The Definition
A type of speculation that involves taking a bet on the price movement of a security. A spread betting company quotes two prices, the bid and offer price and investors bet whether the price of the underlying stock be lower than the bid or higher than the offer.
The investor does not own the underlying stock in spread betting, they simply on the price movement of the stock.
A type of speculation that involves taking a bet on the price movement of a security. A spread betting company quotes two prices, the bid and offer price and investors bet whether the price of the underlying stock be lower than the bid or higher than the offer.
The investor does not own the underlying stock in spread betting, they simply on the price movement of the stock.
The General Purpose
The general purpose of spread betting is to create an active market for both sides of a binary wager, even if the outcome of an event may appear prima facie to be biased towards one side or the other.
The general purpose of spread betting is to create an active market for both sides of a binary wager, even if the outcome of an event may appear prima facie to be biased towards one side or the other.
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The point spread is essentially a
handicap towards the underdog. The point spread can be moved to any level to
create an equal number of participants on each side of the wager. This allows a
bookmaker to act as a market maker by accepting wagers on both sides of
the spread. Spread betting is a fantastically tax efficient way to trade on the
currency markets. But be warned, there’s no advantage to tax breaks if you
don’t make any money in the first place.
Spread
betting is any of various types of wagering on the outcome of an event, where the pay-off is
based on the accuracy of the wager, rather than a simple "win or lose" outcome, such as fixed - odds betting. A spread is a range of outcomes and the bet is whether the outcome
will be above or below the spread.
