It’s all in the strategy

It can be difficult to explain the variances of spread betting but most index spread betting doesn’t take place on the stock market itself but on the futures contract. Futures provide a ready-made market that remains constant for everyone around the industry but also is very fast at pricing that market.

The confidence that comes with being able to quote a price direct from the exchange helps to make the spread betting industry a stable proposition to investors. Also, this provides the spread betting firms with a means of hedging allowing them to trade the futures contract for their own account even though their liabilities move beyond acceptable limits.

It is now becoming common for spread bets to end up aggregated and hedged directly into the futures market whereas bets on indices is a more direct way of betting without disrupting an investors underlying share portfolio. Speculators can bet on shares on an individual basis making spread betting a fun way of punting your money.

On the other hand trading indices may be a more reliable strategy if you’re looking into emerging markets because it is easier to take a decision on where a whole market is going than an individual stock. With so many different ways to spread bet you can easily find a method that works for you.