Spread betting, although risky, is also a highly profitable business that can earn you a lot of money. Here is an introductory guide to spread betting and a view on how spread betting could earn you money! First, lets look at what spread betting actually is:
Spread betting is a type of betting where the pay-off from a wager is based on the accuracy rather than a “win or lose” outcome. Spread betting involves a range of outcomes and the bet is placed on whether the outcome will be above or below “the spread”
. Due to this, spread betting carries a high level of risk and potential losses or gains can be in far greater excess of the original money wagered.
Now we know what spread betting is, lets have a look at how it works. Heres a scenario that shows you the potential gains of spread betting based on sport:
For example, let
s say that you would wager on how many runs England would score in the first innings of the next test match. A spread betting firm (which can be considered for all purposes to be a bookie) may offer you 300-310 runs. If you believe the total will be less than that you can “buy” at 300 and choose a stake e.g. £1 a run. If England then went on to make 270 runs then you would be right by 30 runs and would make £30 profit from the wager! It is also worth pointing out that all spread betting gains are tax free just like betting at the bookies, so all winnings are yours!
However, as you can see, there are also pitfalls to spread betting and losses can be significant too. For example, if England had scored 330 runs you would have been wrong by 60 runs and would have lost £60. For this reason, all spread bets should always be researched and you should calculate your stake first. If you start low, however, such as 10p a stake then although profits will decrease, so will losses, and you can work out if spread betting is right for you.
If you believe spread betting is right for you but youre unsure how to invest then consult companies such as CMC Markets who can help provide you with the technology to support you bets and maximise your chances of profiting from spread betting.
Spread betting is a type of betting where the pay-off from a wager is based on the accuracy rather than a “win or lose” outcome. Spread betting involves a range of outcomes and the bet is placed on whether the outcome will be above or below “the spread”
. Due to this, spread betting carries a high level of risk and potential losses or gains can be in far greater excess of the original money wagered.
Now we know what spread betting is, lets have a look at how it works. Heres a scenario that shows you the potential gains of spread betting based on sport:
For example, let
s say that you would wager on how many runs England would score in the first innings of the next test match. A spread betting firm (which can be considered for all purposes to be a bookie) may offer you 300-310 runs. If you believe the total will be less than that you can “buy” at 300 and choose a stake e.g. £1 a run. If England then went on to make 270 runs then you would be right by 30 runs and would make £30 profit from the wager! It is also worth pointing out that all spread betting gains are tax free just like betting at the bookies, so all winnings are yours!
However, as you can see, there are also pitfalls to spread betting and losses can be significant too. For example, if England had scored 330 runs you would have been wrong by 60 runs and would have lost £60. For this reason, all spread bets should always be researched and you should calculate your stake first. If you start low, however, such as 10p a stake then although profits will decrease, so will losses, and you can work out if spread betting is right for you.
If you believe spread betting is right for you but youre unsure how to invest then consult companies such as CMC Markets who can help provide you with the technology to support you bets and maximise your chances of profiting from spread betting.