What is spread betting?

<p id="isPasted">Spread betting forex is a tax-free* method of trading the currency markets. Traders are able to speculate on the price movements of currency pairs by opening a position based on whether they think the currency will appreciate or depreciate. If you expect the value to rise, you will open a long or ‘buy’ position, or if you expect the value to fall, you will open a short or ‘sell’ position.</p><p>With a spread betting account, you never own the underlying asset. If the market moves in your favor, this will lead to capital profits, but equally, if the market moves against your position, this will result in losses.</p><p>As long as investors believe the market will rise, they go with the bid price and if they believe it will decline, they will go with the asking price. In addition to the use of leverage, the ability to go both long and short, the selection of markets available, and the tax advantages of spread betting, are some key features of spread betting.&nbsp;</p>

<p>Spread betting, a trading technique that allows traders to bet on the direction of a financial market without actually owning the underlying security.</p>

<p>Keep in mind that the spread bettor has to overcome the spread just to break even on a trade. Generally, the more popular the security traded, the tighter the spread, lowering the entry cost.</p>

<p>Spread betting is speculating on the direction of a financial market without actually owning the underlying security. A bet is placed on the movement of the price of a security. An investor bets whether the price of the underlying security will be higher or lower than the bid and ask (also known as the spread) quoted by the spread betting company.</p>

<p>Just as with betting on a horse race or sporting event, spread bettors win or lose money based upon the outcome of the bet, though spread betting is not an all-or-nothing proposition like sports betting.</p>