With the world economy in recovery mode, many people are still questioning how the markets got so out of control. They are also questioning something a little closer to home; their own finances.

Tax efficiency, opportunities in fluctuating markets, diversifying existing investment portfolios and planning investments for the future are all priorities. Everyone should understand the necessity of planning ahead.

Many are turning away from pure funds and pensions and considering newer forms of trading that provide new opportunities. Spread trading, offers some interesting features and is worth considering as part of your investment strategy.

When speculating though you must always remind yourself that the markets can go down as well as up. With spread betting you can lose more than your original stake or investment.

So Why Financial Spread Trading?

A lot of inconvenience can be prevented by spread betting. This is especially true when it comes to access to World markets and the simplification of tax issues.

There are some useful benefits.

Advantage 1) As spread betting does not involve the transfer of ownership rights and it is simply a bet, it is not liable for stamp duty, income tax or capital gains tax*.

Advantage 2) A key advantage is that spread betting offers a wide variety of financial markets on which you can speculate including commodities, indices, currency and equities markets.

Advantage 3) I like that you can close a profitable trade and bank a profit but also that you can close a losing trade and limit your losses. Being able to part-close a bet also offers an interesting angle, i.e. closing part of your spread bet but keeping the rest of it open. This can be used to help manage your risk.

Advantage 4) Naturally, you can spread bet on markets to go up but you can also spread bet on them to go down.

Advantage 5) The fact that some markets can be traded 24 hours a day sets spread betting apart from more traditional stock trading. Another advantage is that there are a wide variety of ways in which to make trades; spread bets can be made online, over the phone, or even on some new mobile applications.

The Financial Services Authority regulates the UK based companies. This tends to ensure a certain level of service and, more importantly, consumer protection. With regulated online spread betting companies like Financial Spreads you can trade some markets 24 hours a day, including key Currency and Stock Market Index markets. In addition, you can also trade more traditional markets such as Gold, US and UK shares and so on.

So whilst there are many plus points, you also need to remember the potential downside.

Spread bets do carry a high level of risk. Before trading, ensure that spread betting matches your investment objectives. Familiarize yourself with the risks involved. Seek independent advice if necessary.

* According to UK tax law. Tax law can be changed or may differ depending on your personal circumstances.