Financial Spreadbetting – The Perfect Way to Profit from Rising and Falling Markets

Although different from traditional forms of investing, many investors and traders are using spread betting in order to consistently make profits. Due to the fluctuating economy, many investments have struggled to perform as forecasted and some have failed to make a profit at all. In order for traditional investments to create profits, they generally rely on the prices of share or commodities rising. However, the recent economic crisis saw markets plummeting causing investors to lose significant amounts of money. Rather than relying on booming economies, spread betting in financial markets enables investors to profit regardless of whether they are rising or falling.

spreadbetting

This unique method of betting means that investors are not simply reliant on market performance in order to make a profit, they must merely predict the way in which the market will change. For example, many traders use spread betting to bet on the value of commodities. The spread betting company will set a margin or ‘spread’ either side of the actual price. Traders can then choose to bet on whether the market will rise or fall. If their predictions are accurate and the level exceeds the spread they will make a profit. The tighter the spread, the more chance there is of a trader making profit as the price will only have to change slightly in order for them to benefit. For example, if the price of a commodity is 1170, the spread may be 1168-1172, if a trader accurately predicts the price will rise, they will profit for every point the price rises above 1172.

With spread betting the profit a trader makes depends on the amount of risk they are willing to bear. Traders are free to state the how much they wish to bet per point thus limiting their potential losses. Using the above example, if the trader stops the bet once the commodity price has reached 1175 they would have benefited by 3 points. If they had bet £1 per point they would be £3 in profit but if they had bet £1000 per point they would have £3000 worth of profit from one bet. Many spread betting companies set low minimum bets enabling traders to bet with an amount they are comfortable with. Although spread betting enables trader to make large profits, losses can be considerable so traders are advised to bet accordingly. However, if traders predict an outcome wrongly they are free to stop the bet thus limiting the damage and capping their loss.

Many spreadbetting companies offer demo accounts for new traders and a number of resources which enable traders to familiarize themselves with the trading platform prior to trading on the markets. Spread betting companies also offer a range of tools for new and experienced traders to track patterns and trends in order to increase their chances of betting successfully. By conducting research into the markets, taking part in tutorials and learning about the trading platform, traders can increase their chances of success and make considerable profits from spread betting.

Spreadex are UK leaders in financial spreadbetting online. Simply visit their website www.spreadex.com to find out more and get started.

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