A Quick Guide to Spread Betting

If you’ve yet to enjoy to exciting world of spread betting then you are truly missing out. This is a popular market and while there are some big profits to be made, there are potentially big losses too, so it won’t suit everyone but if you are looking to get involved, here is an elementary guide.

History

The concept of spread betting first began to emerge in the 1990’s when it was attached to a wide range of sporting markets. It’s probably fair to say that it suits some sports more than others but for those looking to move away from traditional betting and towards a new and more entertaining idea, this provided an instant fix.

In time, spread betting evolved to take in the financial world and with the huge growth of the internet making all forms of online betting including online betting sites easy, the new market was set to stay.

Fast forward to today and you can place a spread bet on virtually any aspect of the sporting world. Formula One is a popular gambling market and one that is ideal to use as an example of how things work.

Spread Betting ExampleA bookmaker will take a specific driver at the start of the season and predict how many points they will earn in that particular campaign. The spread will be between two parameters of say 100 to 120 points and if you believe the driver will exceed that amount, you place a ‘buy’ or an ‘up’ bet and if you think he will drop below 100 points, your gamble is known as a ‘sell’ or ‘down’ bet.

Turning to the financial markets and this same principle can be applied to areas such as the FTSE 100 Share Index, Currency and Commodity Trading and the Energy price market. Once again, your provider sets two parameters and you have to predict whether your market will drop below the range or exceed it.

F1 is just an example but the spread can be applied anywhere there is sport. Football, cricket, and golf are good examples while sports that are hugely points driven such as basketball are a perfect fit.

Why so Popular?

As an entity, spread betting is popular for many reasons: For one thing, there are huge levels of excitement involved and with big money at stake, this isn’t for the faint hearted. However, there are more practical reasons why this has grown so much over the years.

The results involved here are virtually instant and that is a distinct advantage, particularly in the financial world where you may be sitting on stocks and shares for a significant period of time while enduring all the traditional ups and downs of the market.

In addition, any profits made are yours and they are not subject to capital gains tax or income tax. Overall, there are clear benefits with this form of trading.

The important thing to remember however is to do your research and to teach yourself to become an expert in the financial markets. As with all forms of gambling, there is no such thing as a sure fire wager when it comes to spread betting but you can help to minimize any risk by arming yourself with all the information you need before staking any money.

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