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Spread Betting Benefits & Risks

Advantages of spread betting

Why might financial spread betting with InterTrader appeal to you?

InterTrader quotes Futures contracts as well as Rolling Daily contracts, and you can choose to trade all your markets in the same currency.

For further information on the full range of markets we offer, please see our Market Info tables.

WIDE RANGE OF MARKETS


NO COMMISSION OR FEES

InterTrader does not charge any commission or brokerage fees when you open and close trades. We make our profit from the low spreads we apply. There are no fees for holding an account, so you can leave your account with a zero cash balance at no cost.

BULL OR BEAR

You can go long or short of any market, to profit from both rising and falling prices.

TRADE ON MARGIN

Trading on margin greatly increases the leverage of your investment capital, as your initial outlay reflects only a fraction of your total exposure on a market.

For example, if you buy 500 shares of HSBC at 500p, your total investment is £2500. The equivalent spread bet would be to buy £5 per point at 500p. This gives you the same total exposure of £2500, but you only need 4% of this amount, or £100, in your InterTrader account in order to open the position. With only £100 of margin required to open a trade worth £2500, this means that you have freed up £2400 of your capital to put to use elsewhere.

TAX-FREE PROFITS*

Any gains you make from financial spread betting are completely free of UK Capital Gains Tax and stamp duty. Your profits are 100% tax-free.*

RISK PROTECTION

At InterTrader we want to make sure you only take on manageable risks. You can attach a stop-loss to any position you open, so your financial risk is significantly reduced, and amend your stop level at any time to move it either closer to your opening level or further away (subject to available funds on your account). Note that stop-losses are not guaranteed and may be subject to slippage and market gaps in volatile market conditions.

 

Other benefits of spread betting with InterTrader include:


Comparison with traditional stockbroking

Traditional stock investment
(UK stock held for 30 days)

Buy 10,000 shares@ 140p
Cash outlay£14,000
Sell 10,000 shares@ 200p
Gross profit£6000
Stamp duty(£70)
Commission (buy/sell)(£100)
Tax @ 18%(£1080)
Overnight financingNA
Net profit£4750
Return on Capital Employed34%
InterTrader spread bet
(UK stock held for 30 days)

Buy £100 per point
@ 140.1p
Cash outlay (4% margin)£560
Sell £100 per point
@ 199.9p
Gross profit£5980
Stamp dutyNA
Commission (buy/sell)NA
Tax @ 18%NA
Overnight financing(£90)
Net profit£5890
Return on Capital Employed1052%

 

What are the risks?

Although you can make substantial profits from financial spread betting, it is important to note that it carries a high level of risk to your capital, so you should only trade with money you can afford to lose. InterTrader gives you the facility to limit losses by applying a stop-loss to each trade you place, but you may lose more than your initial deposit if the market gaps through your stop level.

In the above example, consider that, although your initial outlay is just £560 at our standard margin percentage, you could lose more than this amount due to sudden adverse market movements. In an extreme scenario you could still lose your full exposure of £14,000, for example if the public company goes bust and shares become worthless.

Before you apply for an account, please ensure that you familiarise yourself with the risks involved and that spread betting matches your investment objectives. You may wish to seek independent financial advice before applying for an account. If you are new to trading, we recommend that prior to applying for a live account you open an online Demo Account and follow our User Manual.

If you want to know more about the risks involved, please read our full Risk Warning.







*UK taxpayers only. Tax treatment depends on the individual circumstances of each client and may change in the future.



Become an InterTrader today… it’s the smart trader’s choice

Losses can exceed deposits CREATE YOUR ACCOUNT OPEN A FREE DEMO


Spread betting and CFD trading are leveraged products and as such carry a high level of risk to your capital which can result in losses greater than your initial deposit. These products may not be suitable for all investors. CFDs are not suitable for pension building and income. Ensure you fully understand all risks involved and seek independent advice if necessary.

InterTrader is a trading name of InterTrader Limited which is owned and controlled by GVC Holdings PLC. InterTrader Limited is authorised and regulated by the Gibraltar Financial Services Commission and registered with the Financial Conduct Authority in the UK, ref 597312. Registered address: Suite 6, Atlantic Suites, Europort Avenue, Gibraltar.