How to Learn Spread Betting – A Complete Guide

Buying and selling securities on margin or otherwise taking on debt to finance your investments is high-risk, and it’s certainly not for the fainthearted. But if you’re keen to explore the fascinating world of spread betting then read on – you might just find that it’s the perfect way to invest. With some simple advice, we’ll introduce you to the wonderful world of spread betting, and how you can easily get started.

The Basics Of Spread Betting

Put simply, spread betting is when you place a bet on the outcome of an event, such as the winner of an upcoming sports match. The beauty of spread betting is that the odds are always in your favor: if you believe that one team will win, you can simply bet on them, and you’ll get your money back plus some if they do win. It’s essentially placing a wager on an event that you don’t fully control. When you win, the house edges the risk away and keeps the gains.

A key difference between traditional investing and spread betting is that with the former you’re typically investing money you can’t afford to lose, whereas with the latter you’re only risking what you can afford to lose. For example, if you put £100 on a horse you believe to be a certain favorite to win, you’re taking on a massive debt; if it loses, you lose £100. In contrast, if you stake £5 on a winner at odds of 2-1, you’re only risking £5 (actually, your stake is shared with the bookmaker, but that’s beside the point), and you’re guaranteed to win your money back plus some, plus you escape the possibility of debt.

Another difference between traditional investing and spread betting is that with the former you’re trying to pick winning stocks and shares, whereas with the latter you’re simply placing a wager on the outcome of a sporting event, be that good, bad or indifferent.

How To Learn Spread Betting

Now, you might be wondering how you can actually get started with spread betting. If that’s you, then you need to learn how to trade in forex (that’s the trade name for the contracts that traders use to buy and sell securities), which is a very similar process to placing bets on sporting events. The best way to do that is to follow the exact same steps as a successful retail investor would, which means first establishing yourself as an individual with a good deposit account and then using that to enter the forex market. 

As a first-time trader, it’s always recommended to start small and then gradually increase your stake, so you don’t lose all of your money all at once. With that in mind, you could put £10 on a pair of NHL Hockey tickets, or you could go all-in on a football match and stake £100 on Ronaldo winning the World Cup this year. Just remember: the more you stake, the more you could potentially lose.

More Information

If you’re just getting started, it’s important to do your research and make sure you’re fully aware of what you’re getting into. One of the best places to start is the International Business Machines (IBM) website, which carries extensive information on spread betting. You can also visit the CFTC website for more information on the U.S. binary options industry.

Plenty Of Choices

One of the things that makes spread betting so attractive is the sheer number of markets you can bet on. If you’re a fan of horse racing, you can bet on the favorite, the long-shots, or both; if you’re a fan of Formula One, you can bet on the drivers, their teams, or both; if you’re a fan of American football, you can bet on the outcome of the game; and so on. 

Furthermore, many of the larger bookmakers also offer a spread betting service, which allows for more complex wagers. If you’re looking for a way to get involved in sports betting without having to deal with the complexity of placing bets on individual teams, then spread betting might just be the ideal solution. Just remember: if you’re not aware of how spread betting works, all of that betting activity can look very jumpy to an untrained eye.

Possibilities For Earning Money

A crucial part of any successful investment strategy is being able to effectively monitor your performance and analyze the results of your efforts. Luckily for you, we’re economists and we know exactly what constitutes a profitable investment strategy, which is why we’ve compiled a list of the best online trading platforms for traders worldwide. 

The first thing you should do is register an account with one of the top-rated brokers that offer spread betting. Next, you need to fund your account with $100 to $1000. Finally, you need to consider what type of trade you want to make: do you want to bet on whether or not a stock will go up or down? Or do you want to try your hand at short-selling (that is, betting that a stock will go down in value)?

The choice is yours. Just remember that you’ll need to maintain a good balance between your buys and your sells to ensure that you don’t overextend yourself. Once you’ve found a good broker, you can get started with a minimum deposit of just $5, and you’re good to go.

More Sophisticated Trading Techniques

Now, if you’re really determined to get into the more sophisticated side of investing, you might want to consider taking up scalping (cutting large bets down into smaller pieces), which is when you exploit small price movements in the market to make huge gains. For example, in the 2016 NHL Playoffs, a fan scalped a Lakers-Celtics game with a massive gain of £120,000, which is quite a remarkable feat when you consider that he invested £10 on the game.

Another strategy is Diversification, which is when you spread your bets over a number of different markets so as to reduce the risk of losing all of your money in one place. Diversification offers the advantage of lower risk, as you won’t lose money if, for example, the NASDAQ fails to rally, but other market participants are more successful than usual. Lastly, active investors will often use trend analysis to determine when and where to enter the market. Essentially, trend analysis entails watching the market for signs of trends (uptrends are when the price of a financial instrument rises consistently over time, while downtrends are when the price drops consistently.). Using trend analysis, you can effectively enter the market at the right time and place, which can significantly increase your potential for success.

These are just a small selection of the strategies that professional traders use to make money, but rather than trying to follow a set strategy, every successful professional trader uses a combination of the above techniques to bring in consistent gains.

The Bottom Line

Investing in securities is a risky business, but it’s a business that pays off in the long term. If you’re looking for a way to make a quick buck and don’t mind taking on a bit of risk, then spread betting might be the ideal solution for you. Remember: the more you stake, the more you could potentially lose. But if that’s what interests you, then it’s certainly an option worth considering.