Who Can Spread Bet?
Spread betting is perhaps most closely associated with individual traders, and with those looking to manage their own assets to generate a better return. As an individual trader, the options for returns from more secure types of investment such as bank deposits and share dealing have plummeted, as a result of tighter financial and economic conditions. This has led to savings rates of just a couple of percent, and in any event covering the impact of inflation on savings and investments has become increasingly more difficult.
With spread betting, individual investors are finding they are able to generate a far more significant return, albeit at a greater risk than many alternative investment styles. Even managing a yield of 10% over the course of a year is sufficient to provide a market-beating rate of return, and with the hefty leverage portions built in to spread betting transactions, this is a more than achieveable goal.
Aside from private individuals, spread betting is also becoming a more important tool for trading funds, as a means of delivering an additional degree of flexibility to their portfolios and allowing for cost-effective returns on client investment. While the risks of spread betting resign it to being a marginal player in the world of professional investment, it is nevertheless present as part of diversified portfolio management, and it is becoming an increasingly widely used aspect of the investment industry.