Financial Bets Variation

Financial bets can be placed on almost anything now. There are companies that specialize in arranging for such bets by their customers on a global platform. Technically financial bet means to wager on a financial instrument or an event, against the odds presented by the bookmaker.

There are several systems of wagering in this field, the kind of financial bet you play depends entirely on your appetite for risk. There are all types of playing fields, fixed odds for the safe players, floating odds for the less risky players and binary bets for the people with decent risk appetite.

These days binary bets are becoming popular as the returns are far better in binary bets. One of the most popular variation is the financial spread betting.

What is Financial Spread Betting?

Financial spread betting is simply wagering on the outcome of an event in which a range of outcomes is spread and you have to wager on the fact that the outcome of the event will be higher than the spread or lower than the spread.

This type of bet carries a very high level of risk and the potential profits or losses can be way above than the actual amount wagered.

The main purpose of spread betting is to create equal opportunity for all the parties involved in this binary form of betting, and try to have equal number of wagers on both sides of the spread. This is done to minimize the chances of loss to the bookmaker and also create an active and interesting market for all.

For better understanding of financial spread betting let me show you an example:

In this case, suppose the FTSE 100 is quoting at 6500-6750. This means you buy an UP bet at 6750 and you buy a Down bet at 6500. Now you apply your mind and ascertain that the market is going to rise so you buy an UP bet. The important point to remember is that the bet is for each point, Now if you place a bet of $10  and the FTSE rises to 6900, that means it has risen by 150 points and since a bet is for each point, your earning will be 10x 150= $1500.

Similarly, if you believe that the FTSE will go down and you place a bet at 6500 for $10 and the market goes down to 6300, your earnings will be 10x 200= $2000.

Now you see, the advantage of spread betting is that it creates equal playing field and market on both ends of the game.

Another variation of binary betting is Total, also known as over/under bet. This variation is popular in the sports arena. Under this type of bets, the betters wager on the total number of points or runs to be scored in a match.

 Suppose a soccer match is on the way and the  total number of goals is set at 10, and the final score is 9, the betters who have placed their bets on under will win, while if the total number of goals scored are 11, then the betters who have placed their bets as over will win.