Spread Betting

Spread betting is a betting and trading with financial instruments.

Process

It was invented in the UK and has been enforced there as one of the most traded financial products for private clients. In German-speaking countries spread betting is offered as an e - spreads since 2010. This refers to the actions of financial instruments with more or less strong lever, without the financials to keep actually. Only the rate differences It traded. The return that the spread betting provider generated from the difference (spread) between the buying and selling price. The trader is simply a sum of money, for example, 10 - Euro at the exchange rate change on a security. If he has set on rising prices, so "long" and the price goes up 10 points, for example, then a profit in the amount of 100 was - Euro (10x10 ) achieved. The same also works in the other direction - ie the "short" go when prices fall. Thus can be achieved in both rising and falling prices on the financial gains. These are higher than traditional stock exchange transactions due to the lever. However, this possible loss is greater. Due to the trade of exchange rate differences without holding the securities, spread betting is one of the so-called contracts for differences. In this group there are also CFDs, which are however rather used by institutional investors.

Benefits

The advantages of spread betting are:

• High transparency
• Profit potential in rising and falling markets
• Low cost
• No currency translation risk