Spread betting on shares differs from share trading in several ways, but has just as big a potential for profits, as well as losses. A share is a portion of a company’s equity and as a shareholder you are entitled to a share of the company’s distributable profits, or dividends, as well as a share of the company’s assets.
Unlike share trading, when you spread bet on shares, no shares are actually bought or sold, you are simply betting on the price movement of those stocks and shares. While this means that you don’t benefit from the perks of share ownership, such as having a say in how a company is run, or being paid regular dividends from that company, it does mean that you also avoid all of the downsides of share ownership – the taxes, having to find a trustworthy broker, paying brokers’ fees and paying capital gain tax.
The price of shares are valued according to a range of criteria across the different markets, but as a general rule, the value given of a share should be a realistic estimate of the offer price you would receive for it should you wish to sell it. In fact, when it comes to share trading, the only way to find out a share’s true value at any given time is to sell it.
When spread betting shares, you want to know that the spread on shares is as accurate as possible. At Tradefair Spreads, we set our share prices according to their underlying market values, so throughout the day, as shares’ underlying values fluctuate, our bid and offer prices fluctuate to the same extent, fairly, and in proportion to the actual market. When you spread bet on shares with Tradefair Spreads, we make sure that your experience is as close to real share trading as possible, although you are not buying or selling actual shares yourself.