Financial spread betting is a tax-free and particularly efficient way of trading the price movements of world markets across the globe. Spread betting is a derivative product that allows private traders to speculate on the price movements of thousands of financial markets including indices, shares, forex pairs, commodities and more.

Derivatives have registered a dramatic increase in popularity over the last decade. This is because while they tend to be more risky than trading shares the conventional way, they offer greater potential returns and allow traders to make sizable returns from relatively small investments. In a nutshell, derivatives permit you to speculate on how you believe the price of an underlying financial asset will change, without having to put down large amounts of capital in the transaction.

• You can trade spreadbets as easily as you trade shares, as the price of a spreadbet follows the price of the underlying share.
• Spreadbets are much simpler and easier to understand and trade compared to other derivatives such as options and warrants.
• Consider spreadbets as a short-term tool to diversify your existing investment portfolio.

Spread betting іѕ a particularly useful way to invest in an underlying asset since you stand to benefit from price rises without having to take ownership of the underlying asset. This makes it a good tool to speculate on a future or a commodity such as gold or oil since you probably don’t want to take ownership of bullion or a shipment of crude oil! Moreover, the fact that you don’t ever need to take physical ownership of any of the assets you bet on means that you need only deposit a portion of the total market exposure.

Spread bets can be used to speculate on price movements irrespective of whether the markets are rising or falling. This means that spread bettors are able to go long (buy) or short (sell) on market prices, meaning that they could well profit even when a company or market is falling in value. With spread betting for every point (for every penny in the case of individual shares) that you are right or wrong in your prediction you win (or lose) a multiple of your stake. For instance, if you reckoned that the FTSE 100 index was set in for a rally, you could either place a rolling bet on the daily movement of the index or take a longer-term view by betting on its likely level in a few weeks or even months.

Generally your minimum stake will be £1 per point. This is equivalent to owning 100 shares. £10 per point = 1000 shares. £100 per point = 10,000 shares etc.

One reader interestingly asked me: As I understand it you bet on a rise or fall of points and each point is 1p but what about shares who’s price is say 1.025? Are you then betting on hundredths or thousandths of a penny? How do you know what value you’re actually betting at? If I bet £2 on this type of share to raise 1 point is that to raise to 2.025 (i.e. double) or to raise to 1.026 – just a thousandth? Thanks – Ben

Ben, you can’t spread bet every single share listed in London, most piddly penny shares won’t be available to spread bet on! Hence in your example, £2 per point on a penny share would give you exposure to 200 shares @ 1.025 = £2.05. Every hundredth of a point rise = 2p! Not really worthwhile unless it’s for training purposes and the SB companies do offer reduced stakes to new account holders.

One of the key advantages of financial spread betting is the ability for traders and investors to trade on margin; which is particularly useful for investors who only have a limited amount of capital. Margin trading in practice means that by trading an underlying asset such as ‘shares’ you the potential of greater returns and, of course, greater losses, than if you were to instead buy shares.

Spread betting providers allow you to place a spreadbet with an initial deposit that is referred to as the initial margin. The exact size of this margin depends on the type of financial instrument and volatility of the asset you have chosen to spreadbet on, but it normally amounts to about 10% to 30% for most instruments.

Try playing with one of the spread betting providers’ free accounts, not super accurate but will give you an insight without having to put any money down, or borrow any shares. Just keep in mind that as opposed to fixed-odds betting, spread-betting losses may be rapid and potentially unlimited making it higher-risk business!

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Financial Spread Betting is the most efficient leverage tool for traders, in the financial markets. Traders have the opportunity to trade with no real ownership in the market. Explore the Financial Spread Betting markets and learn how to trade successfully.

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As current or future investors you are well aware of the fact that in order to trade in the financial market you need to own or be a part of it as far as investment of money goes. With Financial Spread Betting the story is different.

Financial spread betting explained. This is your chance to get involved in the stock market or in any other financial market with a value such as gas, oil gold and so on, without actually being invested. This is not only convenient financially but also requires less effort as far as bureaucracy goes.

So what is Financial Spread Betting anyway?

Financial Spread betting enables the trader to lay an over / under bet with the ability to minimize the risks and optimize the profits by ending the bet as soon as it goes the other way around from the bet (stop loss) or getting out while you are ahead.

Financial Spread Betting is available for various products including shares, currency exchange, commodities and just about anything with a value.

The spread is the difference between the bid and the offer price for example taking the apple stock and placing a bet that it will rise (go long) and it indeed rise, then you will get your bet times the number of points it went up.

Financial spread betting is gaining popularity in Europe and mainly in the UK. Even though it existed for years, it is now becoming available online and much like other new trends online, many companies are seeking the opportunity of catching customers by offering lucrative incentive offers such as welcome bonus.

Regardless of the fact that Financial Spread Betting is indeed a form of gambling, it is tax free which makes it even more attractive than forex trading. This basically means that unlike the money you make by investments made on the actual offline financial market, on the Spread Betting profits you will pay 0 tax.

The fact that an investor can control his losses and by that control the risk involved in the bet makes spread betting safe and even though gambling is considered addictive, financial spread betting has many barriers which can limit the risk of big financial loss.

Another reason to the gaining popularity of  spread betting is the fact that you can make money even if the market is falling and we all know now is that time. So even if the stock of the company you desire to invest for is falling, you can still make money out of it – all you need to know is bet that it will happen.

Spread betting is available only during the time of trade so the weekends can be your time to catch up and plan your attack plan on the financial arena. The most interesting sports spread betting is the World Cup 2010 tournament. There are major opportunities for the World Cup betting agencies since this is the greatest soccer event in the world. All Financial Spread Betting agents are looking forward to see the soccer World Cup bets online.

Financial Spread Betting is regulated by the proper authorities so you’ll always have an address in case of a dispute.  Needless to say you should choose a company with a reputation and beware of fraudulent companies.

If you are looking for a reputable and trustworthy place to bet, go to the ones recommended by The Spread Betting Portal.