![]() Spread betting allows greater versatility for traders because we are able to speculate on prices moving up and down, whereas when buying shares we can only bet that the price will rise. Spread bettors can use charts to make strategic decisions and place orders. In the below image taken from IG Index, we can see a chart that offers dealing capabilities. Trading long and short are fancy financial terms of saying we are positioned to profit if the security’s price rises (going long), and if we are speculating that the security’s price would fall then we would be positioned short. Spread betting is a popular way of trading because it also enables traders to position themselves long and short on securities. Spread betting works by placing a ‘bet’ on the spread – the difference between the buy and sell price. The big difference between buying stocks and spread betting stocks is that when spread betting we don’t own the underlying asset. This can be in the form of stocks and shares, as well indices, commodities, and even bonds. ![]() Spread betting is a tax-free financial derivative that allows traders to take a position on a security. Download my free trading handbook with 10 profitable techniques What is spread betting?
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