No matter how successful an investment fund is, even the ones run by the most successful traders, it's very difficult to make a massive return out of a small amount of capital. The stock markets have outperformed the interest rate over just about any period in the last sixty years, but all the same, a good return on a small sum means an unspectacular profit.

This is why leveraged trading has become so popular in recent years. The word 'leverage' doesn't always carry the best connotations, after all, it was the so-called 'leveraging' of debt by various high profile financial institutions which made the credit crunch all that much more painful, but leveraging is simply the process of making a certain amount perform like a large amount.

Right at the top of the list of leveraged trading opportunities is spread betting. Spread betting has enjoyed a phenomenal growth in recent years and now online spread betting is becoming increasingly popular through companies such as CMC Markets.

So why is spread betting so popular? In simple terms it's because it allows people who want to trade on the financial markets to do so. With just a couple of hundred pounds you can trade in a meaningful way, seeing a much greater impact on your capital than you would if you'd bought a hundred shares with the same amount of money. Of course, the risks are so much greater, if things go wrong you could easily find the amount of money you have disappear in just a few hours, so it's important to take great care.

Another great advantage of spread betting is that it is not liable for capital gains tax, unlike physical shares, and the only transaction costs that you have to pay is the margin, it's not like you have to pay a fund manager because you are in control and you are that fund manager.

Of course, it's not all straightforward, you do have to be careful and it's vital that you know what you're doing before you start spending money (it's equally vital that you never forget that you can lose a huge amount of money in just a few moments), but if you learn your art carefully and get it right, you can see much greater returns spread betting than in just about any other market activity.