Ten Tips for Betting on the Stock Market


Stockbrokers are not the only way you can play the stock market. Spread betting allows for you to wager on the movements of indexes such as the FTSE100 or the price of individual shares.

You are given a price at a future date and can bet that the share price or index will rise or fall. You can also wager on commodities and exchange rates.

Spread betting on financial markets began in the 1970s, when investors wanted to speculate about the price of gold without needing to spend a lot of money.

Spread betting is like any other investment. It is important to understand the risks involved. Bookmakers recommend that clients only speculate with the money they have available. SBOBET Agen Volatility in market conditions can lead to substantial gains or losses.

Spread betting is right for you? What are the most important things to remember?

1. What is a spread betting and how does it work.

Contact the bookmaker to request a quote for a specific share or index. You might ask for the FTSE 100 June spread. The spread will be, for example, 6,870-6,880. You can sell points if you believe the market will be lower. You can also buy points if you believe it will rise. Then, you can bet on anything above Pounds 2 per point. You would win Pounds 1,100 if the market closed at 7,100. If you bought at Pounds 5 per point, you would win Pounds 2,100. You would lose Pounds 350 if it closed at 6,800

2. What are the advantages of bets over shares?

There is no tax on winnings, and there are no stamp duties or fees for stockbrokers.

Spread betting can also be used to place bets on shares yet to go public, such as those of internet companies.

For Lastminute.com, IG Index offered 350p-360p initially, but it raised the spread dramatically when investors purchased enthusiastically. The spread was initially quoted at 620p – 630p, but it sank back to 570p-580p last Wednesday.

Another advantage is the fact that you can make more money on share price fluctuations.

If a share is worth Pounds 10, and you place a bet for each penny increase, then you would wager Pounds 50 to get a 5p rise in share price.

3. Other than shares, what else can I place a bet on?

You can bet on everything from politics to sport. There are many innovative wagers that you can make, including the number and location of corners in a football match and the length of time William Hague will be the Conservative Party’s leader.

4. What is the maximum amount I can bet on any given time?

The minimum bet is usually Pounds 2, but you can place a maximum of thousands of pounds per point.

Bookmakers may grant you a line or ask for money to deposit.

5. Is there any limit to how much I can lose?

For those who wish to reduce their liability, bookmakers offer stop-loss options. You can specify the level at which your bet will be closed.

If the spread for a share is 150p-160p you can choose a stop loss price of 120p. You would not lose more than 300 Pounds if you lost 10 Pounds per point.

The bet will automatically end if the stop loss price is reached. This applies even if the index or share recovers. Every bet is monitored to ensure that potential losses do not exceed the credit limit, or the deposit amount. Any dramatic price movements will be notified by the bookmaker. The bookmaker will alert you to any dramatic price changes and allow you to close your position.