LONDON, July 19, 2012 /PRNewswire/ --
UK indices received a much-needed shot in the arm today (Wednesday, July 18), following the release of better-than-expected labour market data and, more importantly, an announcement by Chancellor George Osborne that the UK will underwrite up to £40 billion of investment in infrastructure as the government attempts to kickstart the struggling economy.
The government's Guarantee scheme is expected to reignite the economy via private sector funds and re-ignition schemes, and through another £10 million worth of guarantees that will be set aside to support UK exporters.
Separately, labour market data released by the Office of National Statistics showed today that UK unemployment fell to 2.58 million in the three months to May, and the unemployment rate fell to 8.1% for the same period, down from 8.3% in the previous quarter and beating expectations of a fall to 8.2%.
Not surprisingly, today's positive announcements helped the FTSE 100 to cement its incline higher, with the index closing the day up by over 50 points at 5685.77.
As an investor, you could profit from the recent turn of events irrespective of whether you expect the FTSE's upward momentum to continue peaking higher, or slump lower once the initial euphoria has ebbed away.
While conventional traders would be able to profit only if the euphoria pushes prices higher, as a spread bettor, you could benefit even if prices were to fall in the coming days or weeks.
Take a Position on Rising or Falling markets with Spread Betting
Spread betting is an alternative to conventional trading, enabling you to profit irrespective of whether prices are moving up or down. This means that as an investor, you could benefit even if prices move lower in the coming days. All you need to do is take a position based on which way you expect prices to move in the near future. If, for example, you expected the FTSE 100 to climb higher in the coming days, you could take a 'buy' position on the index. If, on the other hand you expect prices to fall, you would take a 'sell' position on the index.
You would make a profit so long as prices move in the direction you anticipated. If prices moved in the opposite direction, however, you would make a loss.
Benefits and Risks of spread betting
Opening a spread betting account with a provider such as Finspreads would enable you to take a position on thousands of markets including indices, shares, currencies, commodities and more. Spread betting is a leveraged product, meaning that you would only have to deposit a fraction of the total trade value, typically between 1% and 10% of the value of your trade to open the position. Leverage can be a double edged sword, however, and you could end up losing more than your initial deposit if the trade goes against you.
Since you do not own the physical instrument on which your spread bet is placed, you are exempt from stamp duty when spread betting in the UK. Spread betting is also currently exempt from UK Capital Gains tax. Although it is important to remember that tax laws are subject to change in the UK and may depend on individual circumstances.
Finspreads is a leading online financial spread betting firm, offering access to thousands of instruments on the world's financial markets.
The company pioneered fully interactive online spread betting in 1999 and continues to invest in technology to ensure that its service remains amongst the market leaders.