Getting started

Beginning to grasp the idea?

Just try a few 'What if?...' examples of your own to make sure you understand how spread betting works. And give the suck-it-and-see online 'fantasy' games a go - it's a chance to practice without risking any money.

Alternatively, try this simple test below to see if (a) you understand enough to get cracking (b) if spread betting will give you a buzz or a heart attack.

(We emphasise that this is a test. It is by no means a recommended system and should not be tried with real money.)

1. Pick your three favourite shares; those you believe are going to do really well in the immediate future.
2. Choose one share you think is a dog and whose price you think is about to crash.
3. Write down the name of each share together with the main reason for your choice. This is important because to pick shares at random and without good reason would be reckless. You will also be able to check whether the thinking behind your prediction is accurate.
4. Decide an amount of money you could afford to lose in any one month - not enough to make your eyes water if you lost the lot.
5. Distribute a third of the available cash in spread bets between the four shares assuming a margin rate of 10%.
6. Check the prices at least every day. (Yes, you have to do this. This is short term speculation and the markets are too volatile to turn your back on them).
7. Take paper profits and apply stop losses rigidly - remember, there is no place for emotion.
8. After exactly a month, take stock.

How much money would you have made or lost if you had been doing it for real? Did you enjoy the experience? Did you feel the buzz, the tingle, the self-assurance? Then you might, just might, make a successful spread better.

The actual process of placing your bet could not be simpler. Reputable companies offering spread betting are authorised and regulated by the Financial Services Authority. They are not allowed to operate in the UK unless they have this validation.

The requirements for opening an account are quite stringent, as they should be. The broker will want to know all about you, not just to check your ability to pay if you lose but also to make sure you understand the risks involved. The forms you have to fill in are comprehensive but not particularly intrusive.

When you have been accepted as a client you agree betting limits with your brokers and you are usually asked to deposit cash to cover your first trades. Then you place a bet on the share or index you have chosen and wait and see what happens. Good luck…