Glossary: Financial Spread Betting

Financial spread betting uses terminology which may be unfamiliar. This glossary provides definitions for words about spread betting. This list is not inclusive of all financial spread betting terms.

The glossary provides the most commonly used words in betting. One may access the words and definitions by scrolling the list. These words will help a trader understand more about betting.

Words A through J

Bearish

A bearish market in spread betting means market prices are decreasing.

Bet per point

The amount a trader is wagering for every point the market moves.

Bid price

The bid price is the price offered to sell shares on the stock exchange.

Bonds

The purchase of a certificate guarantees the purchaser a return. The return is the purchase price plus interest at the end of the bond.

Bullish

A bullish market occurs when stock market prices are increasing.

Buy

A trader buys when the prediction is that market prices will increase.

Cash account

An type of account used in financial spread betting based on cash. This account must always have money to cover all wagers and trades.

Commodity

A product which is universal or the same across many countries. Examples include wheat, oil, Gold, coal, corn, cocoa, and coffee.

Credit account

An account used in spread betting and awarded to certain investors. These veteran investors are backed by credit instead of cash. A credit account is often reserved for experienced traders only.

Currency

Money used with the public and includes money from all countries.

Derivative

A derivative is an agreement or contract between two people. The price is the value is determined by the price of something. Financial spread betting is a good example of a betting derivative.

Hedging

The trade of another market from the market one is currently in. Hedging is used to reduce a trader’s risk in one particular market. Traders often hedge to protect or limit one’s capital in another bet.

Index

An index is the total value of all stocks in a given market. The FTSE and Dow Jones are examples of an index on an exchange. An index can change as companies are added or deleted from the list.

Words L through Z

Leverage

Also called gearing. It is the potential to make big profits with a small initial outlay.

Margin

The amount of credit available in your account.

Market price

The current price of a commodity, currency, or share on the exchange.

Sell bet

A bet that the market price will be lower than what it currently is.

Share

A piece of a company that a day trader purchases for the market price.

Spread

A range of numbers that show what bookmakers predict future prices.

Stake

The amount of money a trader is betting.

Volatility

When market prices go up and down frequently it is volatile.

Wager

This is the same as a stake in a financial spread betting bet. This is the amount a trader is putting up as a bet or a trade. A wager is how much one is willing to risk on a spread betting trade.

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