Spread.co.uk
Our website will soon provide you with not only all you need to know about
spread betting but also links to websites where you can place bets.
Spread betting is a style of gambling which is based on outcomes which a
bookmaker thinks may happen when predicting the likely outcome of an event
or match. The 'spread' covers the most likely results of said event and is
made up of two different prices; a higher 'buy' price and a lower 'sell'
price. If you think that the prediction made by the bookkeeper will be
exceeded you call to 'go long' and likewise if you believe that the
prediction for the sell price is too great, you can opt to 'go short'
instead. Spread betting is so popular because of this opportunity to bet on
both the increases and the decreases in an event and it's especially popular
in the financial sector because of this.
You can place spread betting into three different categories: finance, sport
and novelty. Financial spread betting is when you bet on movements in the
stock market and any other financial indices without actually purchasing any
stock, because of this it's often used to hedge against any decreases in
share prices or in the market value of something. Sports betting is a very
wide field and can be used for betting on anything from the number of goals
scored in a match to the time that the first is scored. Novelty spread
betting then covers any other fields such as election seats being won or the
number of votes on a reality TV show. The things you can bet on really are
endless.
Spread betting works on a basis called margins where you have to give a
deposit of around 10% rather than handing over the full amount. This means,
in theory, that you have more money to invest or bet in other areas, or it
allows you to bet a little more than you usually would because you're only
handing over a percentage (known as gearing). However, you will need to have
the full amount for the bet readily available should you lose and need to
hand it over and because of this a lot of brokers offer credit accounts.
Spread betting doesn't have fixed stakes and instead works on a pound per
point basis meaning you state the amount per point that you want to bet
with. The closer to the correct answer or result you are, the more you win.
The potential winnings are uncapped and limitless in these games, but this
also applies to losses and the further from the result you are, the more
money you owe the bookmaker.
When you do spread betting, you're betting 'live' so you're able to both
open and close any bets during an event. If you suddenly end up in a
position where you're likely to lose, you are entitled to change your stand
or close the bet entirely. A lot of bookmakers will offer a stop loss option
which means that you can set a limit for your losses so that the bet closes
when you reach this stage. Although this service usually comes at a cost,
it's very much advised you use it to limit your losses.
Stop loss orders will close out a bet at your desired time, but there is a
potential problem with an ordinary stop loss which is known as 'gapping'.
Gapping is when the market is running quite fast and a lot of stop loss
orders are put in all at once. These stop loss orders are judged on a first
come first served basis and because of this you might not be able to stop at
the level you wanted. To counter this you can pay extra for why they call a
'guaranteed stop'. Guaranteed stops allow you to pay your broker a slightly
larger spread to enable you to get out at your specified price no matter how
many other people put in a stop loss order at the same time. Your broker is
basically buying you out of the trade and if you're in a high speed bet that
could change at any moment, this insurance could well be worth it.
More experienced investors will often use financial spread betting as
another trading tool because of the low commissions on them. Many other
investors will also use it as a way of hedging their current share
portfolio. For example, if you owned some shares that were going down in
value on the short term you could then sell the value of the share through a
sell bet. You don't need to be experienced in the investment world to spread
bet, but research is a very important tool and it pays to research the
products you're betting on to see any trends. A lot of people both new and
old to spread betting use a lot of technical tools and charts to make their
predictions, and it's good to find out about this yourself as well.
Under UK law, spread betting is considered gambling because of the
associated risk factors. For this reason however it means you won't pay
stamp duty or capital gains on your winnings and in addition to this the
bookers fees are usually quite small or already included in the margin. Many
betters are more than happy with this situation as a correct prediction
ensures all winnings will be profit for you. Spread betting can be a very
profitable and fun form of gambling as long as you research fully and make
sure you only play with money that you can afford to lose if things take a
bad turn.
Contact
If you wish to contact us for any reason please send an email in the first
instance to info@spread.co.uk.
