Financial spread betting is a method used in the economic arena to take a guess about how the market for trading stocks, bonds and other commodities and try to make money. It is similar to spread betting in sport, but works a bit differently in this place.
Definition and purpose
Financial spread betting is meant to develop active market betting on both sides of an event, such as whether a stock will go to the top or bottom values. Supposedly it is still betting on both sides and the bookmaker can be moved but wants to spread this to happen. Long keeps things even on both sides, will make money from Commission fee he charges and winning or losing does not affect earnings. Even so, he must repay winners less than this Committee or it will lose money.
Unlimited bets
Spread betting is more dangerous than fixed odds because there is no a single stake limit your loss or potential gain your profit. You may, however, to negotiate the bookmaker if market shares falling by using spread betting can be an instrument to compensate for possible losses on shares and bonds in your portfolio.
Spread betting conditions
"Stop-loss" closes your bet, if spread select edges against your bed by an agreed upon amount. "Stop-loss" or "take profit" will also close the bet if the spread is the opposite and in your favor goes after a certain amount.
Ownership of stocks is not necessarily
In order to participate in the economic bet, you don't even own what you bet on. All you have to do is make a guess as to whether it will go up or down and bet accordingly. Then, you have been admitted to official listing on two values, a tender and a price quote or spread. Choose whether or not the price goes up or down and win or lose proportionately. Here is an example of fast;
If you spread betting in stock and the bookmaker give a quote bid of $ 200 and an offer of $ 203 and you think the stock will sell for less than $ 200 if I betted $ 2 for every dollar invested in the $ 200 will win $ 20 if stocks decreased at a price of $ 190
Addictive
Just like any sort of gambling, this type of gambling can be addictive if you aren't careful. In fact, studies have shown that this type of betting can be much more addictive than regular straight chances better, there are quite many who gambles that this kind of problems in the past year developing serious gambling, while only 1 percent of those who chose makes straight betting became addicted.
Conclusion
This kind of betting is a practice where someone bets on the chances of something happening either positively or negatively. Used in financial markets to predict the direction of stocks or bonds prices will go on a given date. This can reap great rewards, and cause many betters losing cash and can become addictive if you are not careful.
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