Financial Betting
Before we begin, please note that entire books can be written on financial betting. Keep that in mind as you read this general overview of financials betting. We will get into more detail on these topics later but for now, we are going to keep this as a very brief overview and explanation of financial betting.
Best Financial Betting Sites
Financial betting sounds like a redundant idea because it’s based on the stock market and various exchanges around the world. The first thought people often have is if you’re going to bet on financials, why not just trade them like everyone else does? Well, there’s a subtle difference between betting and trading.
With financial betting, you don’t actually own the assets you are betting on. The bookmaker simply follows the market, sets the odds and you bet on the various trading instruments. It’s comparable to betting on a sports match that you watch but don’t participate in.
The biggest advantage to financial betting is that with fixed odds financial betting, your risk is limited to your initial bet. You can’t have unlimited losses with fixed odds betting like you can with other types of trading. Spread betting is a different story but we’ll get to that a little bit later.
Another advantage to financial betting is that it offers immediate liquidity. When you place a financial bet with a bookmaker, you pay in cash and you are immediately paid back in cash. You don’t actually hold assets and have to trade them.
The downside to financial betting is that you don’t own the assets you bet on. This means you can’t hold those assets and watch them grow indefinitely. Of course, owning assets also opens up a whole new door of taxes and regulations. In the UK, financial betting is considered gambling so you don’t have to pay taxes on your winnings.
Financial Spread Betting
Spread betting is different than normal financial betting. It’s still in the same category but there is one major difference: in spread betting, your wins and losses are not limited to your initial stake. It’s nice to know you can have unlimited wins but it’s also frightening to know that your losses are also unlimited. The good news is that you can set stop loss orders that automatically close your position if the losses reach a point that you specify in advance.
Spread betting allows the bettor to wager on the movements of a certain stock, currency or other financial product. When you place these bets, you are wagering a certain sum of money on each point of movement of that product.
For example, let’s say you believe the price of a certain stock will go up in the near future. You buy into that trade at $10 per point. Now let’s say that stock moves up 7 points. You would make a profit of $10 x 7 points, or $70. If the market had instead gone down 7 points, you would have lost $70.
With spread betting, an entire fortune can be (and have been) made in very short order. At the same time, entire fortunes can be lost in very short order. Before you jump right into financial spread betting, it would be a good idea to read a book or two and practice online with demo trading.
Fixed Odds Financial Betting
Fixed odds betting, also known as binary betting, is the safest form of financial betting. In fixed odds financial betting, you place a simple wager on a specific financial instrument either going up or down. If the instrument moves in the direction you predicted, you win your bet. If not, you lose the bet.
With fixed odds financials betting, betting sites and bookmakers set the odds of certain events so you know exactly how much you have to risk and how much you can get paid if you win. There’s a set risk (your initial bet) and a specific payoff. With fixed odds financial betting, you either win or lose the bet. When trading in the stock market, your risk and potential payouts aren’t always known.
The risk you take on with fixed odds financial betting is limited to your initial stake. Your wins are also limited but that’s the price you pay for having limited risk. New financial bettors should start out with binary bets because of their limited downside.
Financial Flash Betting
Flash bets are wagers that are based on short term market movements. You can place wagers on the market moving up or down over the next X number of minutes. After that period of time has passed, you will either win or lose depending on whether the market is higher than or lower than where it was at the time you placed your bet.
One Touch Financial Market Betting
One touch bets are wagers that a certain asset will touch a certain level within a certain time frame. You get to choose the target price, the time period and the payout if you are correct. The betting site will then automatically compute how much this bet will cost if you are correct. The more difficult your bet, the less it costs.
Double Touch Betting
A double touch bet is perfect for especially volatile assets. This is a wager that the asset will touch one price above the current level and one price below the current level. The more difficult your bet, the more you make if it is successful.
No Touch Financial Bets
This is a wager that the asset will not hit a certain level within a time frame that you specify. If the asset has not touched that level by the end of the time frame, you win the bet.
Double No Touch Bet a.k.a. Barrier Range Bet
This is a great bet for stagnant assets. You set two price levels, one above and one below the current price. If the asset stays within those two levels during the duration of the bet, you win the bet.
Break-Out Financial Bet
This is a bet for volatile assets. If you think an asset is going to make a big move, but you don’t know in which direction, you can make a break-out bet. This bet sets two price levels, one above and one below the current price. If the asset touches either one of those price points, you win the bet.