Financial spread betting is definitely a simple way to make money on the world wide financial markets with out needing to get over involved with stocks and also shares. When you understand this form of betting then it can be a pleasurable way to play the market.
This kind of betting works using the financial markets. You may use any type of market you want from currency, to minerals and also the principal markets such as the FTSE 100, Dow Jones and CAC. It’s always best to opt for the market you happen to be most experienced with and also have analyzed in the past. It is actually simpler to demonstrate this type of betting by way of example and for this informative article we are going to make use of the FTSE 100.
The Basics Of Financial Spread Betting
With this example we will be hypothetically betting on how the FTSE 100 could possibly react on any given day. The very first actions you need to take is actually to discover the "spread" on the FTSE 100 for that day. These days you can do this on-line with whichever firm you’ve selected to have an account with.
You go to the website and they will quote the spread for the FTSE 100 for that particular days trading. In this example the spread is 6350-6500 (6500 to place a "buy" or "up" bet and 6350 for a "sell" or "down" bet).
What Do You Imagine May Happen That Day?
Now this is when you need to put your money where your mouth is. Should you think the FTSE 100 will rise then you place a "buy" bet. You have to bet a certain amount per point. In this example we are going to bet $10 per point. This means every point the FTSE 100 goes up you are making $10. If by the end of trading the FTSE 100 was at 6700 an increase of 200 points you would make $10 x 200 points this means $2,000 in your pocket.
That Sounds Great Right?
There happens to be a drawback and that is if the market were to slide by 200 points you would then lose $2,000 but of course you can bet for the FTSE 100 to drop.
What Happens If You Think The Market Will Fall
If you think the market will fall you would then place a "down" bet. We will use $10 per point once again. With this example if the FTSE 100 were to fall to 6200 that would be a fall of a hundred and fifty points. This would produce a profit for you of $10 x a hundred and fifty points which means a profit of $1,500. If the market were to go up however to 6500 you would lose $1,500.
Easy As Pie
Financial spread betting is that simple; you’re merely betting on if the market goes up or down. There are ways to limit your losses to protect yourself if the market goes drastically in the other direction to how you have bet. This kind of betting is definitely an instant along with a quick way to trade on the world-wide markets which is why so a lot of people are choosing to make money from financial spread betting.
