Which Markets Support Spread Betting?

Which Markets can you Spread Bet On?

As you may already be aware, you can place spread bets on a large variety of financial markets and assets. In fact, you now have such a diversity of choice that your spread betting broker will allow you to speculate on practically anything.

For example, if your analysis indicates that the price of gold is about to climb higher, then you can exploit this analysis by executing a long spread bet using gold as its underlying asset.

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Alternatively, if you have concluded that the US Dollar will most likely plummet over the next quarter, then you can attempt to profit from your observation by initiating a short spread bet based on the greenback. Similarly, if you plan to speculate on the fortunes of major companies, such as Apple or Google, then spread betting can help you achieve this objective.

In recent times, spread betting has provided individual investors with a new financial mechanism which has completely revolutionized the way they can now trade the financial markets. In additional, spread betting brokers are constantly striving to develop new products and services that can allow the clients even easier access to an increasing number of markets.

Many novices are still of the opinion that they can only utilize spread betting to speculate on major indices. However, this viewpoint is completely wrong. Not only can you trade indices but your choice of assets these days is astonishingly high. In fact, spread betters have access to literally thousands of diverse markets. For instance, you can choose to open spread bets based on the directional movements of a single market security, such as a commodity, currency pair or share, or you can based then on an entire market sector or index, such as the FTSE or S&P 500.

What are the Main Markets?

Your choice of tradable markets is basically categorized into five key sectors: commodities, stock indices and sectors, bonds, currencies, and single shares.

However, there are many other asset types that you can trade, such as bonds, sports and interest rates, etc. You should also be aware that some spread betting brokers offer a larger diversity of assets than others (you can compare all spread betting brokers and markets here). The following list identifies some of the markets that you can trade:

1.  Stock Indices: Speculate on the directional movements of indices, such as the Dow Jones Industrial Average, S&P 500, DAX 30 and FTSE 100, etc.

2. Shares: Speculate on the directional movements of individual shares, such as BP, Google, Apple and Barclays, etc.

3. Commodities: Trade the directional movements of commodities such as gold, crude oil, lumber and gas, etc.

4. Sectors: Trade the directional movements of the shares of firms operating within the same market sector, such as the mining or financial sectors, etc.

5. Forex: Trade the directional movements of currency pairs, such as EUR/USD, USD/JPY and AUD/USD, etc.

6. Bonds: Bet on the directional movements of bonds, such as the Eurobund and Euribor.

7. Interest rates: Speculate on the directional movements of central bank interest rates, such as those of the US Federal Reserve, the European Central Bank and the Bank of England, etc.

8. House prices: Speculate on the directional movements of UK housing market prices.

9. Sports: Place spread bets on major sporting events, such as baseball, soccer and horse–racing, etc.

10. Binary bets

11. Options

Common Mistakes Novices Make

With so many great markets to trade, you must still adopt caution when you first start spread betting. This is because most novices fail to realize that they face quite a learning curve in order to fully master the intricacies of spread betting. Many new traders are attracted to spread betting by the constant publicity proclaiming that it is a source of extensive and easily-acquired rewards. Consequently, they are not properly prepared for what lies ahead of them. For instance, even if they do possess a spread betting trading strategy it could well be inadequate. In addition, they do not appreciate that they must focus on risks first before profits.

Beginners also have a strong tendency to overtrade because they have not developed any feel for risk and money management concepts. Consequently, they do not realize the importance of restricting their risks to just 2% of their total equity per spread bet and, unfortunately, lose their initial capital within months after startup.

They enter spread betting with this mentality because all the associated advertising has misled them into believing that they achieve significant financial returns by just enrolling with a spread betting broker and opening an account with only a few hundred pounds. However, if you do equate with these symptoms then you must quickly understand that spread betting is not so simple and that you must adopt caution until you acquire proficiency at this type of trading.

In reality, you will discover that very few novices achieve a constant level of success and that most succumb to one or more of the following mistakes:

  1. They do not take spread betting seriously enough by trading in a business-like manner.
  1. They gamble by overtrading in an attempt to make significant profits because they do not understand the concepts of leverage.
  1. They do not spend enough time mastering their spread betting skills using a demo account but instead risk their own money far too soon.
  1. They are under the impression that all their spread bets will be successful. Instead, they need to learn how to design a spread betting trading strategy exhibiting both a positive win-to-loss ratio and expectancy value.
  1. They trade money that they cannot afford to lose because they have little or no understanding of the importance of risk and money management concepts.
  1. Novices allow their gut instincts and emotions to influence their spread betting trading decisions far too often making erroneous decisions as a result.

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