If you are a keen follower of the Forex Market, you might as well be able to associate the word spread betting. However, spread betting is quite different from other betting markets. For instance, the spread betting system popular in the UK is not the same as it is in the US.
So how was spread betting created?
In the US, bettors would analyze a potential on every upcoming “market change”, could be negative or positive. The real definition according to the US context is called ‘fixed odds’ in European markets. The format here is quite different from ‘fixed number’ system popular in the US. Betting on stocks by European traders had become a highly dynamic platform than the simple format using fixed numbers. It’s not really a case for semantics but more sophisticated platform. It is essential to remember that the spread is not placed around a fixed number but usually consists of two numbers; the second usually comes below the fixed number.
Spread betting in the worldwide market
Coming back to the Forex Market, when a particular share is favorably marked at 4, it becomes a fixed number. There is always a chance that this fixed number moves up or down by 1 or 2 points but will remain stationary as the game is about to start. If the number stays at minus 4, the bet for the same game in London will be 4 or 5. Betters can either but the favorite (lay minus 5) or can sell the dog (go for plus 3). At the end of the day, it is still the same as the good old sports betting and you should be ready with your homework.
The payouts with spread betting
In this form of financial trading, betters are essentially betting on the final outcome of a market change with two numbers. The payout will consequently be based on the wager accuracy. The money you lose or win will be based on how close you have been able to predict, compared to the predictions.
The calculations involved
It might get a bit confusing if you are starting with Forex spreads but as it is, betting, be it share trading or any other event, the idea is pretty sophisticated. In case you have bet on the favorite and secure a win by 10 points, the profits you earn is seven times the money you would have wagered. However, in case you lose, the losses will be 12 times the money you would have put initially. The idea is simple but the stakes are high!
The best betting platforms
For starters, it might take a good few months to get used to what spread betting is about and how the thing works. It is always good to have an expert service provider like ETX Capital by your side. Their website is quite stimulating for any better to follow, if you are particularly interested in Forex trading. Millions of bettors, even outside the US put their money in their stock market.
There are several books across the globe that will be able to help you with betting in conjunction with fixed odd betting sections.
It all depends upon the legality of the bets and varies according to regions. While favorable conditions would soon be available for betters worldwide, now is a perfectly good time to get acquainted. Spread betting is in fact far more stimulating and interesting than putting your money in the regular financial market, banks as we call them!