Sectors Spread Betting Enables Potential Profits from Fluctuating House Prices

LONDON, May 8, 2012 /PRNewswire/ --

A recent survey by Halifax revealed that UK house prices fell sharply in April, dropping 2.4% on the month after a brief rise in March 2012. The latest slump can be attributed to the end of the stamp duty break for first-time buyers, which concluded on March 24.

April's drop may be a kick in the teeth for the real estate sector that's already struggling to keep from collapsing like a pack of cards. For spread betting professionals, however, it represents the perfect opportunity to net a tidy profit.

What exactly is Spread Betting?

Spread betting enables you to make tax-free profits* from rising as well as falling market prices. Your potential to profit depends on your ability to speculate whether prices will rise or fall in the near future.

For example, if you believe that the price of a particular financial instrument (eg stock, index or commodity) will rise in the coming days, you 'buy' or go long that instrument. If, on the other hand, you believe that prices will fall, you 'sell' or go short that market.

If you were right and prices move in the direction you had anticipated, you stand to make a profit. If, however, prices in the opposite direction, you stand to make a loss. Learn more about spread betting with Finspreads.

How to profit from falling house prices with sectors trading

Every single share listed on a stock exchange belongs to a particular sector, eg mining, banks, technology, real estate etc. With sectors spread betting, you effectively take a position on the direction of an entire sector, without speculating on the performance of an individual company within that sector.

Summary

In this scenario, fluctuating house prices are almost certain to put negative pressure on the housing market, thus forcing down the share prices of individual stocks within that sector, such as Persimmon or Hammerson.

Sectors betting is deemed a safer option than speculating on individual stocks, as sector-wide price changes are usually reflective of broader trends affecting that industry and are therefore less subject to short-term price swings. and volatility, which make speculating on individual stock very difficult.

UK Spread betting in the UK is currently free from stamp duty and capital gains tax - another distinct advantage over other forms of trading. Remember, however, that tax laws are subject to change and depend on individual circumstances.

Find out more about the benefits of spread betting with Finspreads, one of the leading providers of spread betting in the UK. Alternatively learn more about the differences between spread betting and standard trading.

*Spread betting is currently exempt from UK stamp duty and Capital Gains Tax (CGT). However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

About Finspreads:

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.