FTSE Spread Betting
I have just been watching the Chancellor of the UK present the budget this lunchtime. A quick look at the markets and you will see that they are down by 1.5%. Most people who have stocks and shares will have lost money today but there is a way of making money during falling markets and that is through FTSE spread betting.
So what is FTSE spread betting? The name ‘betting’ gives it a bad name. Yes it is betting but so is all financial ‘trading’. What happens is that you decide which way you think the FTSE 100 is going to go and then you take a position either long or short.
There are also different types of bets that you can put on. If you want to be rewarded for just being either right or wrong then you can put a binary bet on. This is a bit like sports fixed odd betting as you know exactly what you will win or lose beforehand.
The other bet that you can use with FTSE spread betting is daily bets or rolling daily bets. This is slightly different to binary bets in that you don’t know how much you will win and lose beforehand. This amount is determined by how much the market either moves in your favour or against you. Either you are very right and win a lot or you are very wrong and lose a lot.
While this type of trading is very flexible it can be risky. This is because it uses leverage as you trade on a margin. This can be great when you are profiting but can be devastating if you make mistakes.
FTSE spread betting has disadvantages and advantages and it is up to you to decide if it is suitable for you. I did notice the Chancellor did put up capital gains tax but trading this way is currently exempt from that in the UK.