The future of spread betting looks bright – and here’s why Marcus Turner Jones examines spread betting, which is becoming more accessible and more enticing for those investors looking for a new endeavour and who wish to expand their portfolio Spread betting has been in the news a lot lately, thanks to several major companies experiencing a growth in both turnover and profits. Entities like City Index are working hard on expanding both their technological offerings and their range of betting markets, and their strategies are proving surprisingly effective. The reason for this is simple: spread betting is becoming ever more accessible. With the continued volatility of the investment markets dominating financial headlines, traders are becoming increasingly focused on diversifying their portfolios, and spread betting is developing into a progressively more attractive choice. Here, we look at what spread betting brokers are doing to capitalise on this trend, and how you can take full advantage of it… The wonderful world of spread betting Spread betting has a reputation for being high-risk, the result being that even experienced investors are often unfamiliar with it. Those who have chosen not to explore it as an option in the past can thus find its mechanisms confusing, but a growing number are now seeking to educate themselves. If you’re amongst this class, or even if you’re a complete novice, it’s important to understand how it works. Spread betting is a derivatives product. It allows investors to trade on the price movements of thousands of financial markets, from indices to shares, commodities, currencies, and more. Thus, those who are familiar with any one of these sectors will automatically have a head start. This, perhaps, is a large part of its burgeoning appeal; when times are uncertain, we’re looking for opportunities that are both new and familiar. The way that spread betting is formulated means that it’s possible to profit from both rises and falls in market values, and this is another attractive point in its favour. Considering the atmosphere of volatility pervading the markets at the current time, this ability to capitalise on downturns as well as upwards trends provides plenty of opportunities to make money. What’s more, spread betting doesn’t necessitate the immediate deposit of large sums of cash; as a margined product, you can put down only a small percentage of the total value of a position. For those trying to spread their interests across a diverse range of sectors, this leaves more money in the pot to help achieve such an end. A recipe for success The factors explained above each prove enticing for those seeking a new investment endeavour, especially with the current atmosphere of volatility that’s pervading the markets. However, some of this must be attributed to the efforts of brokers as much as to the nature of spread betting. As expert Gary Hinds explains: “Spread betting brokers operate in an extremely competitive environment, so to be successful, they need selling points that set them apart. As a result, there are a number of common attributes shared by companies who are thriving in 2016: a strong brand, frequent IT developments to help provide an unparalleled service, and a constant list of planned future enhancements to entice the attention of investors.” In particular, it seems that those companies who capitalise on technological developments are attracting an ever growing customer base. In a world where every man, woman, and child in developed countries owns a smartphone, the availability of apps means that more people than ever before have access to trading, and an increasing number are utilising this fact. Part of this is attributable to the freshly created flexibility that so appeals to those who work full-time. Whereas spread betting was once viewed as the realm of professional investors and serious hobbyists exclusively, apps allowing interested parties to trade whenever and wherever they choose are increasing the sector’s allure, and helping to attract a different audience entirely. As newly addicted spread better Maisie Jones explains: “I’ve tried my hand at trading before, but spread betting holds more appeal to me than any of my previous endeavours. My broker offers access to a huge range of markets, and this means that I can choose options that complement me and my strategy. With 24-hour access to my account, and a mobile app to trade from, I can make my moves when and where I like, allowing me to fit my trading around my day job, and be successful at both.” The lure of spread betting With tax-free profits, markets available to trade around the clock, and an ever-increasing number of brokers expanding their technological offerings, spread betting is becoming more accessible and more enticing by the day. With markets that allow traders to capitalise on both upwards trends and downturns, it is also perfectly suited to the current atmosphere of volatility hanging over the global investment sector. For those looking for a new endeavour, and wishing to expand their portfolio, this should surely make it a shoo-in. Will you choose to take advantage, or will you let such a fantastic opportunity pass you by? Rely on your investment instincts, and the correct response should be clear.
... spread betting is becoming more accessible and more enticing by the day