Financial Betting Explained

Financial Betting Explained

Financial betting, also called spread betting, is when bettors speculate on whether an asset’s price will rise or fall. You do not have to own the asset to make a bet on it. This is a way of making money on the market without owning the assets themselves. So if you are good at predicting markets but aren’t a professional trader, this one’s for you.

It Seems Like Trading?

Financial betting can seem a lot like stock trading because you can buy and sell bets. So you are trading in a way – but you are trading the bets instead of the assets themselves. The reason this betting is also called spread betting is that the difference between the buy price and the sell price is called a “spread”. You do this through a spread betting company, who profits from this spread.

Less Extra Costs

Technically, if you put in the same amount of money, you will get out the same amount with stock trading or betting. With stock trading, you purchase shares, while with spread betting you decide an amount to commit per “point”, the variable that reflects the price point. The profit will be roughly the same, but you will get more out of it with spread betting, because their will likely be no commissions incurred to open or close the bet and no capital gains tax.

Leveraging

Another reason financial betting can get you more money than trading is that financial bets can be leveraged, meaning you don’t need to put in as much actual money up front. This is essentially betting with borrowed money – you only need to put in a fraction of the actual money to open a bet, but if shares go down, you might need to pay a lot more than your initial deposit. So while you can win much more with leveraging, the risks are higher. But hey, good bettors know all about risk.

Going Short Or Long

When it comes to trading, taking advantage of falling stock by short selling incurs a number of obstacles for online betting NZ punters. To sell short, a trader must be able to borrow the required number of shares to sell, so that they can buy them back at a lower price later on. There is no complication like this when it comes to financial betting – you can bet that the price of an asset will go up or that it will go down, the process is not really different.

It’s For You

If you are looking to make money off the financial market, but you aren’t a professional trader, spread betting is for you. You don’t even need a suit or a briefcase – you can do it online from your own home! And if you are good at predicting market patterns, you can actually earn more with financial betting than you can with trading.