About Spread Betting
The Basics
In a nutshell, Spread Betting is a tax–free1, commission free alternative
to trading shares and financial markets. This means that you don’t pay
Capital Gains Tax or Stamp Duty, and you don’t pay a stock broker’s
commission or account fees.
One of the major differences between trading the stock market and
Spread Betting is that with Spread Betting, you don't actually own the
share, you just bet on the performance of the share price.
Spread Betting is not limited to just shares, but also includes a wide variety of financial products such as
| » Indices | »Stocks | » Bonds |
| » Currencies | » Commodities | » Interest Rates |
If you think the financial product is going to go up, you buy a bet (in spread betting we call this going long). However if you think it is going to go down, you sell the bet (we call this going short or shorting). How much you win or lose then depends on how much the price goes up or down.
(7.06 – 6.06) x 100 x €5 = €500
(6.06 – 5.06) x 100 x €5 = €500
6500 – 6502.
(6500 – 6400) x €4 = €400
(6600 – 6500) x €4 = €400
$90.00 – $90.04.
sell at $90.00 for €1 per cent
(90.00 – 85.00) x 100 x €1 = €500
(95.00 – 90.00) x 100 x €1 = €500
Gearing & Leverage
One of the key advantages of trading with spread bets is that it offers ‘gearing’ or ‘leverage’. This means you can make a bet without needing to put down the full value of that transaction and, as your funds are not tied up, you can make several bets at once2.
Risk Management
Spread betting allows you to make exceptional profits but losses can soon mount up too. That is why paddypowertrader offers one of the industry’s most innovative risk management systems. Whenever you place a bet we will automatically create a stop loss order for you, which will protect you from major losses without capping your potential gains. Of course you can alter this stop loss order whenever and however often you like. However please note that, as markets can gap, stop loss orders are not guaranteed and you can lose more than your original deposit. Click here for more information.
An Internet Service
Paddypowertrader is an internet service, and we provide a complete set of tools to help you get the most out of your trading. Our charts can be customised to be as simple or sophisticated as you want, while our application lets you monitor all your favourite instruments, buy and sell with ease and check your profits or losses in real–time.
Enrol In The Academy
If you want to find out more about trading the Trader Academy is a dream come true! It includes video tutorials on using our trading platform, a variety of humorous articles on the financial markets and links to some of the resources the Paddy Power traders use day in day out.
Demo Accounts
Of course the best way to learn is to practice, which is why we’re offering you a paddypowertrader Demo Account. Setup a Demo Account now and, with £10,000 in virtual funds to play with, soon you’ll be competing with the big boys.
1 Tax laws may vary if you live outside if the UK or Ireland and can vary from time to time
2 In spread betting it is possible for you to lose more than your original deposit
