How to Make Money With Spread Betting?

Spread betting is one of the most popular ways to make money online. Launched in the late 1990s, the concept behind spread betting is to make winning trades simpler and more affordable for the average person. While you might assume that spread betting is similar to traditional betting—you place a wager on the outcome of a sporting event or a political race—the premise is quite different. Where traditional betting allows you to place a wager on the outcome of a single event, spread betting takes a more low-risk approach. Instead of placing a wager on the outcome of a single event, you place a wager on the spread between two or more events.

The concept is simple: you place a wager on the outcome of two or more events, with the goal of making money when at least one of those events turns out to be more profitable than anticipated. For example, you might back the New England Patriots against the Los Angeles Rams, or you might bet on the price of gold vs. the U.S. dollar.

You learn to trade in financial markets through trial and error, and with the help of mentors who are experienced in spread betting. Once you’re equipped with the basic knowledge needed to succeed as a trader, you can begin applying what you’ve learned to generate income from home.

This article will give you an overview of how to make money with spread betting so you can get started right away.

Things To Keep In Mind

Before you begin making any serious investment, it’s important to take a few things into consideration. One of the most important things to keep in mind is how spread betting works. As the name might suggest, the spread between two or more prices is what you’re primarily focused on—not the absolute value of those prices. For example, let’s say you’re long gold and short the U.S. dollar. If the price of gold suddenly tanks and drops 10%, but the dollar is still trading at 1.10 on the trade page you monitor, you’re going to lose money on your position. However, if the dollar drops to a 1.00 level on the trade page, you’re going to make money—even though gold dropped sharply in value.

When you’re placing a wager on the spread between two or more markets, it’s also important to keep in mind the theory of implied volatility. As the name might suggest, implied volatility is the measurement of how much the price of an underlying security (such as an equity or a bond) will fluctuate over time. In plain English, this means that it’s not always easy to pinpoint an exact value for a stock or an ETF (exchange traded fund).

One final thing you need to keep in mind when you’re making money from spread betting is how credit cards work when you use them to make a purchase on a market you’re trading in. For example, let’s say you’re using your credit card to purchase 100 shares of AAPL at the current market price of $400 per share. Your credit card company will assess a certain amount of “interest” on that $4,000 purchase. What this means in practice is that if you’ve traded in a market that has a 30-day hold period, you’re going to have to wait until the 30th day after your credit card transaction to settle your account and get your money back.

Where To Start

As mentioned above, you must be aware of how spread betting works before you get started using it to generate income. To that end, it’s important to note that you can’t just jump in and make money—you have to learn how to properly execute a trade and manage your risk. One of the best resources available online to learn how to properly place a spread bet is Covertly Profitable. This is an independent investment research company that was founded in 2014 and is dedicated to helping people like you make money from home by offering in-depth tutorials on investing and financial literacy.

Covertly Profitable has made it their mission to “cut through all the clutter and hype” in the investment world and offer an objective, no-nonsense approach to stock picking and investing. They also keep things simple—it’s not hard to understand or remember how spread betting works if you’ve never done it before.

Another great resource available online for those who want to learn how to make money from home is eToro. eToro is one of the biggest online brokerages in the world, with offices in multiple locations around the world and about 200 different countries covered under one membership. They offer all the basic investments you’d expect from a broker—stock index funds, bonds, and gold—but they also make it easy for beginners to get started with CFDs (contracts for difference) on various markets including the Dow Jones Industrial Average, the S&P 500, and the Nasdaq. What this means in plain English is that you can open an account with eToro, make some preliminary trades to get your feet wet, and then stick with what you know while an experienced mentor helps you navigate the more complex aspects of investing. eToro was recently valued at nearly $1 trillion, so they clearly have something good going for them.

How To Make Money With Spread Betting

Thanks to the internet and the explosion of online business, individuals have access to a wealth of resources to help them learn how to trade and make money. However, finding the right mentor who can show you the ropes and point you towards a profitable track record can take some time. Even after you’ve connected with a solid mentor, you must continue to educate yourself on how to make money from spread betting. Fortunately, trading education companies such as Forex Factory and MetaTrader 4 are on the lookout for individuals who want to learn more about spread betting and how to make money with it. These companies offer in-house training as well as one-on-one mentoring to help you get started.

To succeed as a trader, you must learn to manage your risk. Unfortunately, the sheer volume of assets floating around on financial markets makes it difficult to know where you should position yourself on any given day. This is where using a credit card comes in handy—not only can you take a financial hit if the asset you’re trading drops in value, but you can also take a hit to your FICO score if you make too many charges in a short amount of time. However, using your credit card for investing is different from using it to make daily purchases. You must learn to keep your spending in line with your income and avoid racking up unnecessary charges—those costs can add up quickly.

When using your credit card for investment purposes, you are in effect betting on the future price movement of a market—this is a much more complex strategy and comes with a much higher chance of winning or losing. For this reason, you must learn how to properly minimize your risk by hedging your bets. Fortunately, this is a strategy that most forex brokers will happily take care of for you. Most forex brokers offer multiple investment opportunities and platforms, allowing you to choose the best one for your needs. You can also contact most forex brokers directly to get started.

Whether you’re experienced in trading or you’re entering the world of investing for the first time, understanding how spread betting works and finding the right place to start are critical steps to take before you begin generating income. At this point, you might be wondering how to make money with spread betting. The next section will answer that question and more.