LONDON, April 27, 2012 /PRNewswire/ --
The UK was plunged into a double dip recession on Wednesday 25 April 2012, sending alarm bells ringing among the financial community. City traders are now bracing themselves to face the onslaught of the double dip recession if growth deteriorates further, with many agreeing that the current volatility may not present the ideal scenario to buy shares or other asset classes physically.
While this may be true for more conventional forms of trading, spread betting could present an excellent opportunity to benefit when market conditions are volatile.
Why Spread Bet on a Volatile Market?
With spread betting, an alternative to conventional trading, you can profit from moving prices, irrespective of whether they are rising or falling.
You simply take a position on whether you believe that prices will rise or fall in the coming days. You stand to make a profit so long as you were right and prices move in the direction you had predicted.
For example, if you think prices will rise, you buy and your profits will rise with any increase on that price. Alternatively, if you think prices will fall, you sell and your profits will rise in line with any fall in price. On the other hand, if markets move against you, you will encounter a loss.
Spread betting offers numerous benefits including leverage, tax-free profits* and the ability to speculate and potentially profit from falling markets.
Who should I spread bet stocks with?
UK-based financial spread betting provider Finspreads offers prices on thousands of individual shares, indices, currencies, commodities and more.
You can also spread bet on entire sectors such as banks, miners, technology etc, saving you the risk of taking a position on the future direction of individual company's' shares price and giving you a more diversified bet across the prospects of an entire sector.
How do you spread bet sectors?
When you spread bet financial markets, such as sectors, you speculate on the direction in which you expect an entire sector (say banks or miners) to move in the coming days, or for however long you expect your spread bet to last.
For example, if copper prices are rising and you are of the opinion that this will have a positive impact on mining companies, thus pushing up their share prices, you open a 'buy' spread betting position on the mining sector with Finspreads.
Your profits will rise so long as you were right and the mining sector moves in the direction you had predicted. Alternatively, if you believe that copper prices are set to weaken and that mining companies will suffer a fall in their share prices as a result, you could 'sell' or go 'short' the entire mining sector.
Remember, however, that with spread betting, you will make a loss if you are wrong and prices move in the opposite direction.
See how you can learn to spread bet sectors with Finspreads.
Spread betting with Finspreads offers traders a broader position on the direction of a market meaning their potential for profit and loss does not rely solely on the performance of an individual company.
As a leveraged product, spread betting comes with high risk; there is the possibility that you could incur losses greater than your initial deposit. Ensure you fully understand the risks before you start trading.
Find out more about the benefits of spread betting with Finspreads, one of the leading providers of spread betting in the UK.
*Spread betting is currently exempt from UK stamp duty and Capital Gains Tax (CGT). However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
Finspreads is a leading online financial spread betting firm, offering access to thousands of instruments on the world's financial markets.
The company pioneered fully interactive online spread betting in 1999 and continues to invest in technology to ensure that its service remains amongst the market leaders.