For those who like to dabble in stocks and shares but don’t have huge sums that they can afford to invest and possibly lose, financial spread betting is their usual choice. This is a tax free alternative to trading on the stock market, and is basically betting on whether market values will go up or down.
This may sound daunting but if you watch the news and keep up with current affairs, you will be more than qualified to get involved with spread betting. There is the opportunity to spread bet in various worldwide markets, which are more often than not affected by real world events. You can bet on individual shares, stocks, currency and commodities and it’s very easy to get started.
In whichever market you choose to bet on, you will be shown a buy (higher) and sell (lower) price which are either side of its real world level, or underlying market. If you think the market value is going to rise, you place your bet at the buy level, also called ‘going long’. If you think the market value will decrease you bet at the sell level, and ‘go short’.
The difference between these two levels is the spread, the more the market actually moves in the direction you have predicted the more you gain, and obviously vice versa. Betting trends change very quickly, as if a market is doing well and many jump on the bandwagon it can have a diverse effect on that market. A trend is identified by an announcement or news item causing the markets to react.
To give yourself the best chance to make the most gain, watch for these trends and get in there as soon as possible. The earlier you bet on these trends the more you will gain.