When opening a spread betting account, you will immediately notice that there is a “+” in the middle of your account number. This is because spread betting is a type of financial product where you are required to put down a deposit, but you are not allowed to take any money out. This makes spread betting different than other types of investments, such as stocks, where you can withdraw your investment at anytime.
However, just because your account has a “+” in it, this does not mean that all is well. In fact, there is a lot more that you need to know about spread betting before you make a deposit.
Is It A Good Or Bad Investment?
To start off, let’s discuss the good aspects of spread betting. From an investment point-of-view, spread betting is a positive development because it provides individuals with a new way to invest. Instead of going to a bank and buying a share in a corporation, you can do it online and from the comfort of your home.
From a historical perspective, spread betting is a relatively new form of investment, so it’s natural that there are no established rules and regulations for it. This makes it easier for individuals to enter the market. However, even though spread betting has recently emerged, it is still considered a very risky investment. This is because there are numerous cases of people losing their entire deposits due to the high volatility of the market and an unpredictable economy. It’s also quite common for brokers to go bust because they can’t control the risk of losing large sums of money due to unexpected market movements.
On the other hand, as a new form of investment, spread betting has a lot of potential because, as previously stated, there are many cases of people enjoying huge profits from it. Given these facts, it’s clear that spread betting is not something to avoid but, rather, to embrace. You just need to know what you are getting into.
How Is It Unique?
It’s quite unique in that it allows you to gain both financial and gambling benefits from the same platform. With any other type of investment, your financial gains will come at the expense of your gambling losses. This makes spread betting a very attractive proposition because it allows you to try your hand at gambling, while still earning a respectable return on your investment.
On the opposite end of the spectrum, you have high rollers. These are individuals who are very much into poker and casino games and feel that spread betting is just a tool to help them stay in the game longer. Essentially, they see it as a way to hedge their large bets. The reason why they like it is because it lets them keep the excitement of the game while also enjoying the safety of a pre-set limit. This is why, more often than not, you’ll see poker players opening spread betting accounts. With any type of investment, your initial deposit will serve as your maximum possible loss, so in theory, you’re not risking very much. In practice, this is rarely the case. When you place a large bet in a game of poker, the rules of probability dictate that you’ll eventually lose. The key takeaway from this is that although you aren’t risking very much, you’re still risking something.
How Is The Performance Of Spread Betting Measured?
This is a very important question, especially if you are looking into placing a large bet on a game that you feel is likely to go your way. In the context of spread betting, the performance is measured in terms of how well your investment did, compared to what you initially laid out. For example, if you initially invested £100, and the value of the investment today is £120, your performance is +20%.
However, if you invested £100 in Apple shares, which now are worth £150, your performance would then be -16% (or £50). When you look at these numbers, it’s pretty apparent that you’re better off avoiding stocks and going with the flow of things. Of course, this is just a rule of thumb and not a hard-and-fast rule. There are always exceptions to the rule.
Furthermore, as previously stated, spread betting is a very new form of investment, so there are no set standards for measuring its performance. For this reason, even the professionals who work in the field are still learning and understanding what metrics to use. Due to the lack of standards in this area, it’s quite difficult to determine the true performance of spread betting. This is why you should only ever do this type of investment with what you consider to be a healthy chunk of change, as a test subject.
Can I Get A Return On My Investment?
The short answer to this is no. When you open a spread betting account with a broker, you are not going to see any return on your investment because, as a financial product, there is no possible way for them to do so. However, in a casino or poker environment, where you could potentially win money, you could potentially win money and then return that money to the account as part of your earnings. In fact, this is how most people find success in online gambling. Even though you are not going to see a return on your investment, you could still potentially win some money and then use that to reinvest, hopefully to make even more money.
How Much Can I Deposit?
This is yet another important question, especially if you are considering putting money into a product that is so new that it doesn’t have any established rules and regulations. As stated before, even the professionals who work in the field are still learning the ropes. One of the things they’re unable to teach you is how much money you can actually deposit into a spread betting account.
The answer to this is £2,000, which is the maximum that most brokers allow. Anything more and you’ll likely have to look for another broker. However, in practice, this is highly unlikely to happen. You’re either going to love or hate betting with this much money. Most people who love sports betting are going to have a difficult time getting this much funding without going bankrupt. On the other hand, if you’re trying to make a small fortune by betting on the stock market, you’re probably going to end up with a bigger one than you can handle. So, again, it depends on your personal preferences.
In summary, spread betting is a relatively new type of investment and, as such, there are no hard-and-fast rules or guidance on how to do it right. This being said, all is not well. Even though there are a lot of positive aspects to it, spread betting is still considered a very risky investment and it’s quite common for brokers to go bust because they can’t control the risk of losing large sums of money due to unexpected market movements. In most cases, it’s not worth the risk and it’s better to avoid it.