Although spread betting profits are currently tax free due to the betting nature of spread betting, tax laws can and do change. Talk to an expert in tax law to ensure that your profits remain tax free. Also if you pay tax in another jurisdiction than the UK, you may find that these profits are subject to tax.

Spread betting is essentially betting with margins that can bring significant profits and significant losses. Make sure you fully understand both the upside as well as the downside of spread betting. You must be able to cover your bets if you should experience a significant loss from a declining investment that is heavily margined.

The basic concept of spread betting is that your are betting on the decline or increase of a given investment, without actually owning the investment. If you are betting a given stock will increase by 10 points and you are betting five £'s per point, and if the investment does increase by 10 points then you will have made 50 £'s if you then trigger a sale of the investment. Conversely if the investment declines by 10 point, then you have lost 50 £'s. Wide swings in an investment can trigger huge gains or losses, so you need to be prepared to act quickly in situations such as this.

Most of our partners provide 24 hour service, on-line training, provide immediate dealing and allow you to limit the risk by using limit or stop orders.

In some of our other articles we will discuss financial spread betting, fine spread betting, spread betting indices, spread betting beginners and spread betting systems. Before you embark on investing using spread betting, visit one of our partner sites listed in our directory and review the guidelines in detail that they provide to ensure that you fully understand all of the guidelines and rules that they follow.