Spread bets allow the investor to profit significantly from a movement in the market price of an underlying financial instrument, such as a stock or commodity, without having to invest a lot of money. But of course just as spread betting account holders can cash in if the share price of the company rises, they are also liable for any losses. The downside could be devastating if the company takes a dive on the stockmarket, leaving the trader liable to pay a bigger loss than if they hadn’t borrowed money to invest.
For this reason you need to develop a trading plan which should include your entry price and where you intend to take profits or close out at a loss if the market goes against you. You need to make sure that you stick to your plan as otherwise your emotions might interfere with your trading.
Spread betting is a popular form of betting in which the gambler has to beat the odds provided by the spread betting company. Here are some spread betting tips which will help you through placing bets on spread betting.
Before you get started:
If you are betting on spreads online, make sure you choose a trustworthy place to bet. Some websites will offer spread betting services with tempting sign up bonuses and you will never see a dime in case you win. Make sure you choose a company which has a good reputation.
And now, on with the spread betting tips:
1. Spread your risks – When betting on spreads you have a 50-50 chance to win and lose a bet. If you choose several bets and spread your risks between them you can cover losses with bets won.
2. Use stop losses if you are betting on financial spreads – a stop loss will prevent you from losing more than you originally invested. Since financial spread betting uses leverage in the bet which is not bad, you can win big but also lose big. This is why always using the stop loss, you might not win as big as you wanted, but at least you won’t lose big.
3. Don’t attempt to bet on spreads and something you are not familiar with. It might seem attractive with odds provided by the spread betting company but in fact it’s very risky. Keep in mind that this is what they want you to do and they know you will lose.
4. Don’t believe everything you read – There are forums, websites and other resources who will offer you gambling and betting tips, website who will offer you the tip of the day, the pick of the day and sometimes even paid picks of the day / week / month / year. These tips are provided by regular persons who are making a dime every time you place a bet through their website. Keep in mind nobody wants you to win!
Spread betting of any kind, whether sports spread betting or financial spread betting is risky. Whenever you are placing a bet on spread there’s a good chance you will lose. Keep that in mind when ever placing a bet and be careful on what you bet on.