Want to know how to make money from financial spread betting? Then learn how this form of betting on the financial markets can be fun and profitable.
Financial spread betting is an easy way to make money from the global financial markets without having to get over involved in stocks and shares. Once you understand this form of betting then it can be a fun way to play the market.
This form of betting works using the financial markets. You can use any type of market you want from currency, to minerals and the main markets such as the FTSE 100, Dow Jones and CAC. It is best to choose the market you are most familiar with and have studied before. It is easier to explain this form of betting by way of example and for this article we are going to use the FTSE 100.
The Basics Of Financial Spread Betting
In this example we are going to be hypothetically betting on how the FTSE 100 could react on any given day. The first steps you have to take is to find out the “spread” on the FTSE 100 for that day. These days you will do this online with whichever firm you have decided to have an account with.
You go to their website and they will quote Visit this website the spread for the FTSE 100 for that particular days trading. In this example the spread is 6350-6500 (6500 to place a “buy” or “up” bet and 6350 for a “sell” or “down” bet).
What Do You Think Will Happen That Day?
Now this is where you have to put your money where your mouth is. If you believe the FTSE 100 will rise then you place a “buy” bet. You have to bet a certain amount per point. In this example we are going to bet $10 per point. This means every point the FTSE 100 goes up you make $10. If at the end of trading the FTSE 100 was at 6700 an increase of 200 points you would make $10 x 200 points which means $2,000 in your pocket.
That Sounds Good Right?
Now there is a downside and that is if the market were to fall by 200 points then you would lose $2,000 but of course you can bet for the FTSE 100 to fall.
What Happens If You Think The Market Will Fall
If you feel the market is going to fall then you would place a “down” bet. We will use $10 per point again. In this example if the FTSE 100 were to fall to 6200 that would be a fall of 150 points. This would create a profit for you of $10 x 150 points which means a profit of $1,500. If the market were to rise however to 6500 you would lose $1,500.
Easy As Pie
Financial spread betting is that easy; you are simply betting on whether the market will go up or down. There are ways to limit your losses to protect yourself if the market goes drastically in the opposite direction to how you have bet. This style of betting is an immediate and a quick way to trade on the global markets which is why so many people are choosing to make money from financial spread betting.