Pros And Cons Of Spread Betting : [Essay Example], 508 words GradesFixer

Haven't found the right essay?

Get an expert to write your essay!


Professional writers and researchers


Sources and citation are provided


3 hour delivery

This essay has been submitted by a student. This is not an example of the work written by professional essay writers.

Pros And Cons Of Spread Betting 

Download Print

Pssst… we can write an original essay just for you.

Any subject. Any type of essay.

We’ll even meet a 3-hour deadline.

Get your price

121 writers online

Download PDF

In UK, spread betting is unique as it offers tax-free earnings on short moves, while, the US markets are one of the most volatile markets. It is preferred by the investors because it can hedge exposures. It can be opted for hedging equity or stocks, portfolio or currency. In case of equity hedge, the investors can short single stock but there are risks of unlimited losses. Similarly, in the portfolio hedge, the investor can protect the tax free portfolio but one may have to pay the index overnight funding charges. In case of currency spread, the risk reduces in trading but it is highly complex. The leading exchanges for spread betting are Dow Jones, NYSE, S&P, and NASDAQ. The companies having highest market cap and most liquid are selected for betting. Some of the brokers are IG which accesses 15,000 markets and allows to trade outside the normal hours. It has a forex trading exchange and local offices in US.

Recently, the minimum bet size was reduced for the key indices, FX markets and commodities by IG Group as that will help traders who want to gradually enter this market. The company said it introduced close out procedures, added negative balance protection and standardised risk warnings to increase clients’ earnings. City Index, Spreadex and ETX are other providers who cover a number of markets. ETX is one of the growing platforms offering a number of stocks. The platform offers more than 3,000 instruments and the application is based on LCG technology which offers access to many brokers to get some of the tightest spreads. The spread betting model may be based on A book or B book models where A Book involves low risk approach and B book is given to the customers who always loses money in such trades. Many investors lose due to greater trader risks, and mostly the investors are advised to use only a part of the total investment amount to prevent risks. Regulators tightened rules on products where anyone could make highly leveraged bet using a bank card through apps or online platform to reduce risks. The changes in regulations and tighter regulations on betting hit shares of CMC that lost one-fifth of the share value on September 25th.

The betting firms were previously hit by the EU’s securities changes, where a ban on the sale of binaries for retail customer was introduced and this led to concerns overs losses in inherently risky products. CMC started investment firm in 1989 and the new changes hit the shares of the company that reduced by 20 per cent in early trade on September 25th. CMC said the total revenues from such trades i. e. spread betting and CFDs is expected to be 20 per cent less as compared to estimate. These products account for 88 per cent of the Morgan Stanley revenues and the changes will lower profits by 20 to 25 per cent. Basically, these can be owned without owning the underlying assets, although, new changes will be beneficial involving only the larger players.

Remember: This is just a sample from a fellow student.

Your time is important. Let us write you an essay from scratch

100% plagiarism free

Sources and citations are provided

Cite this Essay

To export a reference to this article please select a referencing style below:

GradesFixer. (2020). Pros And Cons Of Spread Betting . Retrived from
GradesFixer. "Pros And Cons Of Spread Betting ." GradesFixer, 26 Feb. 2020,
GradesFixer, 2020. Pros And Cons Of Spread Betting . [online] Available at: <> [Accessed 10 July 2020].
GradesFixer. Pros And Cons Of Spread Betting  [Internet]. GradesFixer; 2020 [cited 2020 February 26]. Available from:
copy to clipboard

Sorry, copying is not allowed on our website. If you’d like this or any other sample, we’ll happily email it to you.

    By clicking “Send”, you agree to our Terms of service and Privacy statement. We will occasionally send you account related emails.


    Attention! this essay is not unique. You can get 100% plagiarism FREE essay in 30sec

    Recieve 100% plagiarism-Free paper just for 4.99$ on email
    get unique paper
    *Public papers are open and may contain not unique content
    download public sample

    Sorry, we cannot unicalize this essay. You can order Unique paper and our professionals Rewrite it for you



    Your essay sample has been sent.

    Want us to write one just for you? We can custom edit this essay into an original, 100% plagiarism free essay.

    thanks-icon Order now

    Hi there!

    Are you interested in getting a customized paper?

    Check it out!
    Having trouble finding the perfect essay? We’ve got you covered. Hire a writer uses cookies. By continuing we’ll assume you board with our cookie policy.