Spread Betting - ‘Stake A Penny, Win A Pound’
Very much the same in some aspects to the CFD, spread betting could be done on a big number of stocks, and major Stock Indexes like the FTSE 100 Index, or Dow Jones Index, or the S&P 500 index, etc.
An ideal web site to visit, to begin learning about spread betting is www.financial-spread-betting.com which offers a really thorough quick-learning page on their website.
We begin with a few opening basics about spread betting…
First of all, do not be turned off by the word ‘bet’ which carries for lots of people, a number of totally unnecessary, negative connotations and preconceptions…
Spread betting is not like traditional betting, where a ‘bookmaker’ provides you with ‘odds’ and most likely winds up taking 100% of your original outlay. Spread betting is, simply speaking, the offering of a ‘middleman’ in a cross-trade (very similar to CFDs) between one party (you) and another party (another person like you who takes an opposite view on a stock or index price). To explain further…
For instance, if you bet that the FTSE index will go up, then, unlike traditional betting, you are not betting against the dealer, but somebody else (another trader just like you who could possibly be on the other side of the planet) who has an opposite view of the market (he or she obviously thinks the FTSE is going to go down, while you judge that it will go up). For every pound won, there’s a pound lost (or for every winner, there’s a loser, as the saying goes) - as in every other stock market transaction…
The spread-bet dealer is thus basically an intermediary (somewhat similar to a broker) between the 2 parties. He is neutral (there’s a tremendous amount of money to be made remaining neutral in this business). This is as basic as it gets, and makes a tradable marketplace where the spread bet dealer - a middleman - makes use of a rather sophisticated computer system which matching the buy/sell orders all through the trading day (even overnight in some cases).
So, how do spread bets work?
Firstly, you deal by way of a spread bet-dealer. There are a variety of these in the city of London. These spread dealers will send you a full, detailed, easy-to-understand information package that covers almost everything you need to know (including a lot of trading examples and illustrations, etc.) to be able to start trading spread bets…
Very much the same in some respects to ‘CFD’ trading, you can use spread betting to back both rising and falling markets. It is an ideal instrument (like the CFD) for trading the indexes, that we cover, when the index-trend is down, and also up.
For example, with the FTSE index, you can bet anything from 1 (even 1p from certain dealers!) to 250 per point (ie; 10, 20, 30, etc; up to 250)… For each point the market moves to your benefit (net of the initial spread), you gain that amount, eg; 10 per point, or 20 per point.
This then closes on our discussion regarding ’stock’ trading. As prescribed, you could make use of our Charting Tools screen, within the Click Volume software, in order to trade individual stocks. Simply click on “Charting-Tools” from the left hand menu, key in any stock symbol (or look it up by using our Symbol Lookup button/feature), and hit “DRAW” to view the stock chart and Trend Index below.
Keep in mind again, the Trend Index strategy works best with the large, high volume, liquid [blue-chip] stocks. Here are a list of some of the most popular blue chip stocks…
UK: Abbey National, AstraZeneca, Barclays, BP, BT, CGNU, Diageo, Glaxo Smithkline, GUS, HBOS, HSBC Holdings, Legal & General, Lloyds TSB Group, Marconi, Marks & Spencer, mmO2, Prudential, Royal Bank of Scotland, Sainsbury, Shell, Tesco, Unilever, and Vodafone Group.
USA: American International Group, Amgen, AOL Time Warner, AT&T, Bristol Myers Squibb, Cisco Systems, Citigroup, EMC Corporation, Exxon Mobil, General Electric, Intel Corporation, IBM, JDS Uniphase, Juniper Networks Inc., Merck & Co, Microsoft, Oracle Corporation, Pfizer, Qualcomm, Sun Microsystems, and Wal-Mart Stores Inc.
Note: It’s your decision whether or not you intend to trade stocks, indexes, or both. Our advice is that you find the market that suits you, and ultimately focus on this 100%. On the next page, we return back to our own favorite market of choice - the major indexes…
Getting the best information on Spread betting is no easy task nowadays. If you are looking for more information on Spread betting, then I suggest you make your prior research so you will not end up being misinformed, or much worse, scammed. If you want to know more about Spread trading, go here: Spread trading
Tags: Gambling, spread trading
