What is Online Spread Betting?

Day trading futures online through software provided by a spread betting company uses the same process regardless of the nature of the product traded, be it commodities, currencies or index market futures. Each market at any moment has a value. That value can go up or it can go down. The daytrader speculates on this movement through the spreadbetting platform supplied by the financial spread betting company.

The financial spread betting company offers the daytrader two prices around the live or estimated market price. These two prices are known as the Sell or Bid price and the Buy or Offer price, and it is from these adjusted prices that the “spread” of spread betting gets its name. To clarify, the “spread” is an artificial price calculated by the spread betting company that adds points to the underlying actual market price.
For example, the live price on the Dow Jones Daily may be 4356.

The spread betting company may quote a Sell price of 4354 and a buy price of 4358. In this scenario, for each trade a daytrader makes, whether they choose to buy or sell, the spread betting company will make 2 points worth of profit on the margin regardless of the outcome of the trade from the daytrader’s perspective.

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