Spread Betting on the Price of Oil

LONDON, September 7, 2011 -

As the world’s most-traded non-financial commodity, the price of oil can be volatile. The value of each of the 86 million barrels produced every day can rise or fall massively in 24 hours, meaning for a trader both the profit potential and level of risk are high. City Index (www.cityindex.co.uk/) looks at what makes financial spread betting an effective way to speculate on the price of oil.

Short Selling

Spread betting allows traders to profit from a falling market as well as a rising one. And with a market as volatile as oil, the ability to short sell can be crucial, as it provides a trader with more options when reacting to sudden price movements.

Monetisation

In spread betting, positions are monetised in the trader’s base currency rather than the underlying market currency - typically US dollars for oil - so in the UK your exposure will only ever be in sterling. This makes planning your entry and exit points much simpler than if you have to factor foreign currencies and exchange rates into the same equation.

Tax Free Profits*

Commodities such as gold, corn and oil may incur a wider ’spread’ (the difference between a buy and sell price for a market) than indices such as the FTSE 100, but this is a small cost and in balance spread bettors do not have to pay a penny of capital gains tax or stamp duty on their profits*.

Risk Management Tools

City Index offers stop loss orders and limit orders to ensure that you can manage your trading closely and never lose more than you are willing to if the markets should go against you.

Learn more about spread betting at www.cityindex.co.uk/spread-betting/

Alternatively, try spread betting with a virtual cash balance right now through a free City Index demo account. Go to www.cityindex.co.uk/learn-to-trade/ for details.

Spread betting and CFD trading leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

*Spread betting and CFD trading are exempt from UK stamp duty. Spread betting is also exempt from UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for difference (CFDs) and, in the UK, spread betting.

We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. For more information visit www.cityindex.co.uk/spread-betting/.

Contact: Joshua Raymond, City Index Group, Tel: +44(0)20-7107-7002, Email: joshua.raymond[at]cityindex.co.uk