While the concept of spread betting is deceptively simple, experienced spread bettors will testify as to the difficulties and complexities of getting involved in the spread betting market, and the dangers that come with getting it wrong.

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Spread betting is a low-cost leveraged product allowing traders to benefit from rising and falling markets

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Spread betting is a low-cost leveraged product allowing traders to benefit from rising and falling markets

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Explore the power of spread betting on a wide range of markets with all its benefits and tax-free status

Spread betting comes with the lure of substantial returns, but natural market unpredictability makes it hard to consistently mitigate and overcome the risks of trading with such a high leverage ratio. As a result, many traders find themselves falling through the cracks, and ultimately trading unprofitably over time. However, with a consistent, logical approach to spread betting that covers all the bases and strategically focuses on generating a steady return on investment, it can be possible to profit from this most exhilarating of trading styles.

This spread betting for beginners guide is designed to help traders of all stages revisit the basics of spread betting: from what spread betting is and how it works through to practical advice and information on how to trade. Aimed at giving a comprehensive, no-nonsense overview of spread betting, traders can both consolidate existing knowledge and learn more about the fundamentals of successful trading, to help eliminate common mistakes and maximise the profit potential of the spread betting medium.

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Wide Range of Markets
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Go Long or Go Short
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Leverage

While we can’t guarantee you’ll be successful, we can promise you’ll find everything you need to know to develop and execute a successful and profitable spread betting strategy, and it’s worthwhile working section by section to ensure you’ve covered as much ground as possible before investing for real.

While there’s no substitute for experience, taking the time now to learn the fundamental theory underpinning spread betting will undoubtedly stand you in good stead, and improve your chances of building a successful trading portfolio.

Who Can Spread Bet?

Spread betting is perhaps most closely associated with individual traders, and with those looking to manage their own assets to generate a better return. As an individual trader, the options for returns from more secure types of investment such as bank deposits and share dealing have plummeted, as a result of tighter financial and economic conditions. This has led to savings rates of just a couple of percent, and in any event covering the impact of inflation on savings and investments has become increasingly more difficult.

With spread betting, individual investors are finding they are able to generate a far more significant return, albeit at a greater risk than many alternative investment styles. Even managing a yield of 10% over the course of a year is sufficient to provide a market-beating rate of return, and with the hefty leverage portions built in to spread betting transactions, this is a more than achievable goal.

Aside from private individuals, spread betting is also becoming a more important tool for trading funds, as a means of delivering an additional degree of flexibility to their portfolios and allowing for cost-effective returns on client investment. While the risks of spread betting resign it to being a marginal player in the world of professional investment, it is nevertheless present as part of diversified portfolio management, and it is becoming an increasingly widely used aspect of the investment industry.

Why Choose Spread Betting?

Private individuals and investment funds trade spread betting for slightly different reasons, but they are united in their interest in highly leveraged returns. While for some funds, justifying the risks of spread betting en-masse would prove a difficult task, they are able to utilize the high, cost-effect leverage afforded by spread betting in order to generate greater returns over shorter periods of time. With other investment types proving increasingly difficult to squeeze a yield, and the need for enhanced flexibility to hedge positions and guard against unexpected market turns, spread betting is proving to be an increasingly worthwhile tool for professional investors.

Why Spread Bet?

Smaller, individual investors are also turning to spread betting in full appreciation of the risks and difficulties it poses, simply because it offers the opportunity to make their money work harder. Instead of accepting small incremental gains over weeks or even months, investors are now demanding instant profits and high, inherent leverage which can save on financing costs and deliver an unbeatable return over a much shorter time span. Regardless of which camp you find yourself in, and the precise reasons you’re interested in spread betting as opposed to other financial trading methods, rest assured that you are in good company, with a growing body of private and organizational investors seizing the opportunities spread betting can provide.