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A Brief Guide To Spread Betting
The ''spread'' in spread betting is the difference in the price offered when you buy stock, and the price at which you can sell the stock. The higher price is called the ''offer'' price, and is the price offered when you wish to buy stock. The lower price is called the ''bid'' price, and is what you will get when you wish to sell stock. This applies in real life trading, but in spread betting, instead of buying any stock, you gamble on which way the value of the stock will move, and the real life money markets determine the outcome of the bet. You can either bet that the value will increase or decrease ? this is called taking a position. If you think that the value of a stock will increase, you would take a ''long'' position, and ''buy'' stock. If you think that the value of the stock will decrease, you take a ''short'' position, and ''sell'' stock. If the value of the stock falls below the bid price at which the wager started, you will have won the bet, with the long position of course winning money if the value of the stock rises above the offer price. The amount that you win depends on the stake, which is placed on a pounds per point basis ? for example, ?10 per point. If you took a long position on stock at an offer price of 4002, and the value rose to 4020, you could ''sell'' (which means conclude the bet) and take winnings of ?180. However, if the value of the stock had decreased at the end of the period of the bet (sometimes as short as one day''s trading), you would lose money; for example, a fall in value to 3995 would leave you owing the spread betting company ?70. Find out more about spread betting online on the sites of providers like Trade Fair. Article Directory: http://www.articledashboard.com Alfonzo Burnash is a journalist, the author of this article, and is a keen amateur spread betting enthusiast. They recommend checking out Trade Fair if you want to find out more about spread betting. |
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