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Here's how it works: a betting firm offers a spread--the range from the buy quote to the sell quote offered by the bookmaker--on, say, what the level of London's Financial Times Stock Exchange 100 Share Index will be three months hence. Let's say the spread is 6,700 to 6,710. You think it will be a bearish market, so you sell at 6,700, at $15 an index point (the bet amount can, of course, vary). The market does indeed drop 150 points, to 6,550, and you collect $2,250 in the example. But if the market goes up, your losses could be just as dramatic. Losses, however, can be kept to an agreed-on-in-advance limit, and whether you're winning or losing, you can close your position at any time.

Spread betting is a method of investing in the uk. At the moment its profits are tax free because it is considered betting like poker wins. However the price of the spread betting providers closely mirror what is out there in the real world and spreads are similar. It is a great way to trade and it comes into its own if you are profitable. Even if you make billions you can decide to count it in front of the inland revenue office!

If you want to learn more about the workings of spread betting, I would suggest you to visit this site: http:/www.financial-spread-betting.com

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14y ago
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12y ago

The best way would be to watch where you are placing you money and divide it up according to your research. Never place all your money on one factor.

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How risky is financial spread betting?

Spread betting betting has varied amounts of risk depending on what market you are betting on. Some markets are exceptionally volatile, for example gold and the USD/JPY currency pairing can move much more intraday than the Nasdaq 100 Index. You can also limit your risk by setting a stop loss so you can only lose a certain amount (although the market can "gap" against you) or a guaranteed stop loss (which won't gap but will cost you a premium via a wider spread). Both of these leave your profits potentially "unlimited", although you can set a limit order to close your position when you have made a certain amount of profit. It is called "risky" as your losses are potentially unlimited if you do not use the tools outlined above. All you need to do is know your risk, set your stops at a level you are happy with and do your research! It should be noted that the "win rate" on spread betting is the same as actually trading the financial markets in a study carried out by the Cass Business School. Read more in the related link.


Why interest rate spread is leading indicator?

To understand why the interest rate spread is a leading indicator, one must interpret the interest rate as the price of money. A high interest rate means that obtaining money is costly. If interest rate spreads are great, this means investors are anticipating an increase in the price of money. The price of money will increase due to an increase in the quantity of money demanded (and an increase in demand). Investors see the economy recovering, and in the process of this recovery, they see an increase in demand for money (loans etc.) to buy new capital and purchase other nondurables. Therefore the price of money increases and thus the spread increases.


What is the increased spread of international ties and spread of Western capitalism worldwide is?

Globalization


How does lowering the Discount Rate stimulate the economy?

At a very basic level, lowering the Discount Rate allows banks to effectively increase their spread from given levels. Assuming the bank does not change anything, there is a brief opportunity for the bank to earn outsized profits equal to the increase in spread over their fixed loan assets. Because banking is a competitive sport (and some believe that the industry is commoditized), banks will incorporate allowances for additional risk into their underwriting criteria as they know that they are already being compensated through an increased spread. Allowing for additional risk allows some companies that were turned down for credit when seeking capital for expansion to qualify. Those qualifications allow the company to get the loan and buy new equipment or hire additional personnel. Accordingly, the additional capital flow from corporations to corporations or corporations to individuals stimulates the economy.


What happens when cultures spread?

When cultures spread new categorized in land happen or community for all mixed peoples.

Related questions

How does one purchase spread betting shares rather than normal shares?

In spread betting, you are gambling on the direction or future movement of shares rather than a fixed odds bet. You can bet either above or below the spread, depending on what you think the outcome will be.


Which spread betting broker is best?

As for comparing the spread betting companies it really depends on what you want to trade and over what time period. For instance IG Index are known to have the widest choice and are good for shares etc but Capital Spreads possibly has the tightest spreads, good for short term trading etc .


What is a spread betting forum?

A spread betting forum is a betting forum where you spread your bets around. If you diversify your bets you have a better chance of winning and making money.


Where can one learn how to spread bet?

Talk to a bookmaker who will explain spread betting. Alternatively, visit betting webpages such as Paddy Power and Bet365 where they have a section discussing what spread betting is, and how to do it.


What is online spread betting?

Spread betting is a type of gambling where the winner and the winning pay-off is based on how accurate the wager is. Thus, the money gained or lost is not fixed. A spread betting account is used for financial spread betting, which is spread betting on a company's stocks.


What is the online site Spread Betting FTSE used for?

Spread Betting FTSE is a site dedicated to all financial spread betting. In addition to general advice about the options and risks associated with spread betting, the site provides a forum for registered members to share tips, hints and seek advice.


What companies offer spread betting in the UK?

UK Spread Betting is a web directory containing the names and address of betting companies that provide spread betting in the UK. Companies include: Barclays Stockbrokers Financial Spread Training in London and BetOn Markets.


How many people are involved in Spread Betting in the UK?

"There are over 500,000 spread betting accounts in the UK at this time. Spread Betting is a leveraged tool that gives investors the opportunity to trade the financial markets without ever taking physical ownership of the underlying instrument."


Where can one find information on how to become successful at spread betting?

There are many ways you find information on spread betting. You can visit your local library and see if you can find info there. You could also ask someone that is familiar with spread betting. The internet is also a very good tool to find information out on spread betting.


Is spread betting illegal in any states?

Spread betting is illegal in all states in America. There are also some other countries around the world where it is against the law to place spread bets.


Are there benefits to spread betting?

Spread betting would be useful because you don't have to win or lose. It is based on how accurate your bet was. There are very high risks involved with spread betting. You can either lose substantial amounts or gain substantial amounts.


What is spread betting software and where can I find it?

Spread betting software is software where it compares teams with there strong points and weak points against other teams and then makes a point spread for them. You can purchase this software at any electronic store.