Financial Spread Betting

There are lots of different ways that you can trade in financial spread betting. There are four kinds of financial spread bets for you to consider. Before you start though you should way up each one and decide which suits your financial spread betting system and your personality.

The most common forms of financial spread betting are the daily bet and the rolling daily bets. Daily bets have been established for many years. The Rolling daily bets are a younger derivative.

Both work in a similar way with the difference being that the daily bet is setted and exited at the end of the day whereas the rolling daily will continue into the next day. You choose an asset, you go long or short at the entry price, you stake an amount per point and the overall profit or loss will be the point movement of the asset times the stake you made.

Lets look at an example. You decide to go long in XYZ plc. Their current price is 100. You stake £10 per point. At the end of the day they close at 103 which means that your profit is £30 (10 * (103 – 100)).

If this were a daily bet then your trade would now be over. It you were in a rolling daily trade then it would carry through into the next trading day. It is important to note that if the instrument had lost 3 points during the day then you would’ve been out of pocket by £30.

Another type of financial spread betting is the binary bet. The binary bet is a new type of financial spread bet which is becoming more popular. With binary betting you are either correct or you get it wrong. It doesn’t matter by how much. It works differently to the example we saw earlier in that the amount you win or lose is known before you enter the trade. So out of the bets we have seen so far the binary bet is the most simple.

The last market is the Futures market. The Futures market is quite well known so I won’t go into much detail. It is more complicated than what we have seen so far and it isn’t my preferred way of financial spread betting.