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How to Spread Bet Indices

One of the most popular types of spread betting is on stock indices. These indices are typically slightly less volatile than an individual stock or currency, but they still have enough movement to make significant gains. If you haven’t bet on indices in the past, just follow these simple guidelines to help you to have the best chances at making a good profit using financial sports betting.

trading indicesThere are thousands of indices that you can choose to bet on, so try to find the ones that look like they are poised to make significant movement. Once you have an index in mind, you can choose to make a bet that it will go either up or down. Next, you’ll decide how much you want to bet per point. The amount you make or lose will be determined when you close the bet. At that point, the amount you bet per point will be multiplied by the number of points the index went up or down. That number is how much you made, or lost, with your wager.

Betting on Index Going Up

A common index is the UK 100. If you decide to make a bet that it will go up when the rolling bet price is set at 5370/5371, you will begin making money for each point above 5371 this index is at when you close the bet. So, if you bet $15 per point in this situation, and you close the bet when it is at 5381, you will multiple $15 by 10 (the number of points it went up) and get your profit of $150.

If the index drops below 5370 when you close the bet, however, you will lose money. The calculations are done in the same way.

Betting on an Index Going Down

If you think that the UK 100 is going to drop significantly in the coming days and weeks, however, you can make a bet based on that as well. The process is exactly the same, except you will make money when the index drops, and lose it if it ends up going up.

Simple Predictions

As you can see, financial spread betting is all based on making predictions regarding the direction a specific asset will go. Unlike investing in stocks or indexes themselves, where you actually own a piece of the asset, you are simply making a wager on its performance. You never actually own any stock, which helps to limit or even eliminate many of the tax penalties associated with most investment options.

While there are significant risks of losing money when you engage in financial spread betting, many people find that the opportunities are far greater. With proper research and wise betting, you can make a significant amount of money using this strategy.

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