This allows you go either go long (bet that the share price will go up) or go short (bet that the share price will go down) when you open a spread trade. Instead you effectively open a bet on the future movement of the stock in question. Firstly, you never actually take ownership of the shares you open a trade on. Spread betting on the other hand works differently. Owning the shares also entitled you to a dividend for every share you owned (assuming the company you bought the shares in was in a position to pay a dividend) and you were also entitled to attend and vote at the company’s AGM. You paid the broker who you bought the shares through a commission, assuming you sold the shares for a higher price then you bought them you paid capital gains tax (currently 25%) on any profits you made. You owned these shares personally and you held them until such time as you were ready to sell them (hopefully at a higher price than you bought them at). Traditional investment in shares involved calling up your stock broker or opening up an online share dealing account and buying x number of shares at a certain price. ![]() Spread betting (sometimes referred to as spread trading) is a way of trading the financial markets without ever having to purchase stocks or shares.
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