Spread Betting is a tool that provides you with the opportunity to speculate on the possible movement of any given asset. This means you can speculate on the movement of company stock, a specific currency or even a diversified index without the need of having to buy any of these assets.
Spread Betting is a vehicle used to predict the growth of assets and the level of how wrong or right you are would then affect the profit you make or the loss you suffer on the bet you have placed.
When looking at financial Spread Betting, you would typically speculate about the direction you think the financial instrument would move in. Should your prediction be correct and the instrument moves in the direction you have predicted, your profit will grow accordingly.
You have to keep in mind that the opposite is also true for Spread Betting. Should the financial instrument move in the opposite direction than what you predicted, your loss will then increase. The term used when predicting that the asset will grow positively is called “going long”, should you predict that the asset will show negative growth you would then call it “going short”.
Why do People Make Spread Bet?
This type of betting is considered to be tax free in some countries and this incentivises people to take the risk. You do however have to check whether Spread Betting is tax free in your country. Spread Betting is considered to be a leveraged financial vehicle, meaning you don’t have to put in the full deposit to trade. Leveraged betting makes your capital investment go much further, but the risk is that when this vehicle moves against you; your losses also grow and are not limited to your initial deposit.
Spread Betting is such a popular market that it is referred to the market that never sleeps. This market trades 24/7. This allows you to enter or exit the market any given time of the day even if the actual underlying market sleeps.
People take very well to Spread Betting because it is so quick and easy to open a spread. It is as easy as selecting your target market, establishing your bet and confirming your prediction of what the market will do. Thereafter you just confirm the deal and you are instantaneously part of the Spread Betting market.
Spread Betting Tips
When you try out something new it is always advised to familiarise yourself with the concept and how it works. Read up on Spread Betting, talk to people that have engaged in Spread Betting and understand the basics before you jump in and start.
You can also open up an online demo Spread Betting account where you can have a go at it without have to risk losing any money. This will help you get the feel of it before you put actual money on the line. Many platforms also offer user manuals for this type of wagering you can download and read through to get a better idea of how this punting market works.