Compare Online Trading
Are you interested in Online trading? Online trading is fast gaining popularity as a means to invest in the stock market – but it is not without risks. Online trading offers you the ability to trade shares yourself without relying on a broker.
Financial investment is a risky affair and requires careful research and cautious deliberation on the part of the investor. To take the effort out of finding a good online trading account, TheRateTart offers you an independent comparison of the various online trading account available through free best buy tables. This useful site also has free, independent guides explaining Share Dealing, Contracts for Difference and Online Financial Spread Betting.
Stocks represent ownership of a company while shares are stocks of one individual company. Investing in shares and share trading are popular investment options due to the high returns they can offer. As this is a risky affair it is imperative that you thoroughly research the background of a company before investing your money.
Spread Betting or Contracts for Difference (CFDs) are a more advanced form of Online Trading in which investors earn profit on the changing prices of stocks and shares.
For example, imagine that TheRateTart was listed on the stock exchange (which it isn't) and that you believed the company was seriously undervalued (which it is), but that the price would rise significantly in the near future (let's hope so). The stock is currently trading at 200p and your favourite spread betting company is offering a spread of 195p-205p on the stock. You decide to bet £10 per point on that the price will rise. This means that for every penny over 205p you will make a profit of £10.
If two months later TheRateTart shares were trading at 225p you would have made a profit of 20 points or £200 at £10 per point. You can then close your bet and pay a financing charge to the spread betting company. The outstanding profit is your net gain on the bet.
If on the other hand the market decided TheRateTart was overvalued (admittedly, unlikely) and two months later shares were trading at 160p, you would have made a loss of 25 points or £250 at £10 per point. You would also have to add the financing charge to your losses. Your overall loss would be limited by the share price hitting 0p. But assuming you do not want to be exposed to £1950 of risk plus charges, you would be better off putting a stop loss order in place to ensure there is a limit to your exposure.
A key difference between Spread Betting and Contracts for Difference is how profits are taxed on each. On both types no stamp duty is paid. This differs from share purchases where stamp duty is payable on each transaction at 0.5% of the value. For spread bets (but not contracts for difference) capital gains tax is not payable on any profits. Of course, this also means that losses cannot be offset against profits from other investments.
TheRateTart is a comparison site that compares different players in the market offering CFD and Financial Spread Betting accounts. Its free independent comparison tables help you to make an informed choice on the best online trading account for your needs. You will also find independent, impartial comparison tables for other products: Loans, Savings, Mortgages, Current Accounts, Insurance and Utilities.
Visit www.TheRateTart.com and find the right Online Trading account for you.
