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FAQ Page 4 - Question 37
Q: Can I use spread bets to trade options?
A: Yes you can and obviously profits are tax free as well. But there's also another significant advantage in trading options for speculation purposes, the spread bet market-makers are far more flexible in what they can quote you.
For example if you want to buy a call option on Shell on LIFFE you may find that they only quote a May and a July series, but you would prefer a June - too bad because on LIFFE you can only trade what they offer. But spread betters will happily make you a market in June and will even quote you different strike prices as well.
But understanding options relates somewhat to the iceberg in that there's a lot more information lurking below the surface. By this I mean that it's not hard to read an article in the Investors Chronicle and understand the basics of options, but many people don't realise that you need to know and understand a lot more about these financial tools to make money over time.
If you do want to start trading options then my advice would be to trade in very small amounts in the beginning, ease yourself in so to speak because you'll find options trading very perverse.
This website has a detailed section on options, please click here.
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