What is Spread Betting?

November 05, 2018

Spread Betting feed IG

How to Hedge a Sports Bets?

Spread betting is a complicated way to put your money down, and something that should only be used by people who understand the potential risks that are involved. You can get into spread betting as a new player, but be sure to read up as much as you can before you do that, to prepare yourself for the experience.

There is no doubt that spread betting can bring you a lot of fun, and the thrill of a big win can be incredible, but don’t forget that there are risks involved, and when you lose, you can lose a lot.

When spread betting, you are speculating on whether a commodity will rise or fall in value. This can be sports, share prices or even house values, the choice is yours. All you do to place a spread bet is take a view on the price of offered by your spread betting operator based on whether you think the share price will rise or fall.

How Spread Betting Works

Spread betting firms offer you a quote based on the actual price of something like a share or the FTSE value. If you think the price will rise then you buy, with a monetary figure per points. If you think the price will fall then you sell for a monetary figure. The figure you choose is how much money you win or lose based on each point movement.

For example, if you buy something valued at 100 for £10 per points you will earn £10 for every point above 100. However, what you need to also understand is if the price falls, you will lose £10 for every point under 100. So, as an example, if the price rose to 110, you would be ten points ahead, which means a profit of £100. If the priced dropped to 94 then you would be six points down, meaning you would have lost £60.

What are the Advantages of Spread Betting

One big reason why many people are involved in spread betting is because they don’t have to pay tax on any of their winnings. On top of this, it can also be a cost-effective way to trade, instead of buying shares. When you buy shares with a broker you have to pay a fee, but when you are spread betting you don’t have to pay anything.

However, there is another benefit of spread betting that is not down to cost and that is the markets that are available. You can place spread bets on a number of different markets, from currencies to shares, to various sports betting outcomes. The flexibility to buy and sell in sports as well as with shares is something that appeals to a lot of people. When spread betting in sports there are many markets to work with, from how many goals will be scored in a game of football to the number of runs scored in a cricket game, you can get involved how you want to.

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