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So what actually is spread betting? Well, to put it simply, if you went to a stockbroker to start dealing shares in a company, say BT for the sake of argument, you will be quoted two prices. The lower price (£1.00 say) is the bid price, the price you would get should you want to sell the shares. The second price, the higher price (let’s say £1.10), is the price you pay should you want to buy the shares-known as the ‘offer’ price.

There are many different options for those wishing to make money through investment and all investments have an element of risk.

Those who start to discover more about financial spread betting will soon realise that spread betting, or spread trading, is at the higher end of the risk spectrum in that respect. There are high rewards to be had but similarly high losses too, although there are things you can do to minimise the level of risk. It is a certainty that nobody should become involved in short term spread trading unless they are able to follow a few simple and obvious rules.

It is fair to say that most people have not necessarily heard of spread betting and many that have heard of it believe that it is some sort of advanced gambling method, but where did it come from?

Spread betting, or spread trading as those who make their money in this arena prefer to call it, is claimed to have been started not too many decades ago, in just 1975. This idea of ‘spread betting’ was thought of by a gentleman by the name of Stewart Wheeler, who started making a market to a close circle of friends betting on the price of gold.

Everywhere we read, the economy news appears to be worsening. As unemployment rises, house prices fall and companies suffer, and even go out of business like MFI and Woolworths. Companies are cutting back on production, making redundancies and taking longer Christmas holidays. This is a worldwide problem.

A sign of poor sentiment is often depicted in the way that spread bettors predict the movement of the markets. Those who had the foresight to use spread trading to sell commodities this year will be the few who made a fortune this year as oil dropped by two thirds and even the usually safe bet of gold has fallen by 20 per cent.

According to documents filed in court by Paul Page, a former royal protection squad police officer, spread betting, drinking and moonlighting was the culture of the royal police team responsible for protecting the Royal family.

Professional spread traders and those who take it seriously, as they should if they wish to make some serious and consistent money from spread betting, often have more than one spread betting account. Indeed, many have five or even more in order to ensure that they get the best spread and the best price for a particular trade and this generally means several usernames and several passwords if a user wants to keep his accounts completely secure.

This month saw the FTSE index, the shares index of Britain’s largest 100 public companies, lose more than £26 billion in what the economy terms as another Black Friday as share prices plunged, jobs were cut and currencies fell even further than before, including the value of the pound.

The falling index hit pensions, investments and has further damaged confidence in the British economy. Many investors lost a fortune, and yet many more made some handsome profits, on this terrible day for traditional shares investors.

The credit crunch crisis, as it has famously become known on a global scale, has come as a result of the never-ending credit offered to consumers over the last few years, it is generally agreed.

The current economic climate has forced consumers to face the borrowing levels they have built up and as a result the banks have become tougher and tightened their lending criteria.

Over the last few months, spread traders that specialise in the foreign currency markets, and even some savvy ordinary investors, have reaped some huge rewards by spread betting on the falling pound. Returns by spread trading on the demise of this currency have reaped greater rewards than buying shares and both spread betting companies and fixed odds bookmakers have reported an increase in bets on this currency.