|
Beginners Guide to Spread Betting New to Spread Betting? The Spread Betting Trading Centre has compiled the following guide
to explain how Spread Betting works What Is the Spread? The spread is the difference between the buying price and selling price quoted by the Spread Betting company. For example, if a share is quoted at a buying price of 340 points/pence and a selling price of 350 points/pence, the spread is 10 points/pence. When placing a spread bet, the better will wager an amount that they will pay/earn for every point change in the value of the stock. This will be demonstrated with examples later in the guide. Each spread bet is tax-free and is run for a fixed period, but the trader can choose to close the bet early within the time limits if it proves beneficial for him to do so. Equally, the trader can close the bet to cut his losses if the market has gone against him. When the closing date arrives, the trader either has to close the bet or pay to roll the bet over. Finally, in order to save traders from having to continuously watch the market, traders may also arrange a “stop loss” function into their bet. This will allow them to close their bet once the bet has gone too far in the wrong direction. This strategy is essential in limiting the amount of risk that a trader is taking on when making a spread bet. |
|
|
|
