A: In normal fixed odds betting, you take a view on a horse race or a football game and look for a win or lose situation. However, in financial spread betting, there is no finishing line. You are not looking for a final result at the end of the race. Instead, you are making a prediction about where prices will be in a single moment in time; spread betting is a way of backing your view on where the financial markets are going. With spread betting, the more right you are, the more you can win but the more wrong you are, the more you can lose - and your loss could be substantial if you don't use stop loss orders (covered later).
A: A derivative product derives its value from its underlying asset. The underlying asset can be a share, an index, a currency pair, commodity or indeed any other asset. Spread betting like CFDs are a form of a derivative product meaning that you do not own any of the shares you are trading but are simply trading on the direction of the share price. For every point the market moves in your direction you win multiples of your stake (the opposite is also true: for every point the market moves against you lose multiples of your stake!). Since you don't own the underlying asset but are betting on price movements you can profit from falling prices by taking a DOWN bet.
Spread Betting is a tax-free alternative to trading shares and financial markets. You are essentially betting on the performance of a share, index or commodity. You don't own the share itself, you merely use it as an underlying instrument for your betting.
A: Some financial historians trace the origins of spread betting back to the United States and the unregulated 'bucket shops' in the early part of the twentieth century. However, it is now widely accepted that it wasn't until 1974, when entrepreneur Stuart Wheeler came up with the idea to give investors the opportunity to speculate on movements in the price of gold - whether up or down - that spread betting as we know it today was born.
A: Financial Spread Betting has been around just over 40 years and it has steadily increased in popularity over the last 10 years. Industry derivatives research shows that the average investor is now much more sophisticated and knowledgeable about financial matters than they were 10 years back. During this time there has been a growing awareness of the advantages that spread betting has to offer over traditional trading on the financial markets. A decade ago you would have needed a minimum of £5000 to open an account, however today spread betting is a much more mainstream product and there are fewer restrictions; presently anyone can open an account (you can open one with just £100 if you wanted to!).
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