Friday 10 April 2009

Investment Business

If you interested in investment business,this investment guide will really the most thing you should consider
Financial Spread betting is one of the most exciting and fastest growing ways of speculating on the movement of an underlying share or index and for many investors it has become a flexible and cost efficient alternative to trading ordinary shares.

Advantages of Spread Betting
NO Stamp duty is payable (saving 0.5% compared to a traditional share purchase.
Tax Free Profits: Profits on spread betting are not subject to capital gains tax*
No direct commissions or fees are paid to the spread betting company
You can profit from falling or rising markets
They are traded on margin therefore bets can be placed with a relatively small initial outlay
A single account can give you Access to far greater range of financial markets.
You can limit your risk using a ‘Stop Loss'
The ability to place very small bets, some companies let you place a trade of as low as 1p per point.
* Tax Laws are subject to change.

What can I trade?

Because you are not actually buying or selling the actual underlying instrument. the range of instruments that you ‘bet' on can be far greater than simply underlying shares.
You can bet on the spread bet of:
Stock market indices such as the FTSE or NASDAQ
Individual shares from the FTSE 100 and FTSE 250, but also from leading US and European shares
Currencies, FX
Commodities such as metals and oil
Interest Rates both short term and long term
Futures and options
Bonds

How does a Spread Bet work?

A spread bet is a bet on the future movement of an underlying instrument. In basic terms if you believe the underlying instrument is going to rise you place a buy bet, if you believe the underlying instrument is going to fall you place a sell bet. Unlike ordinary share trading you can befit from falling as well as rising shares or other financial instruments.
A spread betting company will quote you two prices for any underlying instrument a Bid (the price that you can sell at) and a ‘offer' just like you would for a normal equity (the price that you can buy at)the difference between these is known as the spread.
The movement of the underlying instrument is measured in points eg. For equities 1 point = 1 pence for indices usually 1 point = £1 and you can place a bet of any value against every point movement in the underlying i.e. £1 per point, £5 per point or £10 per point etc.
To close a bet you simply place an opposite bet on the specific instrument at the same £ per point. To close a buy bet you sell at the current quote and to close a sell bet you buy at the current quote.
Therefore the profit or loss that you make is the points difference between the opening bet and the closing bet multiplied by the value of your bet per point (i.e. £1 per point, £5 per point or £10 per point etc.)
Go take a look for CFD and start your new business way

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