Spread Betting

Guide: General Information


The fact that there are now more than 75,000 spread betting accounts alone in the UK speaks for itself more than any advertisement could. Despite grumbles from traditionalists, there must be something about these new-fangled ways of investing.

Using spread betting is certainly not for everyone. And let's not be afraid to call a spade a spade. We are talking about speculating here.

If you are the sort of person who prefers to stick their money under the mattress or buy and hold with the aim of leaving your shareholdings to your grandchildren you are reading the wrong guide.

However, spread betting is a very handy tool when it comes to backing a whole range of shares and markets.

The important point to make is that spread betting allows you to deal in bigger size than conventional trading. If you get the market direction right this can mean bigger profits but if you get the market direction wrong it means bigger losses. You must grasp the concept of what is known as margin trading as you could lose more than your original deposit on a trade.

There is nothing wrong with short term speculating and you shouldn't be intimidated by flashy marketing or flashy trading screens.

Anybody can use spread betting as a convenient and easy to use way to back a list of markets and shares as long as your arm. Better still you can (to pardon the expression) swing both ways - and back an investment to go up or down.

The one caveat is that you should know what you are doing to avoid getting your fingers burnt - which to be fair applies to all areas of the financial markets and indeed most areas of life.

In other words, open your eyes to the advantages of spread betting - but keep your eyes open.

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