Why Spread Betting?

• What is Spread Betting?
• Why Spread Betting?
• Our Spread Betting Account
• How it works

Financial Spread Betting is quick, flexible and easy to use.

Tax Advantages

Financial Spread Bets have the advantage that profits are currently not subject to the UK Capital Gains Tax regime, although this means that any losses cannot be offset against Capital Gains Tax.

As Financial Spread Bets do not confer ownership rights, bets on shares are currently not subject to UK stamp duty. Financial Spread Bets therefore save the current 0.5% (UK) Stamp Duty levied on share purchases. Tax laws may change and are subject to individual circumstances.

Leverage

Financial Spread Bets are a leveraged product, which means that the initial deposit to place a bet is a fraction of the value of the total position. This leverage gives investors the potential to make greater profits (or losses) from the same initial investment. The initial deposit or margin required to open a Financial Spread Bet is in effect a down-payment on any potential loss which the customer may incur. Of course, losses may exceed this amount and the customer would also be liable for any additional losses. On closure of a bet, the deposit is returned, leaving the crystalised profit or loss.

Flexibility

• Access to a wide range of financial instruments from a single account.
• Instant execution in standard size or below as we make firm prices. (Larger orders may be delayed as we may hedge the position in the underlying instrument).
• No ownership of the instrument is conferred, just access to the price performance and as a result there is currently no liability to UK stamp duty. Tax laws may change and are subject to individual circumstances.
• All bets are in Sterling which means that you avoid any foreign exchange exposure.
• Online and telephone dealing so that you can deal how and when you want to.

Hedge your bets

You can use Financial Spread Betting to reduce the risk of unexpected market movements on the value of your equity portfolio. For example, you may have a long term share portfolio that you know you want to keep hold of, but you are worried that it may lose value in the short term because you think the markets are heading down. You can take out a Financial Spread Bet that will help mitigate any short term loss, but at the same time might assist you to make a long term gain.

Please be aware that FSB carries a higher level of risk and there is the possibility that you may lose more than you initially invested.

A small price movement in your favour can result in a positive return on the money placed on deposit, however, a small price movement against you may result in substantial losses, possibly more than the money placed on deposit. Prices can move quickly.

TD Waterhouse Financial Spread Betting is a trading name of City Index Limited (CI), who is a provider of financial spread betting and whose head and registered office is City Index, Park House, 16 Finsbury Circus, London EC2M 7EB. For the purposes of financial spread betting any contract is between you and CI and all dealing, administration and settlement is carried out by them and TD Waterhouse Investor Services (Europe) Limited are not responsible for any of the functions they perform. Your account is held with City Index Limited (CI), which is authorised and regulated by The Financial Services Authority (FSA Registered Number: 113942).