into a company. By creating a more accessible, not to mention tax-free*, alternative to standard investing Wheeler had opened the door for a new generation to join the financial markets, at first spread betting solely on gold and later on currencies, commodities and indices as the market expanded.
Boosted by the economic boom, other spread betting providers started to appear in the 1980s, with City Index (http://www.cityindex.co.uk) arriving first. In the years that followed, spread betting would reach across every conceivable financial market, from equities to futures. Until the 1990s, however, the lack of sophisticated technology available worked against spread bettors and spread betting providers alike. Traders were unable to access up-to-the-minute market news and spread betting providers were unable to offer real-time spreads for their range of markets.
Consequently, when the mid-1990s signified the start of the technology boom, financial spread betting took a huge step forward. Stock market activity became headline news, dotcom stocks went through the roof and spread bet providers launched faster online trading platforms with new tools such as automatic stop loss orders. Most recently, in 2009, City Index launched City Trading(TM), its first spread betting and CFD trading iPhone(TM) app (http://www.cityindex.co.uk/trading-platform/iphone-trading-platform.aspx), meaning that spread bettors today can finally trade whatever, wherever, whenever they want.
Financial spread betting has come a long way since 1974. Be a part of where it goes next at http://www.cityindex.co.uk/spread-betting/.
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
*Spread betting and CFD trading are exempt from UK stamp duty. Spread betting is also exempt from UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
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SOURCE City Index