To the unbeknown, stock markets and trading is just a bunch of squiggly lines and percentages that go up and down as much as the sun does. The numbers on the screens of all stock market floors are a maze of randomness, with lots of shouting, red faces and people getting all hot and bothered.
But actually, what you’re seeing is the flow of money. The financial world would be cut off from its oxygen supply, was the trading to stop.
At all levels, novice, amateur to professional traders, we can all get involved and make our own profit. One of the ways that is very inviting is spread betting. Contrary to the name this practice is given, you don’t actually gamble, or at the very least you shouldn’t.
Unlike gambling on a sports match, you actually have credible back up of evidence to make a certain bet. A team can win or lose depending on the day but the forex and market share trading platforms, have a long history and very detailed information of their progress. Indeed some markets can become volatile but even this can be predicted.
Politics and nature
Of all the things that are lead indicators of how well a certain index and currency will do, politics is it. Whether there is a new trade deal, a boosting of existing deals with more investment and greater expansion, or simply a political fracas between two economies or more, the index market is going to show signs of turmoil or confidence. Natural disasters such as earthquakes and floods are immediately going to have a negative effect on trade. Imports and exports may slow down as trade routes are closed and literal airport and harbor traffic jams of freight put massive constraints on the economy. This is hardcore evidence that you can use in spread betting to bet against indices and currencies falling or rising in value.
Pay to play
Spread betting or CFD’s only pertains if you’re betting in the UK, however, if you’re outside of the UK i.e. international, you can become a CFD trader. That’s one difference between the two but the other is that you don’t pay capital gains tax or stamp duty for spread betting. However, you do pay capital gains tax for CFD trading. If you’re torn between spread betting or CFDs, read that piece about the key notable differences. Spread betting pertains to whether or not the price of a currency, share, index or commodity will go down or up. Depending on the movement whether positive or negative you make a profit based on the point difference. In CFD trading you exchange the difference in the value of an asset from the time the contract is active to when it ends. You don’t own the asset or the financial instrument you use to trade it but you can benefit from the market moves. For both spread betting and CFD trading, you must pay a deposit, i.e. pay to play.
Spread betting is hardly like playing roulette. You’re not stabbing in the dark hoping to get a win. Using industry knowledge, historical patterns and indeed current affair events, you can place your bet with greater knowledge and therefore, higher chances of success.