Difference between Spread Betting and Fixed Odds
Fixed odds financial betting is essentially, betting on the belief that a particular financial instrument will take a turn in a particular direction from where it is right now. It is also wagering on the outcome such as the financial instrument reaching, touching or bouncing off at a certain point. In Financial spread betting, the wager is not only on the outcome but how accurate the wager is to the outcome of the financial instrument. But what sets Fixed odds financial betting apart is that the payout is fixed from the very start. It means that one knows exactly how much the gain will be or how much will be the potential loss.
In financial spread betting, one can sell back the bet before the expiry date. This means that even if the outcome isn’t favorable, one can sell it back before it can expire to make some profit out of it. This profit might even end being the exact same value as one hoped for at the start. This option does not exist when it comes to fixed odds financial betting. Also, in Fixed odds financial betting one states how much they want to win from the start and the betting company then estimates how much they have to bet in order to make those winnings in case of a favorable outcome. Thus Fixed odds financial betting is more flexible than financial spread betting in some areas and offers more control because of better odds.
In Financial spread betting, one bets on the direction the instrument will take. However, with fixed odds financial betting one can wager on exactly how further it goes in the direction that has been predicted. Spread betting companies offer a stop loss option which when taken, can protect from potential losses when it is seen that the instrument is moving towards an unfavorable outcome. However, sometimes a stop loss can be stopped in case of certain market movements and if one has the choice for a stop loss option, their entire bet could end.
However, this is not the case with fixed odds financial betting where the bet does not end and even if the instrument is moving towards an unfavorable outcome, chances are that it might rebound and then come back to the outcome that had been predicted and thus, result in a profitable position. With Fixed odds financial betting, one also knows exactly how much is at stake and is aware of the maximum liability.