The Economist-"Spread betting"

[neil]

October 2013 article on Spread Betting.

Source: "The Economist."


http://www.economist.com/news/finance-and-economics/21588414-punt-any-other-name-going-global

Old article but may be of interest to some.
Bear in mind that this article is not the last word in spread betting

 

[0007]

An interesting find with 2 points of interest for me:


(1) Only 20% of spread betters make a profit, according to research at the Cass Business School in London.
Is this any different than traders using traditional brokers? Anyone know?


(2) Britain gives it the same tax break as gambling yet regulates it through its Financial Conduct Authority (FCA). In most other European countries the reverse is true: spread-betting gains are taxed as financial income but the activity is regulated like gambling. To add to the mess, America banned it as a form of online gambling in 2006 yet since 2010 has allowed the retailing of some forms of financial derivatives that replicate spread bets.
Sounds like UK has got it right here – at least, it suits me!

 

[counter_violent]

An interesting find with 2 points of interest for me:


(1) Only 20% of spread betters make a profit, according to research at the Cass Business School in London.
Is this any different than traders using traditional brokers? Anyone know?

Just applying the old 80% / 20% business rule would make it about right and yes I would have thought it's the same on traditional broker accounts.


(2) Britain gives it the same tax break as gambling yet regulates it through its Financial Conduct Authority (FCA). In most other European countries the reverse is true: spread-betting gains are taxed as financial income but the activity is regulated like gambling. To add to the mess, America banned it as a form of online gambling in 2006 yet since 2010 has allowed the retailing of some forms of financial derivatives that replicate spread bets.
Sounds like UK has got it right here – at least, it suits me!

I'm happy with it and the govt clearly are....easy to administer betting tax on profits made by providors.