One of the big draws of spread betting is easy access to global share markets. Most firms will offer you the chance to invest your hard earned cash in major UK/US and eurozone shares allowing you to profit from international market changes.
The big difference between many firms now is whether they allow you to bet on AIM-listed shares. AIM-listed shares are effectively penny stocks, only a couple of firms offer these at the minute. If you can’t see what you want to trade, call up their traders and they will build the market for you. Penny stocks can be some of the most exciting to trade as they offer extensive returns and minimal risks.
When trading shares make sure you have done your research. Remember, if the news has been out for any length of time, the share price will most likely have adjusted. Many firms offer you a list of when companies are announcing profits, have scheduled press releases and other items that can have a drastic impact on their prices. Get your bets on before these announcements and research other sectors that will influence the company’s profits. A great example is that Britvic shares plummeted after the announced their profits had been slashed due to rising sugar prices.
When trading on shares you will be offered the choice of daily rolling, near, next and far futures (Link to day trading and futures section.) Don’t be worried if the sell and buy price are in decimal, it is just the way the spread is wrapped around the actual share price.
Now imagine this situation. You know Dominos Pizza is reporting its profits today, you know the cost of retail rent, wheat and other items have gone down in the last few months. You know the economy is climbing and people can spend more on luxury goods such as fast-food. A spread betting firm may offer a daily rolling price on Dominos Pizza at 474 – 477. This means you can sell at 474 if you think the price will go down or buy at 477 if you think it will go up. If you bought the share at 477 with a stake of £10 and at the close of trading it ends at 500, you have made £230 profit!