Spread Betting - Stake A Penny Win A Pound
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Spread Betting - 'Stake a Penny, Win a Pound'
Understanding Spread Betting
Spread betting is a dynamic method for trading a wide array of stocks and major indexes, such as the FTSE 100, Dow Jones, and S&P 500. A great resource to begin your journey into spread betting is [www.financial-spread-betting.com](http://www.financial-spread-betting.com), where you'll find an excellent quick-learning page.
The Basics of Spread Betting
Don't be discouraged by the term "betting," which often carries negative connotations. Spread betting differs significantly from traditional gambling, where a bookmaker might take your entire stake. Instead, it's a form of trading where you engage as one party in a cross-trade, akin to CFDs, with another trader who holds an opposing market view.
For instance, if you predict that the FTSE index will rise, you aren't betting against the dealer but against another trader who thinks it will fall. Essentially, each pound gained by one trader is a pound lost by another. The spread bet dealer acts as a neutral intermediary, facilitating these trades with the help of advanced computer systems that match buy and sell orders throughout the trading day, and often overnight.
How Spread Betting Works
Before diving into spread betting, you'll need to choose a spread bet dealer. Numerous dealers in London offer comprehensive information packages that include detailed explanations and examples to help you start trading.
Spread betting allows you to profit from both rising and falling markets, similar to CFD trading. It is particularly useful for trading indexes under varying market trends.
Using the FTSE index as an example, you can place bets from as little as 1p to 250 per point. For every point the market moves in your favor (after accounting for the initial spread), you earn the chosen amount per point.
Trading Stocks with Charting Tools
To trade individual stocks, use our Charting Tools screen within the Click Volume software. Simply select "Charting-Tools" from the menu, enter a stock symbol, or use the Symbol Lookup feature, and click "DRAW" to view the stock chart and Trend Index.
The Trend Index strategy is most effective with high-volume, liquid blue-chip stocks. Here are some popular choices:
UK Blue-Chip Stocks:
- Abbey National- AstraZeneca
- Barclays
- BP
- BT
- CGNU
- Diageo
- GlaxoSmithKline
- GUS
- HBOS
- HSBC Holdings
- Legal & General
- Lloyds TSB Group
- Marks & Spencer
- mmO2
- Prudential
- Royal Bank of Scotland
- Sainsbury
- Shell
- Tesco
- Unilever
- Vodafone Group
US Blue-Chip Stocks:
- American International Group- Amgen
- AOL Time Warner
- AT&T
- Bristol Myers Squibb
- Cisco Systems
- Citigroup
- EMC Corporation
- Exxon Mobil
- General Electric
- Intel Corporation
- IBM
- JDS Uniphase
- Juniper Networks Inc.
- Merck & Co.
- Microsoft
- Oracle Corporation
- Pfizer
- Qualcomm
- Sun Microsystems
- Wal-Mart Stores Inc.
Final Thoughts
Whether you decide to trade stocks, indexes, or both, it's essential to find a market that you like and focus on it fully. In the next section, we'll return to our favored market of major indexes.
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