How to Spread Bet to Earn a Bit of Extra Money on The Side

by News Guy on June 26, 2012

(This is a guest post)

Times are tough just about everywhere, especially in the stock markets. At a time when the UK economy has officially slipped back into recession, opportunities to make money from trading on markets have become rare. Fortunately, there is a way of making money from the markets even if they’re on the slide. Spread betting can be a great way to make an additional income from falling markets, but how does it work?

Spread betting is where people can trade on whether the value of a certain instrument (example stock, index or commodity) will move up or down in value. If they trade on that stock or market going up in value and it does, they make a profit, whereas if they do the same on the value decreasing and it does go down, then again, they profit. However, it is just as easy to make a loss with spread betting if the market move in the opposite direction to which you had predicted. Spread betting through the likes of City index has allowed an increasing number of traders to possibly make money despite volatile trading conditions, whereas their opportunities of profiting by trading stocks the conventional way are much more limited.

To start spread betting, there are a few things you need to do in preparation. The first of those is to work out which market to trade on. One of the best things about spread betting is that you have a choice of several thousand markets to trade. Ideally, it should be one you know inside out.

Next, work out how much money you want to trade. With spread betting being leveraged, you only need to deposit a small amount if you want to make big profits (usually between 1% and 10% of the total value of your trade). If you’re new to spread betting, the best thing to do is start small by only depositing something in the region of around £200. Spread betting this way will give you an indication of how much you should spend when trading, and how much to spend if you want a certain amount of profit. It is imperative to remember, however, that it is just as easy to make big losses with leveraged trading, if the trade goes against you.

By being meticulous in your trading methods, you could become a success in the exciting world of spread betting.

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