It has been reported this morning that leveraged trading accounted for half of all equities traded in the UK last year.
There can be no doubt that leveraged trading continues to grow in popularity – news this morning is that leveraged trading accounted for half of all equities traded in the UK last year.
What we are talking about here is Contracts For Difference (CFD), as opposed to spread betting. CFDs trading gained in popularity as investors sought to evade stamp duty and capital gains tax.
The data compiled by US research house Tabb Group did not look into the spread betting industry but analysts suggest that the similar tax benefits of spread betting will also be a key driver in this growing market.
Tabb Group say a total of €13tr worth of shares were traded through CFDs.
CFDs are a form of equity derivative that allows investors to speculated on share price movements without actually having to take ownership of the underlying shares.
It would be interesting to see the latest figures on spread betting in light of the popularity being enjoyed by CFDs.