First of all we can get an understanding about what is "spread". The spread is where the spread betting firm make their money, we will talk more about this later. But now spread is simply the difference between the purchase price and selling price.
Spread example would be: Buying price 59 and a selling price of 57
This is know point 2 59-spread 57 = 2
Now with this scenario as example suppose you think the market will grow at a high 65 price points. You can place an order buy with the spread betting company in 59 points, betting 1 per point.
Now with a bit-of-luck, the market rises (better known as concentrations) 65 points to close your position. Your profit on the trade is your bet (1), multiplied by the number of points in the market grew. (65-59 = 6)
1 x 6 = 6 profit which is tax free now in United Kingdom
Suppose the market goes in the opposite direction you hope for. As before you from stock 59 points to the 57 sell to.
Buy the stock at 1 per point, but this time the market moves down in price and sell your inventory to 50 points.
This will give you a loss of 9 (59-50 = 9 × 1)
As mentioned previously, the spread betting firm needs to make some money as well, this is when it comes to spread. On the market can offer 57 points, but the company will offer you sell the stock at a badge by 59 rendering points effectively 2 in the process if your bet was 1 per point.
This is why it is important to use spread betting comparison sites to help you find what is known as tighter spreads. As you can provide some providers spreads a low as 0.5 with big bets can save you lots of cash while the trading.
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