The best way to understand how spread betting works is to look at some example trades.
A spread bet is simply a way to speculate on the price movement of an underlying instrument. You can speculate on movements in equities, indices, currencies, commodities, bonds, options and interest rates.
For every spread bet, the price movement of the underlying instrument is measured in points, and you place your bet against every point movement.
Whichever instrument you choose, Finspreads will quote you two prices – the bid (the price you sell at, and the lower of the two prices), and the offer (the price you buy at, and the higher of the two prices).
To open a bet, you simply choose your instrument, and choose the amount of money that you would like to bet against every point movement.
To close a bet and realise your profit or loss, you simply place an opposite bet on the same instrument.
The profit or loss that you make will be the difference, in number of points, between the opening bet and the closing bet, multiplied by your stake. So if you bet £5 per point, and the price movement was 10 points, you would make (or lose) £5 x 10 = £50
To find out more on how spread betting works visit http://www.finspreads.com
Spread betting carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors.