Financial Spread Betting News Information Tips

S. Byron Brown asked:




Sports Betting Spread, also know as “Spread betting”, “point spread” or “line”, is the most common type of bet and involves betting based on the difference in the points scored by two individuals or two teams in a sporting event. The winner is determined by comparing the point difference between the two individuals or teams and the points assigned by a sportsbook.

Let’s look at the following example where Team A is the underdog by 6.5 points which makes Team B the favorite by 6.5 points.

Spread/Line:

Team A (+6.5)

Team B (-6.5)

If you were to bet on Team B to win, the difference in the final score will need to be 7 or more in order for you to win.

Final Score:

Team a – 30

Team B – 37

In looking at the final score above you would win your bet! On the other hand, if the final score were to be 36 to 30. You would lose your bet!

Spreads are frequently created in half-point increments to avoid ties. Yet, there are instances where a tie will occur, which is called a push. A push is not favorable by the sportsbooks because there would be no winner declared and the sportsbook would have to refund the money wagered on the sporting event. However, Sportsbooks are permitted to “hedge their position” by stating that a push is a win or a push is a loss. In this case the sportsbook would not have to refund any money.

In conclusion, Sports Betting Spread is the simplest form of betting and will continue to be the most popular method of making money while betting on sports for some time to come.

Elsie

Sergey Trishchev asked:




In this, the bet is on whether the outcome will be above or below a particular spread. Before we talk about the differences, it is important to have a look at the similarities:

1. In case of spread betting and CFD, stamp duty is not required. Both ways of investment are free from stamp duty.
2. Another similarity between spread betting and CFD Trading is that in both the cases, the trader does not buy the shares he has been trading for. As the trader is not buying any assets, he does not hold any voting rights.
3. Last similarity is that in both the cases, the trader can earn in a situation when market is falling as well. This means, that in both the cases, trader has double chances to win. One, when market is rising and two, even when market is falling.

Looking at the above mentioned similarities, few people might get confused between the two terms. However, let us look at the points of difference between the two:

1. In case of spread betting, the trader enjoys commission free betting. However, CFD trading is not commission free.
2. Contract for Difference Traders get dividend wherever relevant. However, spread traders do not get any kind of dividend.
3. Spread bets are based on fixed ownership however CFD Traders get flexibility in this case.
4. Spread betting is exempt from Income Tax; however earnings from CFD Trading are not income tax free.

CFD Trading is currently available in United Kingdom, Netherlands, Germany, Switzerland, Italy, Singapore, South Africa, Australia, Canada, New Zealand, Sweden, France, Ireland, Japan and Spain. Hong Kong has plans to start this trade as well. Spread betting is more popular in United Kingdom only. Looking at the above mentioned similarities and differences, it is clear that to distinguish between spread betting and CFD Trading; a person should have clear knowledge about both the terms. Both of them involve risk. A lot of young and new investors initially opt for spread betting. With experience and market knowledge people can earn fortunes through CFD Trading as well. There is no fixed time duration for this type of Trading. The client can call it off, when he thinks he has earned enough profits from it. A client can also call it off if he has lost lot of money and does not want to continue with it. With so much of flexibility and convenience involved, no doubt that Contract for Difference has earned place in investor’s hearts. Both of them are good sources of extra money for few and for the rest main sores of income.

Troy

Jack asked:




The list of financial spread betting companies around is quite long. Some of the established and reputable spread betting companies around are IG Index, Capital Spreads, City index, CMC Markets, Cantor Index and Financial Spreads.

Each individual has his or her own preferences when it comes to choosing a spread betting company. However, there are several factors for everyone to consider when you are choosing a spread betting providers.

Stability and Regulation

For me this is the most important factor. We have to ensure that the company we are dealing with is reliable and offer a stable trading platform. Make sure the company are authorised and regulated by the FSA (Financial Service Authority).

Range of Market, Narrow Spread & General Functionality

Even though, most spread betting companies offer wide range of market such as individual equities and stock indices, foreign exchange, bonds, commodities and interest rates, you will still have to ensure that the company provide the spread services that you required.

Stop Loss

Activating the Stop Loss is a feature which will limit your risk. This is very important during volatile market situation, when the market movement is against you and your bet will be closed once the market hits your stop loss level. Read the rules of each spread betting companies thoroughly as each firms have different rules for Stop Loss facility.

New Account Offers

There are new account offers for most spread betting companies. However, these offers are subject to term and conditions of each individual company. Different company will have their own promotion mechanisms and rewards based on the deposited amount.

Every financial spread betting company has its own advantages and disadvanrages. The choices are based own individual preferences. Choose the most suitable company based on your preferences and you can always change if you are not satisfied with their services.



Lauren

Stephen Edge asked:




Contract for Difference (CFD) is a financial instrument that has been gaining popularity in Asia over the last few years. Conceived in the early 80′s and termed an ‘equity swap’, CFDs are an agreement between the buyer and the seller that the seller will pay the buyer any difference between the value of the asset at the time of entering into the contract and the value at the end of the contract. (Or receive money if the difference is negative.) This may sound misleading when in fact the CFDs are marked to market every day and they don’t have a fixed expiration like an option.

There is no time value or volatility premium in a CFD. It is simply a one for one equity swap. You don’t deliver the underlying and like any share is only settled in cash when you are ready to flatten your position. Also, like the equity swap the CFDs are OTC which means the contracts can be tailored to an individuals needs and they also avoid the exchange fees too. Of course, selling may be difficult if you can’t find a seller for your custom CFD.

If you can’t price a CFD like an option or deliver (or receive) the underlying instrument the CFD is based on what’s the point of trading CFDs? One of the strengths of CFD trading is that you can trade on margin (why it has gained popularity with retail investors) and use very little money to get started. Singapore Exchange allows 1:20 gearing for example.

One of the other advantages to investors is the ability to enjoy downward moving markets emulating a short position. Of course, they aren’t actually short as there has been nothing borrowed. The brokerage community likes the prospects of the CFD business. They earn commission from trades, financing charges are paid to them and due to the daily marking to market default risk is minimized.

In fact, CFDs are so popular amongst the brokerage community that the Australian Stock Exchange is getting into the game by listing exchange traded CFDs. Further diversifying their product offering and earning the exchange fee for each trade too. The launch date for ASX CFDs has yet to be determined but is widely expected to begin November 2007.

As I mentioned before CFDs are marginable. With all margin trading there are two types of margin; variable and initial margin. Here’s an example. Variable margin is commonly set at a specific percentage with stocks however with CFDs and marking-to-market a fixed percentage is not necessary.

For example, if a CFD trader bought 100 shares of DBS Holdings using CFDs at S$100 and the price moved down to S$90 the broker would decrease the account by S$1000 in variable margin (100 shares x S$10). Of course conversely, if the share price moved up to S$110 the broker would credit the CFD traders account by S$1000 in positive variable margin. Generally, at the end of the day but are able to increase this without notice to intra-day if markets are volatile.

Initial margin on the other hand is always debited from a client account up front and credited after the trade is flattened. In this case the buyer would have only had to put up 5% of S$100 x 100 or S$500 and borrow the remaining S$9500. You can see why the brokerage community is happy to finance AND earn a commission on these products too. Again citing the sample above if DBS rose S$10 and the customer sold they would earn S$1000 (S$11,000 – S$10,000) from a S$500 investment or 200%. Minus, of course, brokerage and financing. Not bad for your average punter.

Who knows maybe this product will be over exploited and cause a global financial crisis too.

Franklin

Alexander Willington asked:




As an investor, it is necessary to know on what financial tool you will normally gain profit. Also, it is advantageous to know what trading activity you will fit and where you will succeed. There are many financial investments that are being adopted by many aspired investors. However, some of which are extremely difficult to understand and the market is difficult to penetrate, some are even imposed with exceedingly high taxes making the investors gain headache instead of profit. However, one tool that goes away with complicated rules, policies as well as high taxes is spread betting.

This tool is concerned with speculating on the value of a market, commodities, stocks, currencies and many others whether their prices will increase or decrease. It does not involve purchasing the wagered item but only wagering on their movement in the market. The payoffs are determined by the stake placed multiplied by each point from which the market had moved.

Many investors nationwide have been attracted as many spread betting companies are operating in the market. With this, it is essential to know where you will be more productive and reliable to open your accounts. Success on this type of trading would not just depend on the movement of the market, but also on how excellent and good your chosen company.

Some of the spread betting accounts you can choose from are IG Index, ETX Capital, Capital Spreads, ProSpreads, Spread Co and World Spreads. It is beneficial to know about this basic information for you to evaluate and access each of these accounts offered.

IG Index had started operating since 1974. IG Index offers the widest selection of products, class leading customer support and award winning technology.

One of the spread betting accounts is the ETX Capital. The company offers CFDs and Spread bets on different markets, which cover most of the world’s foremost indices, commodities, equities, options and FX markets. The company also offers educational webinars, free advanced charting packages and seminars. A new program of the company allows traders to participate to the global market with low-bet levels of 50 pence per point to a maximum of £500 each point.

Spread Co offers spread trading, CFD as well as Forex trading activity on the market. The company’s program is tight spreads, but it ensures easy access trading platforms and promising margin rates.

Working like a Direct Market Access broker, ProSpreads are very attractive to serious traders. It based its spreads on the underlying price in the market which prohibiting re-quoted and moving prices well away from the prevailing price in the market.

This is a promising venture that can be participated by those who are experienced and amateur in the trading business. It is just significant to note that before venturing in any activity like this, you should be able to analyze the potential benefits and consequences of participating. Opening spread betting accounts entails risk since winning or losing is inevitable thus would require that you assess and evaluate everything first.

Laurie

Tank Tan asked:




Most gamblers would use a type of betting system that would be profitable to them. A betting system that is based more on accuracy rather than sheer luck. Since that type of betting would be more profitable, they also tend to bet more money rather than winning from a mediocre bet. That is why through the use of spread betting, various gamblers would win more and they would really get their money’s worth. They can also base all their bets through their logic and experience in various sports, hence they would certainly win more.

This type of betting is actually based on experience and knowledge of the sport. Since most gamblers are also fans of a certain player, a team or a kind of sport they have a better chance in winning. This type betting is based on score brackets. Unlike the traditional type of betting, spread betting is based more on the score. Since most players are often the ones who would watch every game in every season, they are capable in declaring the score and the winning of each game. The past experiences in watching and observing different games would be your foothold in winning this type of betting. Since you are a fan and you already know what score they would have, then you can be on your way in acquiring millions.

Through spread betting more players are winning in their bets. Most of the players in this kind of betting are hardcore fans of a specific sport therefore they have the bigger chances of winning. You do not need to gamble in every bets that you would have because just as long as you are a fan and you have are accurate in declaring the score of every game, you can win.

Jacob

Getdealing asked:




TRADING RULES

 

Here are some rules of trading that if followed should help you make money or as a    minimum should stop you losing too much too quickly.

 

1. ALWAYS USE A STOP LOSS.

A “stop loss” trade is one that is made in order to set a limit to the loss made by

an adverse price movement.

A stop loss is an order entered into the market that is triggered if the market hits a certain price.

Work out how much money you are prepared to risk on a trade and enter the stop loss so that if it is triggered you will lose that amount of money.

 

2. DON’T OVER TRADE

It is tempting to get carried away and try to trade on every little movement the market makes.

Wait until you have high conviction and a REASON for putting the trade on. Good opportunities will present themselves to you in time so don’t just guess and trade too frequently as you will lose your capital.

 

3. ONLY TRADE WITH CAPITAL YOU CAN AFFORD TO LOSE.

If the money you are using to trade is going to affect your life and wellbeing if lost you will not be able to think clearly and subjectively and will make poor decisions that will lead you to losses.

 

4. RUN YOUR PROFITS NOT YOUR LOSSES

While watching the market as a new trader it is very easy to come to the conclusion that if you hold your position for a long enough period of time it will eventually make a profit. This will lead you to hold onto a losing position for far too long in the belief that it will eventually turn around. You may get away with this strategy once, twice… even 10 times in a row but eventually it will lead you to ruin.

It is equally important to give your profits time and allow them to run. It is tempting for a new trader to close each position as soon as you see any kind of profit. One reason 85% of new spread betters lose their money is they are fooled into taking lots of small profits quickly and allowing 1 loss to continue until the account is wiped out. CUT THOSE LOSSES RUN THOSE PROFITS!

 

5. HOLD YOUR CONVICTIONS LIGHTLY.

Often the markets will make no sense and will not react to news and data in any kind of logical way

For example news that could be considered good for the economy and should have a positive impact on a particular market could do the opposite for no apparent reason, as John Maynard Keynes said “The market can remain irrational longer than you can remain solvent.” – So you must be nimble and ready to cut losses even if you think “the market” has got it wrong… You should have a pre-determined amount of money you were prepared to risk that if arrived at will make you exit the market regardless of your views.

 

6. DONT TRADE TOO BIG

Spread betting companies will offer you huge leverage so it is up to you to keep your bet size (stake) limited to a size that you feel comfortable with. If you can’t sleep at night because you are worried about your spread betting position you are trading too big and must reduce your stake size. Your stake size should be in proportion to the total funds you have available to spread bet with, ideally so if you lose on any one trade you will lose no more than about 10% of the account size.

 

7. KEEP YOUR EMOTIONS UNDER CONTROL

 

Do not trade if you are angry, depressed or desperate as you will lose the ability to make rational objective decisions.

It is perfectly natural when spread betting to feel excited when you are making money and anxious when you are losing it but you must recognise if these emotions become extreme and stop trading immediately.

 

8. TAKE WINNINGS OUT OF YOUR ACCOUNT FROM TIME TO TIME.

The reason there are so many health warnings about spread betting is the fact that you can lose money REALLY quickly and can possibly lose more than you have deposited in the account. There is every possibility that at some point you will wipe out ALL the funds in your account so to make sure you actually profit from spread betting over the long term you must periodically withdraw some of your winnings. Set yourself a target and once you have reached that amount withdraw it and treat yourself.



Theresa

David Forey asked:




Among the many online financial firms you can find, some are just better than the others, some are more recommended by the spreads betting users and some are just bad. When you are trying to search for the best spread betting firm for you, remember it’s not always the same spread firm like other is using. One user is looking for the specific fixtures in the betting firm he is using, it’s not the most important fixtures that you may look for.

The different firms on the internet are looking for you to join them, you can find them all listed on the Spread Betting Portal. The main reason for that is that they want you to place your bets on their spreads and not with some other spread firm. You are betting on spreads for money and they want you do spend your money with them. If you are losing your money or winning more money online with good bets, it doesn’t matter, the name of the game is to make you bet with them.

The run on the internet will get you, if you are a potential user for the firms. You will get some ads in your Email, get into the affiliate websites and blogs, read about it in the upcoming RSS feed or SMS note and see about it in your Twitter. The industry is looking for you and it will find you.

So if you are looking to join the spread betting world, it’s time for you to make the search and locate your favorite firm, open an account and start betting.

Alvin

Rayner Chandler asked:




A provisional action taken in relation to indices shares currencies and commodities such as wheat oil and gold is the entire gamut of financial spread betting. It is only financial spread betting that gives the biggest boon of profits not possible in any other type of trade. This is also a kind of speculative activity similar to the gambling and hence the returns from this are tax free.

Financial spread betting provides other advantages when applied in trading of stocks, indices, foreign currencies and commodities. For one, there are not any dealing costs concerned in the activity as the book maker make commissions from quoted spread which makes a great hit.

The upshot of the financial spread betting is by and large unstable and instant. There is a great extent of flexibility to the traders in the positions that they can take as they are not required to have anything to do with the financial instruments. An open trade requires you to invest the complete amount and this is not the case in here as you can get a position for only a part of the speculation without having worry about the movement of the market.

When there is a paradigm change in the position of long on the costs you have taken you will make a benefit. You will be on a negative financially when you take the long position which has taken a bounce. With the financial spread betting, you can gain immediate access and make position on shifts in prices of different financial markets in US, Europe and Far East.

Before you employ in financial spread betting, it is necessary that you completely know the potential advantages and dangers that are concerned in such extremely speculative monetary activity. Most of the monetary professionals opine that spread betting is a subordinate investment alternative. This denotes that you are just needed to deposit a least percentage of total value of your fiscal position. The proportion of output you will have in a traditional investment option will be much lesser as the you have to shell out the entire amount to take the position. It is required for you to have a cushioning of a minimum of 10% 20% of the total value of capital invested. You have to make certain that you completely recognize the insinuation of whatever position you decide to make.



Dora