Financial Spread Betting can be Profitable!
One of the main reasons individuals participate in financial spread betting is because the profits are specifically free of capital gains tax, regardless of the trader’s personal circumstances. Not to mention, financial spread betting is also exempt from income tax for individuals who can prove they have other sources of income on which they support themselves, rather than relying on the income of the betting itself. In spread betting the only way an individual is required to pay taxes is if they are relying solely on the profits from their financial spread betting.
The downside to financial spread betting is the lack of protection most spread betting companies provide their bettors. As a result, according to an article posted in The Times in April 2009, out of the approximately 30,000 financial spread betting accounts which were opened that year, almost 15% of the participants developed serious psychological problems as a result of losses. In addition, a case study from Cass Business School showed that only one in five individuals participating in financial spread betting actually end up coming out ahead. Although financial spread betting is strictly regulated by the Financial Services Authority the lack of protection for individuals who have lost significant amounts of money has resulted in serious suicidal tendencies in some of those who have lost millions betting against companies that went under during the recession.
While it is true that it is possible to make a massive fortune through financial spread betting, the odds are such that the risks associated are just as large.