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It’s really very easy to understand the way in which spreadbetting works and while it can be high risk, it can also be high profit too. Although there is no infallible system, if you do plenty of research before staking your money then you should reduce the chances of any heavy losses.

Spread betting first came to the public’s attention around fifteen years ago as an innovative way to add excitement to a whole range of sports bets. The new style of gambling was quickly associated with markets such as football, golf, cricket along with many others and it proved to be instantly popular.

Around the same time, the internet was starting to grow considerably and the birth of online gambling made spread betting even more popular and in time, the practice was extended to include the financial markets too.

Whichever market you’re looking to enter into, the practice of spread betting is best explained by using an example. Let’s say you’re looking to bet on the fluctuations in the FTSE 100 Share Index on any given day.
In the first instance you would phone the betting company or go online to see where they have set the spread and for this example it has been set between 6200 and 6500 points. If you believe that the market will exceed 6500 then you place an ‘up’ or a ‘buy’ bet. If, however, you feel that it will fall below the 6200 lower limit then you place a ‘sell’ or a ‘down’ bet. The difference in naming these bets will vary depending on the company you use but essentially they mean the same thing.

Having made your prediction you now have to decide on your stake and for the purposes of this example, you have staked £2.00 per point on an ‘up’ bet, believing that the market will exceed the upper spread limit of 6500 points.
If, at the end of the day’s trading, the market finishes at 6600 points then it has concluded at 100 points higher than the upper limit set by the trader. You therefore win and collect 100 x your £2.00 stake, meaning that you walk home with a profit of £200.00.
In contrast, if the market has finished at 6100, then your bet loses and the trader deducts a loss of £200.00 from your account. Finally, if the market finishes between the spread betting parameters of 6200 and 6500 then you have neither won nor lost and your stake is returned.

You can multiply your stake as much as you like but as you can see, there are possibilities to attract huge profits but you can endure big losses as well. Spread betting certainly isn’t for the faint hearted and that’s why professional gamblers who get involved with it will do all their research rather than going with a ‘hunch’ as they may do with more traditional forms of betting.
By copying their actions, you too can enjoy spread betting on the financial and the sporting markets while reducing your exposure to a minimum.