All about Financial Betting

It is hardly surprising that to be successful in the realms of financial betting you really need to know quite a bit about how the markets work as well as the types of bets on offer.

Types of financial betting

Financial betting can be short or long term, and can involve stocks and shares, currencies, or the various financial indices which are seen as indicators of performance in different areas, such as the DAX, Nasdaq, or FTSE 100.

Fixed odds betting

In this type of betting you need to predict whether a particular market will see a rise or fall beyond certain set parameters within a specified period. The time could be an hour or a day, for example; and if you lose then the amount is simply your fixed stake.

Spread betting

Spread betting allows for greater profits but also greater losses if you predict incorrectly since bets are based on the degree by which you were right or wrong with your prediction. It is wise to set a stop-loss so that if you are losing there is an agreed cut-off point to protect you from further losses.

Binary betting

Binary betting can be tricky for many to fully understand and not something to dabble in without understanding the ins and outs. Binary bet markets are offered the stock indexes, the larger and more volatile shares, foreign exchange and also some commodities, depending on which broker you use. Note that there have been some doubts raised about the operating procedures of some firms.

With binary you bet a certain sum of money per point on an index for example. The bet is whether the index will rise or fall and whether it will break through a certain level within a specified time frame. The end result of a binary bet is either 100 or 0 depending whether the index breaks through the specified parameter, either higher or lower. If you were to buy at 50 for £1 predicting a rise, and then the market went up to 80 then the return works out as 80 – 50 = 30 then multiplied by £1 giving a £30 profit. If the price does not go over 50 that day then the bet is settled as 0. Then your loss is £30.

Stocks and Shares

Dabbling in stocks and shares is generally a longer term type of bet where you want to buy at a low price and sell later at a higher one. The gamble is whether the price will actually rise and by how much. Obviously if the price should drop then you stand to make a loss.

It is essential to thoroughly research the market with this kind of investment since you are probably tying up a lot of money without a guaranteed return. You would be possibly considering a particular company and looking into its track record carefully. The type of company and the product or service on offer needs to be evaluated of course to see if it is likely to be, or to remain, in demand. Other factors to consider are the personnel involved and their relative experience and past performance.