What Is Spread Betting? How to Profit from Spread Betting

There is a new way to make money online – spread betting. What is it? How does it work? Is it for real? These are some of the most common questions about spread betting. Let’s answer them one by one.

What Is Spread Betting?

Put simply, spread betting is about making money off the differences in price between two or more markets. For example, you might want to bet that the price of Gold will rise relative to the USD.

Why Gold? Maybe you believe that the price of digital currencies like Bitcoin and Ethereum will decline in value, while gold is seen as a safe haven for investors who want to protect their digital investments from fluctuations in value.

What makes this form of betting different from standard market trading is that your financial gain is not dependant on the price of the asset you are betting on rising or falling. You are taking a more long-term view, which is why many people call it ‘long-shot’ or ‘differential’ betting.

How Do You Calculate The Gain From Spread Betting?

You will need to do a bit of work to figure out your profit from spread betting. To start with, you will need to determine how much you are hoping to make from the trade. Next, you will need to calculate how much you are risking on each side of the trade. For example, if you think the price of Gold will rise against the USD, you will need to find the USD/Gold rate, which you can then use to calculate your gain or loss from the trade.

Now that you have the basics down, let’s talk about the methods for making money from spread betting. If you want to be a professional trader, you can learn the ins and outs of spread betting and apply this new approach to investment. If not, there are plenty of easier ways to make money online such as trading CFDs or writing online winning-spells.

Where Can I Place My Bets?

Just as there are many different ways to profit from spread betting, there are also different locations that you can use to place your bets. Obviously, you can’t take your broker’s advice when it comes to which online broker you should use to trade Bitcoin or Ethereum because they might recommend an unregulated platform, but it is generally best to choose a regulated exchange.

On top of that, most platforms allow you to specify the currency you want to trade – whether it’s USD, GBP, or HKD – so you don’t have to use a currency you aren’t familiar with. Finally, some platforms let you choose the leverage you want to use when placing your bets. This means you can put up smaller bets with higher leverage, provided you meet the necessary financial guidelines.

Which regulated platform should you use? Let’s examine some popular choices. First up is MetaTrader 4. This program is the grandfather of all cryptocurrency trading platforms, having launched in the very early days of Bitcoin. It is also the platform used by most of the big financial houses and investment firms for online trading. What is more, it is considered the most secure and versatile among its users due to its ability to operate smoothly across all major devices.

Next in our list is Changelly. This service allows you to quickly and easily convert your fiat currency (like USD, GBP, and HKD) into Bitcoin and vice versa. The biggest advantage of this service is that, in addition to converting your currency, it also offers you a diverse range of equities, CFDs, and crypto-assets to trade in.

Last but not least, we have IG Clientele. This platform is designed with the novice trader in mind. It is extremely user-friendly and contains all the basic functions you might need to start making money with Bitcoin and other cryptocurrencies. The best part about this platform is that all the trades are performed using CFDs. This means you don’t have to worry about the price going above or below your chosen amount. Simply set up a profit target and push the button when you reach it. Easy, right?

How Long Does It Take To Profit From A Trade?

Once you have determined how much you are hoping to make from your spread betting trade, you can then figure out how long it will take to reach your target profit. This depends on a number of factors, some of which are out of your control. For example, the price of Bitcoin you are trading might rise or fall every day, while the amount of currency you are using to enter the trade varies from one day to the next. These are just two of the factors that could affect the speed at which you make money from spread betting.

Some platforms, like MetaTrader 4, have an internal rate of return (IRR) built into the platform. This rate is based on the interest you are earning on your funds deposited. Naturally, the higher the interest rate (typically around 4%+), the faster you will make money from placing bets. What is more, MetaTrader 4 allows you to leverage your bets using different methods, called ‘leverage strategies’. Some of these strategies are considered high-risk, so make sure you are aware of the associated fees before choosing this route.

When Does My Profits Come In?

Once you have reached your target profit, you will need to determine when to collect your earnings. There are several options here. You can choose to get your money out either at the end of the month, at the end of each quarter, or at the end of each year. Most people choose to get their profits at the end of each quarter, or at the end of the year. The main reason behind this is that many platforms offer zero-fee or low-fee currency conversion, so the incurred fees are relatively insignificant. Also, many platforms offer several methods for withdrawing your earnings, allowing you to choose the one that suits you best. Some people like to get their profits as soon as possible, while others want to wait until all their positions have settled.

What Are The Risks Involved With Spread Betting?

Like any other form of investment, there are risks involved with spread betting. The biggest risk is all the money you are risking. If you decide to enter a spread betting trade with a $10,000, then you will need to have at least that amount in your account. Further, you should also ensure you are using a platform that is regulated and supported by a credible brand. Finally, just like any other investment, you should look for a broker that has an excellent reputation and offers a high level of customer support. With these precautions in mind, you can feel confident knowing that spread betting is a legitimate way to make money online.