Spread betting is a way for people to speculate on the financial markets without having to invest large sums of money.
With spreads you are in-effect betting on a market either going up or down, unlike buying actual shares in the market that you can later sell at an inflated or deflated value, spread betting can be done with small amounts of money with massive returns.
This form of betting has become increasingly popular with people wishing to earn extra income from home and because of improved internet technology this is made possible to anybody wishing to speculate.
In this article I am going to outline a guide to spread betting and how to get started.
Spread betting companies facilitate a quick and easy way to speculate on the financial markets, unlike brokers who take their commissions from the proceeds of a stock or shares success, a spread betting company will take their commissions at the start of the bet by placing you into a trade at a lower price than you anticipated.
This method starts you in your position in the red and you need to make up that spread in order to break even.
Different companies have different spreads for different markets and it is worth doing some research into the particular market on which you want to speculate before choosing the trading platform to fulfill your needs.
Traders generally use financial charts as a guide to spread betting to translate technical data into an understandable format.
These charts are available from any good spread betting company and should be studied in great depth before taking on any trading activity.
It is the ability to decipher these charts that will grant ones future success in the financial markets.
Demo accounts and training are sometimes offered by these spread betting companies as a means to practice trading in a live market situation.
It is recommended that you take on this practice activity before speculating with real money.