The idea of spread betting is pretty simple. Here, the selling and buying price are called the bid and the offer price. If you feel that a particular market is likely to rise, then you buy at the given offer price. Again, if you feel that the market is likely to fall, then you simply sell at the bidding price. As you spread the bet, you are actually placing a bet with the relevant bidding company. This is the company that will predict where exactly a share or index has the potential to stand in the long run. Right after you decide whether the share or the index is likely to be high or low, you place the bet immediately.
To keep things even simpler, in spread betting you can never really own the specific index or share. All you can do is benefit from the way it moves. If haven’t tried spread betting prior to this, visit any betting platform, click the tab for trading and then consequently click the option for opening a demo account. As soon as you do this, you will get a hefty sum of $100,000 virtual money for placing a bet with. This could be your practice session before you actually try the real betting game. Additionally, before placing your bet with real money, you can also check out these seven mind numbing facts about speed betting that’ll truly change your perspective about this venture.
It is risky but free from taxes
Well, we are not just saying this to intimidate you, but spread betting can indeed be pretty risky. Although it can lead to some big-time profits unlike the conventional fixed odds betting, if not played with right strategies, the bets can also lead you to lose a lot more than the initial capital you had invested. However, despite this glitch one benefit of speed betting would be the fact that it is tax free. You can save up to 40% of your profits from this bets even while paying taxes.
It isn’t really complex
The basic idea of spread betting isn’t really complex. You simply have to place a bet on a market (this can be either the stock market commodity or the share) in either an increasing or decreasing value. Every such point where the market moves in your favour, leads you to win your stake.
You can hedge other investments with spread betting
If you are really affected by the fluctuating prices of the pound or oil, you can actually use this betting method for offsetting the prospective losses that can be caused by both the given trends. For instance, if you spread bet on the Euro, you end up gaining profits as the value of Euro rises. Likewise, if you spread bet for higher prices of oil, you may end up making a couple of extra pounds for offsetting the increasing price of operating your car.
It is often called a chart
With the rise of spread betting, various international financial markets have been democratized. Most of these betting enthusiasts go for the stand alone market analysis and the various tools for charting. This further means that you can technically be way more rational while making investment decisions.
An excellent way to profit during the times of recession
According to a report, the volumes of spread betting had double in 2011 compared to that in 2007 where a regular decline was observed in conventional share trading. The fact that you can place a bet on a market that is losing its value further strengthens the idea that you can make hefty profits i the falling markets by using this betting method.
You can invest in multiple markets from the same platform
In the initial and conventional betting game, you had huge amounts of money to be invested in the stock market or a particular commodity. However, in trade betting, you can end up accessing and trading on the values of multiple markets from a single digital spread betting platform.
You can actually limit your risks with spread betting
The spread betting providers are now allowing the betting enthusiasts to place their preferred stop orders on the various trades. This further means that you can now control your risks in the fluctuating markets as you set a particular price on the trade that will be automatically closed if the markets don’t move in your favour.
Well, these were some really insightful snippets of wisdom about spread betting. Check out CMC Markets for a deeper insight on the topic.