Spread betting is a method used to make money depending on the direction a stock will move through a financial market, as opposed to purchasing actual stock. The idea is to purchase points of a spread on a particular stock at the upper end of the spread and sell said points when it reaches the lower end of the spread. Those who choose to spread bet utilize one or more of several different spread betting companies who specialize in this particular type of trading.
Some of the companies who provide spread betting services in the UK include, IGIndex, CMCMarkets, City Index, Capital Spreads, Fin spreads, Sporting Index and Saxon Spreads. Anyone outside of the United States can utilize these companies, along with a dozen or more other companies, to dabble in the financial market by spread betting.
There are people in the world who should absolutely stay away from spread betting. Those looking for a get rich quick scheme, those who do not have disposable income to gamble and those who plan on using money dedicated to the mortgage or household bills should not consider spread betting as an alternative to gainful employment. As recent survey indicated, the majority of the currently active spread betters in the UK are financially stable, middle aged professional men with disposable incomes.
In general, spread betting companies will offer a guide to spread betting for beginners. This guide should educate the new financial investor regarding systems and software used to track the stock market and how much of an initial investment is required. The initial investment is generally calculated on the high end of the spread, multiplied by the number of points purchased and the amount of the commission charged by the spread betting company.
Spread betting is a profitable financial move for those who can understand the way stocks fluctuate and can bet with some risk of losing money. Most companies advise spread betters will profit on four to five bets out of ten purchased. To some this may sound like bad odds, but they are absorb able losses when one considers the four or five profitable bets will well compensate for the bets that lose money. Remembering to fully investigate the legitimacy of a spread betting company will go a ways toward mitigating any possible risks of investing.