Free book - The Beginner's Guide to Financial Spread Betting
Michelle Baltazar is a former features writer and columnist for Shares magazine. Her guide is aimed at spread betting novices who are familiar with the stock market either through investments in equity funds or because they own shares. It explains in detail the ins-and-outs of financial spread betting, offering a wealth of real-life case studies along with plenty of hints and tips - you can get it free when you register with Tradindex using this link. It's a very simple introduction to spread betting but offers a decent overview.
I didn't quite win the Tradindex competition last week, but at least I got a free book (The Beginner's Guide to Financial Spread Betting) out of it. For your own copy click here.
It's not a great book, but its a good introduction to financial spread betting and you can always put it on eBay 
Favourite bits of the book
- In one of the case studies, the subject uses the 'when in trouble double' strategy. Classic!
- They tell of how a couple of guys turned £1,000 to £1,000,000 in 8 weeks during 2003. Sounds impressive, but with a large number of ballsy clients it's hardly unfeasible. Especially with the volatility that was present in 2003.
How to discover a client who can turn £1,000 into £1,000,000 in 10 weeks
Consider a group of 1,000 spread betters each depositing £1,000 at a fictional spread betting firm called Spreadfins.
Assume that the markets are volatile enough for at least one trade to be opened and closed each week. And that each of the 1,000 spread betters open and close 1 trade each week, for 10 weeks.
Assume a frictionless spread free market (this assumption gets more reasonable as the markets get more volatile), that each "trader" has a 50% chance of winning, and that the risk/reward ratio is 1:1.
i.e. if they bet £1, they have a 50% of winning £1, or a 50% of losing £1.
Assume that each trader bets their entire account on each bet. This will mean that they either double up or lose their whole account when the bet is close.
The chances for a trader to win one bet for each of the 10 weeks is 0.5 ^ 10 (a half to the power of 10), or 1 in 1,024. This means that we'd expect one of the 1,000 traders to turn their £1,000 into £1,024,000.
Add a bit of luck and more active trading (i.e.10 trades in 8 weeks), and it's not unexpected to find a trader to turn £1,000 to £1,000,000 in 8 weeks.
However, all the other traders who don't make it will lose their entire £1,000.