Financial spread betting was once regarded as strictly something for City types, who fancied taking the same risks with their chunky bonuses that they took in their day jobs. However, spread betting is now increasingly being used by normal people who want to take on highly speculative market views with a small part of their portfolio.

The UK financial spread betting industry is one happy story of innovation and successful entrepreneurship , of a young(ish) industry built by smart people, making money and creating jobs out of an interesting idea. The City at its best. Well, at least officially

So what can you bet on?

The range of markets you can trade via spread bets is vast – you could for instance deal in shares, oil, gold, politics and sport… Financial spread betting is the biggest part of the market in the United Kingdom. Investors can for instance spreadbet on individual stocks, indices, commodities, forex pairs and interest rates.

Why spread bet?

While the losses can exceed the initial stake, so too can the gains, and profits aren’t taxable. You can bet on a huge range of markets from one account and with spread betting you can also profit when prices are falling.

How?

Let’s consider the FTSE 100 market. If you believe the Footsie will rise, you “buy” at say £1 a point. If you believe it will fall, you “sell”. If you sell at £1 a point and the Footsie drops 50 points, you make £50. But if it rises 50 points, you stand to lose £50.

Isn’t that a bit risky?

Well, yes it is risky. Let’s assume you place a £10 a point bet on the FTSE 100 index. A 100-point rise on the FTSE 100 will stand to make you £1000 (assuming a £10 per point stake), but a 100-point drop will lose you £1000. Although there are ways of mitigating the risk by using smaller stake sizes and utilising stop loss orders to limit the amount you can lose on any bet. It is also good practice to work out a worst-case situation. Let’s assume a share trading at 150p. If the stock is wiped out, the most stand to possibly lose is 150 multiplied by the size of the stake.

The new opportunities for former Forex markets users and online betting customers to come and bet on some Financial spreads, is a big change for them. Starting the financial spread betting with the knowledge from the old used programs is the big advantage for these betters, upon the new financial spread betting UK users.

Financial Spread Betting UK

The markets for the financial spread betting are various and you can bet on each of them without actually having any stocks or holdings. The idea in the financial spread betting is that you place the bet on the spread between the market value at the moment of the bet placing and the value of it in the future as for your prediction.

It’s true for the stocks market, the UK FTSE100, Oil, other commodities and any market you can think of. The betting’s goes for the spreads only and the benefit can be in one of two ways:

1.    You can earn in the financial spread betting UK is the market up. Well, it makes sense, you place a bet on one market and its value is raising, you make the benefit from the market values jump and enjoy the earnings.

2.    You earn even if the financial spread market is falling in value, only if you have placed a negative bet, predicting this market to lose value. It’s the first system to allow you make money from losing markets.

Out of these two options you are able to make revenue on the financial spread betting markets, from the UK and around the world.

Any account you are about to open, the best thing to remember is to start small and to grow with the financial spread betting company and the additional opportunities. The risk management is very important to save you from falling with the market; you must evaluate and know the best you are placing.