Futures Spread Betting

By mosesbet · Filed Under Spread Betting Comments Off on Futures Spread Betting 

Spread Betting Futures

Futures trading has a long history that stems back to Aristotle.  Futures trading involves signing a contract to buy a piece of stock or shares in the future at a pre-determined price.  If the market value of the stock rises higher than the contracted bid price than the trader will make a profit.

The advantage of futures trading is that you can make substantial gains (and losses) on the market.  You do not have to forfeit any money over when signing a contract, which will end at the agreed upon closure date.  You can also end futures contracts earlier by selling them on to other traders in the hope of capturing a small profit.

Futures trading is similar to the concept of betting long, except the time duration will be much longer than a traditional day trade.  Futures contracts tend to range from 1 month, 3 months or even up to 3 years.  This all depends on the asset being traded. 

As an example of how futures trading works, let’s say that you think the average UK house price market will rise in the next year by 20%.  You can then go to a financial broker who will offer you an agreed-upon price for selling the assets in a year’s time.  If the average house price market is 20% higher than at which you agreed to buy, then you’ll make a 20% return on your investment (ROI). 

You can think of futures trading or futures contracts as an investment just like buying a home or property.  If the value rises in the future, than you can make a profit from the difference.

Futures Spread Betting

Unlike futures trading, futures spread betting doesn’t involve the buying of any assets of stock.  Instead, you are simply betting on the market moving up or down.  When you place a futures spread bet, you are basically setting a fixed “close date” for your bet.  It is just like a typical instant execution order however you cannot close the bet until a certain time passes.  You can make massive profits correctly predicting market movements in the long term, however likewise you can make equal losses if you guess wrongly.  Most sports betting platforms allow you to set a stop-loss order which shuts down the order if the value of the stock drops below a certain amount (e.g. 10 pts or 10% drop in price).  This helps reduce your risk exposure and Tradefair lets you customise automatic stop-loss conditions for each of your trades before you make them.

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