So, what exactly is Spread Betting?
So, you must ask yourself what is spread betting? Spread Betting is a kind of betting done on the outcome of any event which is about to take place or the change which is scheduled to happen. Against the occurrence, a proposed position, which is called the spread, will be offered outside the stated outcome. Most probably better spread would be a bet, more or less than the actual spread offered. It involves significant risk.
The better wins in the sort of points are in accordance with the difference between purchase and selling price. For instance, take an example of stock exchange. If the share price is 100p and the spread offered is 97-103p. A better would assume that the price would shift the either way- outside or inside. So, if one sells these stocks at the price of 10p per movement and the stock falls to 95p, then the better would win twenty points. Similarly, the better would win thirty points if the stock falls to 94p. Also, one could buy the stock in a converse manner.
Spread Betting has become one of the major growth markets, especially in the UK. Millions are involved in Spread Betting. It allows one to predict what the financial market will be doing next. It can be profitable but also great loss can also be faced. As more market runs according to one’s favorable conditions, chances of winning increase and as more markets run against one’s bet, chances of losing increase resulting in great loss.
Spread Betting can be divided into two main types:
- Financial Spread Betting
- Sports Spread Betting
Financial Spread Betting is an alternative to conventional betting where one predicts whether the market will go up or down. This can be analyzed by the current market conditions and the factors affecting it like money. This can be a major source of attraction for the traders trading in shares, currencies, stock or precious commodities like gold or diamonds to increase their profits.
Sports spread betting is not only based on the win or loss of any team but also minor scores. Like at the end of the match, the bet stated must be greater than the addition of bet and final score to win the bet and vice versa to lose.
The most attractive feature of spread betting that any gains does not require any taxes or attract any stamp duty because the spread betting takes place between the client and the spread betting company, therefore no shares are hold so no stamp duty.