Spread betting is a form of investment in the particular dynamic market – like forex, shares or indices – without actually holding the property. In other words, spread betting with ETX Capital allows you to figure out on the movement of a particular property – like a currency pair, company stock or even an entire index – without actually owning the property.
With spread betting, you anticipate an aftermath result, and the severity to which you are correct or wrong explaining the size of your gain (or loss). Spread betting differs from alternatives such as fixed-odds betting, where you have a simple win/lose outcome and a pre-defined payout or loss.
When economic spread betting, the result you’re anticipating on is the direction in which the price of an economic mechanism will move. You will be on the profit side, if the move you have anticipated is in the direction of gain and profit will grow further with it. However, if the market moves against you, your loss will also increase as the price movement becomes greater. Going long is the word referred to the Betting on the price increasing, Going short is referred to the betting that it will price decrease.
The spread
Spread betting gets its name from the spread that all providers wrap around the underlying market price. The costs of the trade are considered into the two prices offered by IG, so you will always buy slightly higher than the market price, and sell slightly below it. This is the spread.
Financial spread betting enables you to bet on whether the price of a financial instrument will move above or below a given spread.
Reasons to spread bet
- Tax free*: It is tagged with class of gambling, hence you won’t have to pay any tax on any potential profits
Small margins : Spread betting is a Bargaining product, which means that you don’t have to put up the full value of your position in order to trade. Bargain can make your investment capital go further, but if the market moves against you there’s a risk you can lose more than your deposit.
- You can short the market: In spread betting you are simply placing a bet in your desired direction where you have anticipated for profit you can take a view on falling markets as well as rising markets.
- Quick execution: Spread bet can be opened up almost instantly. About 99% of deals is executed over in 0.1 seconds or less. In maximum cases user just simply pick market, and the bet size and select the option to “Buy” or “Sell” then hit confirm to open position.
- The thousands of available markets: Spread bets are offered with a huge range of markets, including forex, indices, shares, commodities, interest rates, options, binaries and more, all from one account. As you never own the underlying instrument, this means you’re able to deal with markets that you couldn’t otherwise access, such as whole stock indices.
- 24-hour markets: Spread bets work on round-the-clock dealing on certain markets, meaning that you can open and close positions even if the underlying market is shut.
You can visit ETX Capital to know different features and formats for spread betting and trading
