Spread Betting FAQ & Guides
Spread betting is becoming very popular nowadays. Spread betting involves speculating on financial markets (such as the FTSE, DowJones, securities or commodities markets), and it is something you can make a lot of money out of doing.
Because of UK tax laws, spread betting is even more lucrative than ever before, and is why spread betting is growing 30% per annum in the UK. Unlike conventional share trading, spread bettors will not be charged any tax or stamp duty on profits arising from spread betting (as long as you can prove other main sources of income). This allows city traders to use their market knowledge and insight to make far more money in spread betting. This can lead to up to 50% in profits.
Below are some spread betting articles that I have written. I’ll try to update them every month.
Spread Betting Guides
- History of Spread Betting
- Advantages of Spread Betting
- Spread Betting on Fundamentals
- Choosing a Spread Betting Platform
- Spread Betting Technical Analysis
- DowJones & S&P 500
- Spread Betting Tips
- Advanced Spread Betting Tips
- FTSE Spread Betting
- Indices Spread Betting
- Commodities Spread Betting
- FOREX Spread Betting
- Best Markets for Spread Betting
- iPhone Spread Betting Apps
Which Markets Can I Spread Bet Across?
One thing that makes spread betting so great is that most spread betting platforms will offer a range of markets, financial indices and industries to bet on. If you are interested in the major stock markets such as the FTSE then you can bet on the different UK publicly listed businesses. On the other hand, if you are knowledgeable in the commodities markets than you might want to speculate on the prices of coffee, sugar, crude oil or even gold and silver.
Other popular markets to spread bet on include currencies (FOREX – foreign exchange), securities, house prices and interest rates/government bonds.
Using Fundamentals and Technical Charts for Spread Betting
Depending on your strategy, you can make money spread betting off different markets in two unique ways.
Betting on fundamentals involved researching externalities such as the economy and government policies and how they will affect certain markets and share prices. You might even study the weather and become a learned meteorologist to study oil prices in the commodities market. Digital Look contains a lot of free advice and information that I’ve found to be very helpful.
The other type of strategy is reading off technical charts. All spread betting platforms will provide lots of data and candlestick charts for you to analyse and extrapolate share/market trends from. There are also number of economic journals and resources that you can use online.
Risks of Spread Betting
Spread betting platforms and financial brokers all make sure that you are fully aware of the risks of spread betting before you sign up an account.
It is recommended that you have experience and knowledge on the markets you are spread betting on before you risk any money. This is because in spread betting the risks are much higher than ordinary fixed odds betting. You can end up losing far more than your initial deposit on a single wager.
For example, let’s say that you deposited £50 at an online spread betting platform like Capital Spreads, and wagered £30 per point on Microsoft stock moving up starting at a bid price of 255p. Now, if the stock drops 5 points, than you will lose 5×30 = £150. This is £100 more than you deposited and you will need to square this balance with the platform.
Of course, in this example things could have gone the other way and you may have made £150 profit (if the stock rose to 300p), however spread betting is about risking only what you can afford and making sensible bets, managing your bankroll accordingly.