Spread betting for dummies

If you disregard the derogatory title of this article and recognise that not everyone knows the full story in terms of spread betting then you will understand that not only will this article teach some people a thing or two, it also allows everyone to see the bigger picture when it comes to financial spread betting or spread trading as it is sometimes referred to.

No-one is saying that it is hard to understand yet there are so many people who think because it’s called spread ‘betting’ that it’s some kind of gambling that takes place at the bookies every afternoon.

Spread betting leans more towards trading than it does betting; this has now probably conjured images of high flying businessmen and women in pinstripe suits screaming and shouting at an innumerable amount of figures on a screen.  Enough with the stereotypes?

Financial spread betting is not limited to stockbrokers at all, in fact anyone can do it and with the recent influx of online companies offering easy to understand and practical platforms to use, any old dummy can in fact take part.  Pardon the phrase.

A financial spread bet is a derivative, this means it’s not a live share and you never actually own the stock you are betting on.  As a spread better you are permitted to take a stance as to the value of the stock moving either upwards or downwards in the marketplace.  Simple speculation rather than ownership.  A spread better is not just limited to stocks and shares, there are many market instruments you can tinker around with; currencies, commodities, and even stock indices, you can even enter into the world of sports betting if that’s what you choose to spread bet on.  The choice is yours and once you decide how you wish to continue there is the added bonus that if you win, all your winnings are free from tax which is as good an incentive as any.