What makes spread betting different?

November 27th, 2008

There are many things in life that often have more than one name. Take a trading platform and a trading system for instance. They are two seemingly different things. A platform does not seem to have anything in common with a system at a first glance. A closer look will reveal that these two are in fact one and the same. It is simply that traders on the stock exchange prefer to use the word platform.

Spread betters on the other hand speak of a trading system. Now, you also get to complete opposite of this situation where people presume that two dissimilar names mean exactly the same. It is like that with spread betting and gambling.

So near and yet so far

Spread betting and gambling are often presumed to be exactly the same thing. This is not entirely, if at all, true. Spread betting is often seen as a glorified form of gambling. Spread betting is similar to gambling in that it involves a huge risk in order to stand a chance at gaining profits. The fundamental difference comes in that gambling involves set odds while the odds the spread better is running are so to say unlimited.

That is the very waif-like divide between gambling and spread betting. Spread betting is also nothing like trading on the stock exchanges or markets. Yet it functions on those very markets and exchanges. Spread betting is neither of this pie nor of that, it is actually something entirely on its own and functions within its own specific niche and has carved out its own place in the industry.

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