Casino Articles - Financial Spread Trading

Financial spread betting trades increased by 134% in 2009. In this article we will investigate why spread betting has increased in popularity. Spread betting companies were first used by city dealers and the Whiz kids at hedge funds to speculate on financial markets. As technology developed and the internet became more popular with the retail public spread betting was used by people to make predictions on the movement of financial markets and assets.

Financial spread betting profits are free of capital gains tax, so that spread betting profits compare very favourably to other sorts of investing, producing larger profits and money for the spread bettor. Coupled with the ability to short stocks / tradable assets (i.e. make money if the price of the asset falls rather than rises) spread betting is a potent addition traditional ways of trading / investing in financial assets. The benefits make spread betting a great tool for financial spread trading guide and portfolio hedging. These are more advanced uses for spread betting and are described below.

Financial spread betting companies allow you to trade stocks, shares, soft commodities, metals, house prices and more.

This unique ability to profit when prices rise or fall has enabled people to use spread betting in one of two ways.

1) to speculate on the price movements of financial assets. 2) use financial spread betting to hedge an investment portfolio. This is something that asset managers do to protect the value of their assets if the overall markets that they have invested in fall.

Using spread betting for speculation is gambling and can be as enjoyable or not as gambling. As with some card games, spread betting, does in fact involve a large degree of skill.

Another reason for the increase in popularity of financial spread betting is the amount of information, resources, and courses available to people interest in learning more. When individuals employ a system or a set of rules to spread betting then it is no longer spread betting but financial spread trading. There are many different ways to master the art of financial spread trading. A good financial spread trading guide should teach traders to minimise the risk to their trades and to their whole betting bank, how to let winning trades run and how to tip the balance of probabilities in their favour. All financial spread trading strategies focus on how to manage the trading bank to reduce losses, how to select winning trades and when to exit trades.

The second use for financial spread betting is hedging a portfolio of shares. If an investor has X amount of money invested in shares with no other investments they are said to be 'long only'. The value of the portfolio only increases if individual share prices go up. There is an obvious risk here...what if the value doesn't go up?

Share prices often follow patterns of support and resistance that can form over many years. If values break a level of support not tested for years the investor may want to place a corresponding short spread bet. So that the spread bet makes money as if the price breaks down through a certain level. This is a good way to reduce loses or 'hedge' the portfolio of shares.