What Is The Difference Between Financial Spread Betting And Stock Trading?
Financial spread betting, as well as stock trading is related to shares and their prices. But that is where the similarity ends. In fact, there are a lot of differences between stock trading and financial spread betting.
Taxes
There are no taxes on the profits gained through. This is because there isn’t actual exchange of shares between the company and the one who speculates. It is just a contract and FSA considers it to be a form of gambling. Unlike short selling of shares, financial eliminates the risk as one only has to guess the rise and fall of share prices rather than try to buy and sell them.
Scope of revenue
You can invest your money by buying stock of whichever company you prefer. In the long run how you earn money is when the prices of the stocks that you have bought have risen, so that you could sell them at a profit. There is no limit to how many different companies’ stock you can buy. However, with, the companies usually take bets only on the stock market indices. So if the index goes in accordance with your prediction you earn money. But if the index goes against your prediction then you lose money. But overall, the scope for earning revenues is limited in spread betting.
