Spread Betting: What is Spread Betting?
May 27, 2010 10:04 pmVideo
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Spread betting is the flexible and tax-efficient way to back your judgement in the financial markets.
You can go long or short of a huge range of markets to profit from rising or falling prices. You simply ‘buy’ if you think that the price is set to rise, or ‘sell’ if you think it will drop.
The degree to which you are correct dictates how much you win or lose. In simple terms: the more a price moves in your favour, the more money you make; the more the price moves against you, the more money you lose. And with Controlled Risk betting you can cap potential losses without putting a ceiling on your profit.
How It Works
The concept of spread betting is simple. If you think a market is set to rise you ‘buy’ at the top end of our quote (the offer price), or if you think the market will fall you ‘sell’ at the bottom of our quote (the bid price).
Your position is a bet: you never actually own the instrument you are ‘buying’. The important fact is that when you ‘buy’ you want the price to go up, and when you ‘sell’ you want the price to drop.
The difference between the bid and offer prices is known as the ‘spread’. The dealing spread is the only charge you pay; there are no fees or commission.
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