Financial Bets
Financial Bets refer to the wagering on the development of a certain incident or movement in price of a financial instrument like shares, stocks, bonds or commodities like oil, edibles, gold, silver etc at a later date relative to the current position against the odds offered by the bookmaker.
The central point in financial bets is however, that the better and the bookmaker have complete knowledge of the risk involved and the money involved as pay-off.
Since all the betting instruments are in digital form, there is no question of delivery and that the settlement is based only on the difference in movement of the instrument or outcome of an incident. The important thing in financial bets is that, all the payments are made in cash.
There is some flexibility in these bets as the bets can be sold or purchased before the settlement period as decided by the bookmaker.
There are mainly three variations of financial bets, the main difference being the manner in which the odds are made by the bookmaker.
- Fixed Odds Financial bets
- Floating Odds Financial bets
- Binary Bets
Fixed Odds Financial Bets:
Under the fixed odds bet, the odds at which the bet is bought or sold remains fixed, the amount of money to be won or lost is also fixed, only the amount of investment changes upon the movement of price of the instrument.
Floating Odds Financial Bets:
Under floating odds financial bets, the odds keep changing upon the change in the price of the instrument or commodity, while the strike price or target of the event on which the bet is placed remains constant.
Binary Bets:
Under this kind of bets, the odds are displayed as an index from 0-100, where the settlement is made at 100 if the event is reached and on 0 if the event is not reached. The bet is made for movement per point of index and the best point is that you can buy or sell the event and profit from movement of index in either direction.
An important aspect of financial bets is that, the bookmaker provides liquidity at all times of the event. You can buy a bet at any time during the happening of the event and you can sell your bet also at any time during the event before the settlement time fixed by the bookmaker.
Another important aspect in financial betting is that financial betting allows better profits from instruments with lower amount of capital investment than investing directly into them, while the losses remain under control.
There are a number of companies that specialize in financial betting. These companies offer various betting options to their customers and are completely legal. They charge very minimum commission and are regulated by the FSA instead of the Gambling commission. A restriction is also in place for these companies as to the limit of gambling, however all companies provide binary betting to the customers in one form or the other.
The companies allowing financial betting are as under:
- Bet On Markets
- Betsfortraders
- Binary bet
- Choice Odds
Some of these companies provide spread betting, a variation of Binary betting, while some provide CFD and binary betting also.