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This month’s ‘Meet the Players’ article features a spread betting company; Spreadex. Unlike many spread betting companies,

Spreadex actually does offer bets on smaller companies.

Trading AIM with Spreadex

With the phenomenal growth that spread betting has seen over the last decade you can now trade on the Australian stock market, exotic currencies, house prices and even frozen concentrated orange juice futures! Hearing this you would imagine that it would be easier than ever to spread bet on AIM shares via the dozen or so spread betting companies. Unfortunately AIM investors have rather been left behind in the spread betting companies’ stampede to provide newer and stranger markets. The vast majority of firms prefer not to offer small caps at all; or if they do they only provide their customers access to shares above a certain market capitalisation while asking for exorbitant initial margin payments.

At Spreadex we are committed to providing a comprehensive AIM trading service to all our clients. We will quote shares with market caps as low as £1 million and if there’s a share we don’t yet quote or a new issue just come to the market then we’ll gladly quote them for you too. Some other spread betting companies charge initial margins in excess of 50% of market value, with the worst culprits as high as 90%. Spreadex only ever charge a maximum of 40% of market value.

Spreadex have been trading for over ten years so our friendly staff have the necessary experience to help get you the best price possible on each and every trade. We also pride ourselves on the personal touch, so you’ll be assigned an account manager to execute your business and keep you up to date with what is going on in the markets.

But why would you want to spread bet on AIM stocks instead of trading them in a more traditional fashion? Well, first and foremost there is no capital gains tax* to pay on your profits. As spread betting is a leveraged product you don’t need to deposit the full value of each trade. If a traditional share purchase tied up £1000 then a typical spread bet on the same stock with Spreadex would only use £400 of your hard earned cash, as initial margin. The remaining money can stay in the bank, pay for a short break or go towards your next trade. Even better, if you have a credit limit then you may not have to deposit any money at all as initial margin. However as a leveraged product, it may require additional sums by way of variable margin payment in the event the market goes against you. 

maximum of 40%

of market value

no capital gains tax

Example

How does it all work? A quick example is probably the best way to illustrate this.

Thinking that the diplomatic situation with the Argentinean government will soon improve, you call up one of the helpful traders at Spreadex to ask for a quote on Falkland Oil & Gas for the June 15th expiry. The price is 148.8 – 151.4, so if you buy £100 per point at 151.4 you will make £100 for each penny the share rises above 151.4. This is the equivalent of buying 10,000 shares which would have cost you £15,000 with your traditional stockbroker, and that’s before stamp duty, dealing costs and still with the dreaded prospect of capital gains tax to pay. Spreadex would only require £6000 in initial margin, which can be made up from a combination of cash and credit limit, however, additional variable margin payments would be required in the event that the price falls below 151.4.

We realise that it might all seem a bit alien at first, so to make it even easier for you, Spreadex guarantee a £200 refund on any net losses for new clients. The offer applies to trades made in the first fourteen days of opening the account**. This enables new clients to trade with a £200 safety net in place. Even if you do currently trade with another spread betting company its worth remembering this offer is open to all new customers.

If you want to gamble on binary bets or you prefer picking pork bellies to stocks then Spreadex may not be for you. But if it’s a fast, friendly, professional service you’re after then come and trade with Spreadex, a company that understands AIM and that wants your business.

*Tax treatment may be subject to change in the future.

**Terms and conditions apply. Please see www.spreadex.com for full details.

Spreadex Ltd is authorised and regulated by the Financial Services Authority.

Spread Betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone so please ensure you fully understand the risks involved.

Spreadex guarantee

a £200 refund

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The views expressed in this article by Spreadex Ltd are its own and do not necessarily represent the views of Aimzine Ltd.