Online Spread Betting

A central feature of financial betting is the fixed risk nature which allows market participants to limit the risk to a known amount. When one opens a bet (long or short) they know beforehand what risk they are taking. What important here is that you can exit your bet at any time before settlement thus you have an option of minimizing the risk even further. The same can be applied to the winning bets (you can collect the win before the settlement time).

Liquidity is always provided and is achieved by the bookmaker acting as a market maker, always being willing to sell bets to a buyer, and in the case it is permitted, to buy bets back from a participant wanting to sell the bet before it expires.
A central feature of financial betting is leverage. The benefit of leverage to the participant is that it allows a greater percentage change in capital than if it were invested directly in the underlying asset. This makes financial betting less capital intensive than trading directly on securities exchanges

How To Spread Bet

Managing Risk in Spread Betting
Despite the risk that comes with the use of high leverage, spread betting offers effective tools to limit losses.

• Standard Stop Loss Orders - Stop losses orders allow reducing risk by automatically closing out a losing trade once a market passes a set price level. In the case of a standard stop loss, the order will close out your trade at the best available price once the set stop value has been reached. It's possible that your trade can be closed out at a worse level than that of the stop trigger, especially when the market is in a state of high volatility.

• Guaranteed Stop Loss Orders - This form of stop loss order guarantees to close your trade at the exact value you have set, regardless of the underlying market conditions. However, this form of downside insurance is not free. Guaranteed stop loss orders typically incur an additional charge from your broker.

The Bottom Line
Continually developing in sophistication with the advent of electronic markets, spread betting has successfully lowered the barriers to entry and created a vast and varied alternative marketplace.

The temptation and perils of being over leveraged continue to be a major pitfall. However, the low capital outlay necessary, risk management tools available and tax benefits make spread betting a compelling opportunity for speculators.