May
The purpose of this short article is to look at the basics of financial spread betting. Financial spread betting can be quite a difficult area to know where to begin. This article breaks it down into the different bets that you can make.
There a 4 different types of bets that you can make. If you are completely new to financial spread betting then you probably would’ve only ever heard of one… Futures. The Futures market has been around for a very long time.
I don’t like to trade futures compared to the other appealing bet types within financial spread betting. Futures have specific end dates, for example the contract might state that you will take delivery of a certain asset on the 1st June 2011.
You don’t have to worry about physically taking possession of the asset. You would hope to sell the contract on closer to the time at a higher price. There are some things you do have to worry about however. These are things like the current interest rates and carry costs for the holder.
The Futures market can be expensive way to trade as well as an expensive one.
A new area of financial spread betting that is increasingly being used today is the Binary Bet. The Binary Bet works in the same way as sports fixed odd betting.
It is a more transparent financial spread bet. Thre are 2 outcomes to bet one and before you enter the trade you will know how much you will win if successful and the amount that you may lose.
The more commonly associated bets with financial spread betting is the daily bet and the rolling daily bets. Both of these types of bets are very similar. The only difference between these 2 bets is the daily bet is settled at the end on each day and the bet is exited. With the rolling daily bet the bet is settled at the end of the day by your financial spread betting company but is reopened in the morning. You will stay in the trade until you decide to exit.
Both types of bets are easy to get to grips with. I think that the rolling daily bet allows you to trade in a similar way to Futures and at the same time is more transparent, simpler and less expensive.