Financial spread betting has experienced a dramatic rise in popularity in recent years. Indeed, the product, once the preserve of City traders and investment professionals, has become the short term trading instrument of choice for a rising proportion of private investors in the UK. This increase in popularity has been driven by several factors including the move towards more active trading by private investors who have seen their traditional `buy and hold' portfolios decimated by sharp declines in global stock markets; and the substantial increase in advertising expenditure by the major spread betting companies. Perhaps the primary driver of the trend has been greater investor awareness of several attractive features of spread betting, notably freedom from capital gains tax and capacity for levered returns.
