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FAQ Page 4 - Question 44

Q: I've been holding a long position on the FTSE 100 for over a year, does this seem strange to you because most people seem to be in and out (of the market) all the time.

A: It doesn't seem strange at all to me. Looks like you're part of a growing crowd that's using spread bets for longer term trading.

In fact I've heard of one guy who buys a fixed amount of both the FTSE 100 and the S&P 500 every month. His aim is to invest long term in the market with the potential of tax free profits. He's also utilising his capital wisely because spread bets use margin therefore he doesn't have to put up the full nominal amount that he invests.

If you do use spread bets for longer term investment purposes then make sure you fully investigate the costs involved and how much these will cost you per year. The costs involved are obviously the rollover and how many times one has to do this over a year. In the case of the FTSE 100 then there are 4 main quarterly months so you'd be charged the rollover 4 times which isn't going to be a lot of money.