What is Financial Spread Betting and How Does It WorkAdded - Nov. 18, 2013 Financial
One type of financials betting that has increased in popularity is called financial spread betting, and while it covers a number of different types of bets, they all have a basic set of premises in common. Here we're going to show you the basics of how this type of wagering works.
The Parameters of the Bet
All financial spread betting is based on the value of a stock (for example) going up or down over a set period of time. The length of time can be set to a finite length, or you can leave it open based on stop-loss and stop-win measures. You can bet for or against the stock as well. You'll generally set a bet size at a certain amount per point like $5 a point or $20 a point. The amount that the value of the stock goes up or down multiplied by your bet size determines your profit or loss.
Compared to Binary Options
Financial spread betting is often compared to binary options because they are both bets based on a price going up or down, and you have the opportunity to either bet with or against the price. The main difference is that the win and loss in a binary option is always a static bet amount. If you win your bet by .1 points or 50 points, it's all the same. With financial spread betting, the amount that you win or lose by directly affects the size of your win or loss instead of it being based on a set fee to win a set prize.
The Strategy Involved
The strategy involved with financial spread betting is also much more complicated than binary options because you have a lot more potential outcomes to consider. This means that financial spread strategy is fairly complicated, and you'll have plenty of opportunities to do research and try to figure out where the good bets are. Different sites will allow you to place bets based on different types of parameters, and if you can spot good bets from within those parameters, then you'll generally be getting the best of it if you're right.