Investors are often ready to take more risks to make more money in the financial markets. The ordinary way of trading in shares is seen to be less cost efficient and less flexible than Financial Spread Betting, which is seen to be the fastest growing way of speculation on the movement of the share or index. Since there is no actual physical purchase or sale involved the betting on the instruments is wide including stock market indices of NASDAQ, Bonds, and Interest Rates or even includes materials like oil or metals.
Investors are often ready to take more risks to make more money in the financial markets. The ordinary way of trading in shares is seen to be less cost efficient and less flexible than Financial Spread Betting, which is seen to be the fastest growing way of speculation on the movement of the share or index. Since there is no actual physical purchase or sale involved the betting on the instruments is wide including stock market indices of NASDAQ, Bonds, and Interest Rates or even includes materials like oil or metals.
How it Works
A bet is placed on the future movement of item for instance the share of a company. In case the investor feels the price will rise, he will place a bet to sell or if he feels the value is going to fall, a bet will be placed to sell. The speculator will have to approach a spread betting company which will give him two prices, one being the ‘Bid’ at which the security can be sold, the other price being the “Offer’ , that is the price at which it can be bought. The difference between the bid and offer price is known as the spread. Bets are closed by doing the reverse of the first act of either buying or selling at the same rates. The movement of prices of the share etc being traded is known as points. Profit or loss depends upon the difference between the betting point and the point aruling at time the speculator intends to close the bet. The rate of betting on per point increase or decrease gives the profit or loss made in that transaction.
The Guide
Bull Bearings Company’s spread betting guide is easy to understand and it gives a new aspirant a chance to know the technical terms & to understand their meanings with many examples. There are some specific technical terms which a speculator should know well for instance Cost and Margin Requirements, Margin Call, Stop and Limit Orders and Limit Order. These terms can be best understood by going over the various sites. The taxation aspects also need to be understood well.
Pros & Cons
Spread betting are high risk level wagers which have the potential of the gains or losses being far in excess of the original betting. The Financial Conducting Authority of The United Kingdom regulates this category of speculation and not by the Gambling Commission as may be expected by the general public.
Financial Spread Betting 