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.
