Spread Betting

Spread betting refers to a bet on an unknown outcome, often in events such as sports, made at odds set by the spread betting company. The spread betting company takes an instrument and quotes two prices, which they call a spread, and are effectively a bid and offer price. A bet is made on whether the outcome will be above or below the spread, and the profit or loss depends on the level of the index at the culmination of the event.

Financial Spread Betting allows punters to make leveraged bets on the movement of stocks. Spread-betting offers more leverage than in trading the stock market, and also allows users to take a ‘short‘ position and capture a profit from falling prices. Unlike when trading the stock market, you do not actually own the shares. Spead betting simply allows you to speculate on the price movement of securities. Spread betting is a highly risky form of gambling, and you can lose more than your initial stake. Furthermore, you cannot offset your losses against tax. It is possible to limit your losses in spread betting with the use of stop loss orders.