Spread betting can sometimes turn out to be quite confusing especially to the novice. A Spread betting guide although a skeleton of what spread trading entails, can help shed some light on the practice. This is especially regarding the advantages and disadvantages of the practice. 1. Spread Betting This is not only one of the exciting ways of speculating on the movement of underlying index or share but it is also the fastest way of growing a share or index. Majority of financial investors see it as a cost effective and flexible manner to trade in ordinary shares. 2. Pros • Stamp duty is not paid • The profits made on financial spread betting are tax free. • There are no fees and direct commissions paid to a company dealing in   spread betting. • One is able to benefit from rising or falling markets. • The bets are traded on a margin and hence can be place with a small initial outlay. • Using stop losses one is able to limits risks. 3. Disadvantages The spread betting guide covers the cons of spread betting especially for the beginners. • There are markets that can be volatile and thereby one can make major losses. • Spread trading does not suit traders investing on a long term basis. • You have no rights as an investor, including no voting rights and you will not benefit from dividends. 4. What to Trade Since one is not selling or buying the specified underlying instrument in real sense; the range that one bets upon is greater than the underlying shares. One can make bets on Currencies, FX, Individual shares from FTSE 250 and FTSE 100 and from the leading European and US shares, indices on the Stock market like NASDAQ or FTSE. Other commodities include oil and metals, options and futures, bonds and interest rates. 5. How it operates This spread betting guide explains how spread betting works. Spread bets are bets made on future movement of an instrument. Unlike the case in share trading, one is able to gain from the rising and the falling in shares or any other of the financial instruments. A company dealing in spread betting normally quotes two prices for an underlying instrument; an offer and a bid. The difference that comes about from the two is the spread. To close on a bet, one places an opposite bet of the specified instrument on a similar amount of money per point. This spread betting guide will make it easier for the new traders to get to know more about spread betting before they can trade with real money.