Financial Spread Betting caused quite a stir during its 20th year stint as an optional investment tool for non-conventional profit seeking investors. The product has been widely recognised as a well regulated, trusted and prominent asset class among many U.K. based investors, some of which are the most financial savvy on the market.
Recent data from an industry report indicates a slowdown in the number of clients. Yet, the market participants feel financial spread betting took the next leap with more advance traders in its transactions in terms of higher numbers, therefore discounting the notion that spread betting is nearing an unstable ground. Financial spread betting is actually a financially traded contract (derivative) which provides a market on all kinds of instruments such as equities, bonds, and commodities which are considered as among the fastest-growing asset classes in the course of the decade. Its primary attraction among U.K. based investors is its tax haven wherein profits are exempted from tax. Furthermore, it ticks all the boxes for traders who are active in contracts for differences and futures.
Does volatility affect the spread betting environment?
The present state of the market resulted in a direct impact among operating metrics such as client acquisition and trading volumes. This was probably a result of the lower volatility and ongoing vagueness such as tapering which keep traders on the sidelines along with a bullish move in global equities.
The bottom line of the uncertainty that surrounded the recession that gripped the world’s economy on the effect on the market as U.K. spread betters were active albeit the crisis. Spread betting provided investor the capability in securing their declining stock portfolios with short spread bet trades.
Spread betting is presently undergoing adaptive changes in line with the FX and CFD markets. It’s moving out from the conventional trading styles and is now accepting advancements such as automated trading which was pivotal to the surge in number of traders using platforms of the same kind.
Some U.K. based spread betting companies have commenced the use of virtual currencies such as with Bitcoins. Spread betting brokers were amongst the dealers that came forwards in their own prerogative to transact with a virtual currency instrument of which Spreadex and IG Markets were among the first companies to offer Bitcoins during the first half of the year when Bitcoins began gaining momentum with major price hikes. There has been a strong demand from spread bettors that were highly optimistic in gaining leverage access to Bitcoin price movements on general. Experts are already regarding Bitcoin as digital gold having an enormous hedging potential.