Spread betting is one of the hottest forms of investment on the web. Though it has technically been around for more than 100 years, it’s the immediacy and power of the internet that has given rise to a new era of spread betting.
When you first look at a spread betting site like ETX capital, and all of the stocks, Forex, commodities, etc. therein, you might be intimidated. It might appear that there are too many graphs and too much activity for you. Wouldn’t you need to do a ton of research to understand this stuff?
Not really.
Spread betting is a simple concept. It’s all about trying to predict the future value of financial entities, and putting money on the line to test your predictions. When you see huge charts of endless stocks or other securities, it’s important to know that no spread bettor is actually looking at all of them. They only focus on the few about which they have specialized knowledge.
What’s more, you probably already have some of this specialized knowledge.
Let’s say you are interested in the company CRISPR, which makes gene editing medications that have great promise of curing cancer in humans, having already done so in mice. You observe that (at least at the time of this writing), the stock is only trading at $17. You know that the company has already acquired patents in China and Europe, and the the US is likely not far behind. You know that a recent study has been released by CRISPR telling of new achievements, but you don’t think that the market price yet reflects the potential of this news.
If you were a traditional investor, you might buy up 100 CRISPR stocks and wait for them to gain value. But you don’t have $1700 to spend on stocks right now. You only have $200. This is where spread betting comes into play.
Spread betting does not require you to buy the stock (or any other form) that you are interested in. You are just making a deposit along with your prediction about whether the price will have gone up or down at the end of a given time period.
This is the way that spread bettors can get a leg up in the financial markets without having a huge amount of capital to begin. Successful bets achieve large returns, much faster than traditional investing. You are at risk, of course, of losing deposits if the end result is different than your prediction, but expertise in your given area of interest can keep these events to a minimum.
You Already Have the Knowledge
A spread betting account with a broker like the one above is easy enough to do. The hard part is acquiring knowledge about the thing you want to bet on. Fortunately, you probably have knowledge and life experience that already gives you an advantage about one or more of the entities offered by your broker. All you have to do is keep up to date with the news and investing community, and you’ll probably be very successful in your contracts.
So choose the thing you know the most about, read the daily news, and spend some time in internet forums where people talk about your item in up-to-the-minute detail. Then make a deposit in your new account and lock in a contract regarding the future value of your chosen financial entity. Having chosen something you truly enjoy, your guess will be far more likely to be successful than a coin toss. Having won returns in proportion to how much the price changed in your favor, you will be on your way to a successful spread betting career.
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