Spread betting could be set to become an even more popular alternative to traditional trading channels with volatile equities markets and consistently low interest rates, according to a senior industry analyst, as traders seeks additional ways to generate a return on their money.
Patrick Connolly of AWD Chase de Vere has suggested that as a result of low interest bearing savings accounts and unruly stock markets, private individuals are experiencing increasing difficulties in generating a suitable return beyond inflation from savings and stock trading, and as such may be increasingly inclined to look towards leveraged trading options such as spread betting to bump up returns.
While spread betting, for the most part, represents a riskier investment strategy than certain other forms of trading, recent industry thinking backed up by numerous polls suggests a willingness to move into less stable territories in the hunt for satisfactory returns. As the hangover from the credit crunch and the global recession continues to endure across markets
Furthermore, the tax advantages of spread betting in light of a pending change to CGT rules could be yet another pull for investors looking to maximize returns. And with increasing innovation throughout the sector, and an ongoing price war between online brokers constantly shaving their spreads, the industry could be set to enjoy even stronger growth as an increasing number of traders make the switch to spread betting. If Connolly’s expert opinion is to be believed, this could spell yet more good news for the spread betting brokers out there, at a time when traditional market investing appears to be faltering.