The markets can seem a confusing and at times intimidating place to the would-be trader. As markets have liberalised and the introduction of more sophisticated technology facilitates easy access to global finance, what are the different financial vehicles available?
Shares: Trading on the markets through buying shares will be the first port-of-call for a large proportion of investors. Whilst this may provide good returns other forms of financial trading may be better suited to you.
Spread Betting: Spread betting allows you to profit, or incur losses, from the movements of the financial markets without having to buy the underlying shares.
In the UK, spread betting is a popular alternative to the traditional markets because it is usually free from UK Capital Gains Tax and UK Stamp Duty. Relative to other forms of trading this can mean substantial savings. However, spread betting is prohibited in many countries such as the United States.
FX: Trading the global currency markets is ideal for day traders, with the liquidity in forex higher than any other market sharp price movements offer the potential for quick gains, and the risk of large losses.
ETFs: An Exchange Traded Fund (ETF) follows the movements of financial instruments and is bought and sold in a similar manner. ETFs are made by a fund dividing its holding of an instrument into shares that are subsequently sold on the market. Buying shares in an ETF gives you many of the same benefits as owning shares in equities.