Financial spread bets are wagers placed on financial products in the attempt to guess the trend of the value of the product. For example, an oil barrel is worth $40 at the beginning of the trade and the spread is $38-$42, you place a bet on whether the price of the oil will go above or below the spread.

If we take that specific example and say that the bet placed is that the price will go above $42, at the end of the bet the price of oil is $45 and the bet was placed on the sum of $50, you just won $50*$3 = $150 (45-42=3). If the price went the other way you will have to pay the same amount to the spread betting company.

There is a risk in financial spread bets, there’s also a chance for a big profit if your bet turns out right. In order to avoid big losses you can stop loss your bet and so if we go back to the previous example, we can set the stop loss at $40 if you bet on the price to go up and it went down, or at $47 for example if you bet on the price to go down (short).

In anyway it’s up to you in terms of the amount you risk and the trend of the price and of course the stop loss which is very important.

In financial spread betting you can bet on a variety of products including stocks, commodities (oil, gold, gas) and even forex.There’s a big difference between financial spread betting and forex. Forex for that matter is much more complicated as financial spread betting is somewhat similar to sports betting in terms of type of wager.

Financial spread betting is illegal in the United States but completely legal in Europe and particularly in the UK where it’s also licensed.Financial spread bets are especially attractive as they cover various aspects of the financial markets and not limited to forex or CFDs or other financial related online spread trading, but include most of the common financial markets.