If you’ve spent any time around financial blogs on the internet, you’ve no doubt came across the term “spread betting”. Spread betting will be very familiar to some of you, but others of you are no doubt completely in the dark. What is this strange phrase? Is it some kind of scam? Can users really create strong secondary income streams through spread betting? The answers to all this and more will follow, so here are the top 4 things to understand about spread betting before trying it out for yourself.
- Spread Betting Isn’t Gambling. Just because “betting” is in the title doesn’t mean that spread betting is gambling. The best spread bettors in the world have their success because they know a great deal about markets and assets. That’s why they are able to predict their future values with great precision on spread betting marketplaces like ETX Capital. Spread betting success is all about making educated guesses about how value is going to fluctuate in the near future. All of these speculations will be based on real insights about how the financial world works. In reality, it’s no different than traditional stock investment, where investors buy based upon what they think is going to happen.
- Spread Betting Doesn’t Require Expensive Ownership For Great Returns. This is perhaps the most interesting aspect of spread betting to people who learn about it for the first time. With spread betting, the investor never truly owns Ownership happens in equities markets. When you spend $1000 and buy a share of Amazon, you literally own a tiny fragment of that massive company. With spread betting you’ll be able to make bets on the future value of Amazon, but you’ll never actually own the stock. This allows users to enter into the spread betting markets with much less startup capital than they would have to have if they were to buy the same stocks.
- Spread Betting is About More Than Stocks. Up till now we’ve only talked about spread betting as it pertains to trying to anticipate the future values of stocks. But because spread betting is all about trying to anticipate value, you can do it with just about anything that has value which is trackable minute to minute. We’re talking about markets, indices, bonds, commodities, currencies, and more. So even if you don’t have a great deal of knowledge about the stock world, but you do know something about why the United States Dollar changes in value relative to other currencies, you can exploit that knowledge for reliable gains without ever having to think about the stock market.
- You Can Start With a Free, Riskless Trial Account. The scariest part of starting any new investment method is the chance of losing money. When we begin a new activity with the complexity of investment, there are many ways to mess up. This is true of spread betting too, and because the contracts involved can be so short in duration (measured in hours and minutes sometimes), money that’s lost can be lost very quickly. Fortunately, the platforms that make this investment form happen understand that new users have a lot of risk, so they make free trial accounts available to them. These accounts can be used to make real bets, but without any financial risk. You can see how your bets will play out in the real world, how much money you would make or lose in a real trade, and prepare to do the real thing when you’re ready.
As you can see, spread betting is a complex and interesting way to invest and make money. It’s accessible and fascinating, something that more people are trying everyday. Try a free trial account to see if it’s for you.