Spread Betting

Financial spread betting is nowhere near as complicated as most people perceive. Nor does it have to be overly risky – provided you use it in a controlled, logical manner.

The reason most private investors are still losing out is that they believe prices have to go up in order to make money.

The reality, however, is that the investment banks never lose in a shaky market. . . they use strategies like spread betting to actually profit from plummeting shares, soaring property prices, volatile currencies and commodities.

All they're doing is placing bets on whether a market, share or commodity will move up or down.

My point is, with the right guidance and by following a solid system, there is absolutely no reason why YOU can’t do the same.

Spread betting is a form of investment where you take the most predictable profits the market has to offer. . . and then multiply them by 10 times or more.

The truth is, anyone can predict many of these 2%, 3% or 5% price movements with a high degree of certainty – like if a company suffers an accounting scandal, if the pundits are tipping an oil price rise, or if a particular company releases a profit warning.

In fact, in many cases you can often accurately guess the direction of a price just by simply following the financial pages.

For instance, when AOL announced a merger with Time Warner, the DOW shot up by approximately 200 points. These kind of predictable movements are not uncommon - and if you know how to spread bet, you can turn them into gains of 20%-400%. . . in just a few days, repeatedly throughout the year.

Until recently, financial spread betting was a closely guarded secret of professional traders. But volatile global markets combined with a recent surge in financial bookmakers have produced a new breed of private spread better.

These people are turning small financial bets into thousands of pounds in tax-free profits. . . while at the same time protecting their current investments from any further loss.

My aim is to have you doing the same in 15 to 30 days time.

And your gains are free from Capital Gains Tax. Also, financial spread betting:

1) Is open to everyone - There are NO barriers to entry, apart from enthusiasm. You don’t require any special equipment, hours of time or even investment skills. You can profitably trade from home – even as a beginner – in as little as 15 minutes a day And you don’t have to trade every day to make great profits. . .

2) Is perfect for a bear market – ‘Going short’ means reversing the process of buying low and selling high. In a bear market going short with spread betting is a fantastic way to make money from falling shares. And it’s definitely NOT too late to go short.

3) Guarantees a strictly limited risk – With normal shares you can set a ‘stop loss’ – a predetermined point where you get out if the market moves against you. But if a share moves overnight, your broker may not get you out at the stop loss agreed. With spread betting, the stop loss is guaranteed. Even if shares move a great deal you’ll still be taken out of the bet at the guaranteed stop loss price you asked for.

4) Allows you to ‘get your feet wet’ with tiny bets – You always choose the exact size of the bet you place. The bookmakers don’t even care if you start with 1p a point! That makes it very easy (and not too costly) to learn the ropes.

5) IS A GEARED INVESTMENT – This is perhaps the greatest benefit. You can spread bet for a mere fraction of the cost of buying a share or commodity. . . and you can leverage your profits enormously. As I’ll show in a moment, a 5% rise in share price can be turned into a 50% profit with less money at stake and in far less time!

So how exactly does this work?

When you spread bet, you aren’t purchasing a share or commodity, you’re just benefiting from its movement in price. You place a bet with a spread betting company on whether you think a market or share will be higher or lower in a few days’ or months’ time.

What you are doing is trading your stake on a per point movement. And the only money you need to lay down is a deposit with your bookmaker, which is usually about 10% of the market position.

It might sound confusing, but it’s actually simple. Here’s an example. . .

Let’s say you thought Tesco Shares were going to go up. If Tesco was at 200p and you bought 1,000 shares you’d have to fork out £2,000.

But not with spread betting. Your deposit is only 10% of what you’d have to pay if you bought the shares – so only £200 in this case. Each point here is a 1p movement. So if you placed a £10 per point bet, and the shares go from 200p to 210p – up 10 points – you’ve made £100 profit – a 50% gain on your deposit.

Alternatively, if you’d actually bought the shares, that same 10p price rise would give you just a 5% profit on your outlay of £2,000. And oops! That 5% profit would be reduced even more by Capital Gains Tax.

This is the wonderful leverage I talked about earlier. By spread betting you haven’t tied up as much money, you haven’t tied up your time (you can be in and out in less than a month) and you’ve made a bigger gain than if you’d risked both!

What’s more, instead of risking 100% of your capital as you would if you’d bought the shares, you simply place a stop loss to limit the amount at stake. With spread betting, you are always in control.

Remember, spread betting is a venture that can take up as much time or as little time as you wish. It can be an occasional pastime, a strategy you use purely to protect your investments, or a serious, sustained money making enterprise.

There really is no other form of trading quite like it – especially in a bear market.

I fully support anyone who feels they aren’t ready to trade the financial markets. But, to be honest, unless you investigate this opportunity seriously, how will you ever know?