Financial betting is the wagering on a certain financial instrument regarding the price movement from the current price to a future price. The future price may be later the same day or could be 3 months into the future. Financial betting is also called a binary bet meaning the outcome of the bet will either occur or it won’t. Profits in financial betting are not dependent on how correct the investor is on the outcome, instead just whether the outcome occurred.
Financial betting has some benefits for traders with one being the risks of the bet are known prior to placing the bet. A bettor is placing a wager on an outcome with certain fixed odds. The fixed odds allow a trader to determine the total amount at stake based on the size of the wager. Since financial betting gives traders the ability to determine how much one can lose based on the stake size, it provides the trader with more control over the bet.
Another benefit to financial betting is a trader can exit a bet at any time in order to minimise one’s losses. Therefore if a bet is a losing bet, a bettor can close the bet and pay the current losses.