Why do people criticise spread betting?

Spread betting is what many, including the likes of WhatInvestment, would call an ‘alternative trading strategy’.

Having watched the global financial markets crash and burn in the last few years, many people across the world will be re-considering or being forced to think again about their financial plans.

Spread betting allows investors to access a wider range of markets than perhaps they otherwise could have done, including spread trading on all sorts of indices, foreign currencies, commodities and much more.

Spread betting does have its critics. Many accuse the trade of being more gambling than investment and believe it is wrong to make a profit from a product that does not actually involve buying anything, including the very shares or commodities being used for the trade.

However, its fans claim otherwise saying it offers investors more flexibility and the ability to make a profit even when the market falls. If you were an expert in a particular market and really believed shares would fall over the next twelve months, how would you feel if all you could do were remove your investment and wait? Yet using spread betting you can profit from your belief – if you are right of course.