Financial Spread Betting (page 2 of 9)

Spread Betting Introduction

Spread betting allows you to speculate on the outcome of various events, such as financial markets or sporting events. A 'spread' is quoted, such as 5500-5510 for the FTSE 100 index. If you decide that the index will go higher than 5510 you can place a bet that the index will rise, or you may decide to gamble it will fall below 5500.

In the previous example you may decide to bet the index will rise and gamble £1 per point. This means that every point above the higher number in the quoted spread (5510) will earn you £1 and every point below it will lose you £1. So if the index rises to 5600 and you decide to close you bet you will make £90 (i.e. 5600 minus 5510 multiplied by your £1 spread bet). Conversely, if the index drops to 5400 and you decide to close your bet before losing more money you would lose £110 (i.e. 5510 minus 5400 multiplied by your £1 spread bet).

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