Spread betting is one alternative method to make money off the stock markets. In traditional stock trading, stocks are purchased, their value changes over time and they are sold at some point for profit/loss; within this cycle dividends may be paid on the shares. With this sort of investment you take ownership of the shares and own some percentage of the company.
When you're purchasing shares you have to pay stamp duty on the amount you pay for the stock and as you sell them you need to pay capital gains tax on the amount they are sold for. This means that in this form of financial trading the amount of money you need to make from the stock must take into account the amount of tax you are paying, otherwise you may actually be losing money even though the shares have increased in value.
Spread betting is a form of wagering which does not have a fixed outcome like fixed odds betting does. In spread betting the amount you are paid depends on the accuracy of your bet. In financial spread betting you bet that the share price will increase of decrease, your winnings/losses are determined per point of change on the stock market. So if you bet that the price will increase and your bet is  £2 per point, if the share increases 5 points you win $10; however, if it is down  £10 you lose this amount. The winnings and losses are unlimited, which is in stark contrast to fixed odds betting.
If you are financial spread betting in the UK then you are exempt from both capital gains tax and stamp duties; in addition to this you do not need to pay income tax if it is not your primary source of income. This is a big reason that some people in the UK prefer to spread bet than to actually purchase stock which incurs a greater number of fees. The tax breaks on spread betting are mainly in the UK and some other European countries, but many others treat the income made from this a taxable income. In these countries spread betting is not as popular, but there is still some interest as it is a very flexible type of investment. With spread betting it can be easier to make profits as a share falls than in traditional trading, which has been useful in times where short selling has been banned.
When you're purchasing shares you have to pay stamp duty on the amount you pay for the stock and as you sell them you need to pay capital gains tax on the amount they are sold for. This means that in this form of financial trading the amount of money you need to make from the stock must take into account the amount of tax you are paying, otherwise you may actually be losing money even though the shares have increased in value.
Spread betting is a form of wagering which does not have a fixed outcome like fixed odds betting does. In spread betting the amount you are paid depends on the accuracy of your bet. In financial spread betting you bet that the share price will increase of decrease, your winnings/losses are determined per point of change on the stock market. So if you bet that the price will increase and your bet is  £2 per point, if the share increases 5 points you win $10; however, if it is down  £10 you lose this amount. The winnings and losses are unlimited, which is in stark contrast to fixed odds betting.
If you are financial spread betting in the UK then you are exempt from both capital gains tax and stamp duties; in addition to this you do not need to pay income tax if it is not your primary source of income. This is a big reason that some people in the UK prefer to spread bet than to actually purchase stock which incurs a greater number of fees. The tax breaks on spread betting are mainly in the UK and some other European countries, but many others treat the income made from this a taxable income. In these countries spread betting is not as popular, but there is still some interest as it is a very flexible type of investment. With spread betting it can be easier to make profits as a share falls than in traditional trading, which has been useful in times where short selling has been banned.
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