Financial Spread Betting is a way of dealing in the price movements of instruments such as shares, indices, sectors, currencies and commodities, without actually owning the underlying asset. Like share dealing, the aim for investors is to profit from the price moving in their favour.However, Spread Betting gives you the potential to profit in any market condition - provided you trade the right way of course - and to deal in a very wide range of investments, at the click of a button.Spread Betting typically requires the deposit of a small percentage of the total trade value upfront, and therefore profits and losses can quickly exceed the initial deposit, requiring you to make further payments. Ensure you understand the risks, and do not risk more than you can afford to lose. These products are not suitable for everyone; if you are in doubt please seek independent financial advice by going to Unbiased.co.uk. This website does not constitute investment advice. There are trading demos and detailed information on many firms websites including www.hlmarkets.co.uk.Disclaimer:The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances. To find and IFA please go to http://www.unbiased.co.uk
Once you decide to place your initial bet, you will have to decide whether to go ��long�� or ��short��. Going long means betting that the price will go up, while going short means you think it will fall. This shows one of the main advantages of spreadbetting �C it��s easy for ordinary investors to profit from both rising and falling markets.When you decide to bet, you will be doing it on a specific instrument, such as a stock or an index like the FTSE 100. Let��s take retailer Marks Spencer as an example. You think its share price will go up, so you want to go long on the stock. You do this by betting a certain amount of money per ��point�� that it will rise in value. The size of a point varies depending on the asset. With a share it might be equivalent to a penny of the share price. So if you go long on M S at ��10 a point, for every 1p that M S rises you will earn ��10.Conversely, for every 1p it drops, you��ll lose ��10. When you place your bet, your provider will quote two prices �C the ��bid�� and the ��offer�� (or ask) price. The difference between them is the ��spread��. Thanks to tough competition in the spreadbetting industry, today these are fairly ��tight�� (meaning the difference between them is small). So M S may trade on a spread of 300.5p-301.5p, which is not much wider than the bid/offer spread on the shares themselves. If you place a long bet, it will be at the offer price of 301.5p, while a short bet will be at the bid price of 300.5p. When you come to close your bet �C which you can do at any time �C it will be at the other price. So if M S rises from 300.5p-301.5p to 310.5p-311.5p, you will open your long at 301.5p and close it at 310.5p, for a total gain of 9p �C even though the underlying share has risen 10p. The difference between the two prices is where the spreadbetting firm makes its profit.
Well you need to be more specific, but spread betting involves not putting all your eggs in one basket . For example, if you go to a horse race, betting on 10 different horses rather than putting all your money on one would be spread betting. In the context of business, don t put all your money into one idea e.g. if you have a shop, sell various different things.
Just open up an account, put some funds in and start betting. Find out about stop losses (you need to pay extra for guaranteed stop losses). Start off very small until you know everything you need to know. It is a geared product so make sure you understand this.
