Sometimes the fine line between investing and betting is usually blurred which arguably led to many disputes by several experts in the financial industry. However in Britain, investing and gambling is undoubtedly regarded as almost the exact same thing. Several global companies such as the IG Group Holdings are practicing a method called spread betting which let speculators and clients alike make arrangements without really purchasing and selling actual securities such as treasury stocks, bonds, debentures, investment contracts and so on.
The practice of spread betting in actuality is evocative of stock exchange businesses or popularly coined as bucket shops that exponentially grew in the United States in the later part of the nineteenth century all the way to the early twentieth century. The said setting for registration of smaller bets catered investors who couldn’t meet the expense of stockbrokers which by the 1920’s were almost entirely banned in majority of the states. Spread betting was only successfully integrated in the financial industry by 1970 by a successful banker named Stuart Wheeler who used gold as his primary gamble wage in his new-found system. Later on Wheeler founded the Investors Gold Index which at present is known as the IG Group, one of Britain’s largest and most successful spread-betting firms. It was however after the advent of the internet that spread betting really soared to its highest potential.
An estimated 100,000 English speculators are into active spread betting last year as compared with only approximately 90,000 in 2010 as noted by the Sydney-based research firm investment trends. Proceeds from spread betting astonishingly reached over $1.4 billion last year according to data compiled by Bloomberg. With the rickety pillars of spread betting at present due to the unfortunate collapse of several small spread betting companies, WorldSpreads Group have considered putting up new contingency efforts to minimize the risks of betting in the market. However, WorldSpreads is currently under query by the Financial Services Authority, the United Kingdom’s securities regulator for the £13 million shortfall in client funds still unaccounted for in the wake of the October downfall. The policing securities regulator have made plans to increase visibility of spread betting companies in order to avert the demise of WorldSpreads wherein 15,000 customers are fearing a loss of their investments.