What is spreadbetting? - an alternative, flexible and tax-efficient way to back your judgement in the financial markets.

What do points make?

Spread betting is a popular and relatively new way of trading, instead of the traditional method of buying and selling shares through a stockbroker, spreadbetting allows you to place a trade on a £(s) per point basis. For example, in it's simplest form, if a share price moves from £2.00 to £2.50, it has increased 50 pence or 50 points. Had you placed a bet for £10 per point, you will have made £500. Had the share price decreased 50 pence or 50 points, you would have lost £500.

Just like Brucie said "Points make prizes". You can earn points going long or short of a huge range of markets; UK and US equities, global indicies, commodities and currencies, to profit from rising or falling prices. You simply 'buy' if you think that the price is set to rise, or 'sell' if you think it will drop.

All your profits are absolutely free from UK capital gains and income tax.* And there is no commission to pay when you open or close your bet. The only charge is the dealing spread.

Example: 'Buying' Vodafone

Say Vodafone is currently trading at 139.1/139.4p. Our Daily quote for Vodafone stands at 139 - 139.6, and you decide to 'buy' £50 per point at 139.6; the offer price.

This means you will make £50 for every point that the quote rises above 139.6 and lose £50 for every point the quote falls below 139.6.

The live price for Vodafone updates with every market move throughout the trading day. By mid-afternoon the quote has reached 143.6 - 144.2 and you decide to take your profit.

You close your bet by 'selling' £50 per point at 143.6; the bid price. You have made (143.6 - 139.6) x £50 = £200. And with no tax to pay!

* Tax law can, of course, be changed or may differ if you pay tax in a jurisdiction other than the UK.