The UK had an emergency budget earlier this week and it involved a number of tax rises. This was not surprising given the state the current finances of the UK are in. One of the taxes to go up was the capital gains tax.

This is something that will hit a lot of traders hard. I am fortunate that I do financial spread betting as this means that I don’t have to worry about paying capital gains tax is it is currently exempt in the UK.

As the budget was being announced the markets were in decline. This is bad news for a lot of investors and they tend to have a buy and hold strategy leaving them with a ‘long bias’ in the market. With financial spread betting you could’ve taken advantage of the declines by taking a short position.

In the currency market it was a completely different story. While the stock market was falling the British pound was strengthening. With financial spread betting you can trade in different markets from the same account so you could switch your short position from the stock market to a long position in the pound in seconds.

I don’t think the government will have any money left when I retire. I need to do that myself. People know this but are put off from investing because they don’t enough starting capital. This isn’t a problem with financial spread betting as you don’t pay commissions on your trade so there is no advantage to trading large.

You need to be aware that there are some risks. The way to trade means you buy on a margin which means there is leverage involved. This is beneficial when you win but you can lose everything if you don’t control the risks.

Yesterday was a prime example of how financial spread betting works for me. Think about all the risks and rewards before you decide if it will work for you too.