Guide To Betting On Financial Markets

Fixed Odds - Overview

Fixed Odds Financial Betting is the most accessible way of making money on movements in the prices of shares and indices. Other forms of trading are highly leveraged, which in theory means you can win a lot of money with a low stake. The reality is that when, for example you place a spread bet, you need to have up to 200 x times your original stake in your account to cover the bet.

Fixed Odds is a lot easier on your money management, allowing you more time to develop your knowledge of the markets. The main difference is that with fixed odds your potential losses are clear at the outset, which means that there is no need to create complex money management strategies to cope with losses over multiple bets where the loss outcome is unknown.

There is a huge variety of bet types available (below), and as there is always a market open somewhere in the world, there is always a bet to place, even in times of economic depression - remember you can bet up or down. Anyway, lets move on to the essentials of fixed odds financial betting.

Fixed Odds Financial Bet Example

This is a simple example of placing a bet on British Petroleum (BP). Please note that the exact methods by which bets are placed vary from broker to broker, but in essence they are the same everywhere.

You've logged onto to your Fixed Odds Broker and selected UK Stocks
From the list you have then selected 'BP'
You have done this because you have heard that BP is 'peaking' at the moment, and you don't think their share price can go any higher.

The Bet:

BP's current price is 580.00, and you predict that it won't go over 592.00 over the next seven days.
This is a 'no touch' bet, and you have placed £29 stake that will return £50 if you are right.
It's as simple as that, in seven days time you either get £50 back or lose your stake.
(A 70% return on your investment)
In the meantime you get to click on to your graphs to see how you bet is doing, or
you can forget about it until the bet expires.
While you are waiting, you don't have to worry about your bet going too far in the wrong direction and
eating up your whole account, because there is no leverage.
With other trading platforms people sit there sweating every point their stock moves in the wrong direction.
You decide on the 'expiry date' of the bet,
usually the longer the bet is open, the better odds you will get, but
if you are going to do this, you need to study your graphs, or other predictive sources.

Other Types Of Bet

One Touch: e.g. the FTSE 100 will rise 50 points over the next 10 days.
As long as it hits that rise of 50 sometime over the 10 days you win.
It doesn't have to stay above the 50 points, just touch the 'marker' once.
No touch: e.g. the FTSE 100 will not rise 50 points over the next 10 days.
As long as it doesn't rise 50 points over the next 10 days you win.
Expiry Range : e.g. in 1 days time the EUR/USD will be within the range of 1.4744, and 1.4849.
Expiry Miss : e.g. in 1 days time the EUR/USD will either be higher than 1.4979, or lower than 1.4609
These are just a few of the bet types on offer, there are a lot more,
if you want to check out a broker with a lot on offer, try www.betonmarkets.com

Fixed Odds Financials Bet Expiry Length

The length of a bet is decided by you, although different brokers have different time limits on different bets.
Bets can be anything from 1 minute to a month or longer.
Short bets (e.g. 1 min) are called 'Flash Bets', and they are pretty much pure gambling,
as it is practically impossible to predict what can happen within such a short timescale,
- the absolute trading definition of a flutter, and usually 50/50 odds - just like tossing a coin!

Different Markets To Bet On

This depends on your broker, but a wide range are available.
The main International Indices are available on most platforms, as are
many major UK and US stocks.
Some firms offer betting on commodities e.g. gold.
Betting on currency markets is now being offered on a few platforms,
and many people are using fixed odds as a way of betting on currencies,
without having to open a large deposit account on another platform.
See Fixed Odds Stock Market Betting for details of different available markets.

Advantages Of Fixed Odds Financials

You losses are limited to your original stake, nothing more.
You don't have to bother with the risk and complexities of leverage.
You can bet on most markets, and many popular stocks.
If a market is looking bad, you can bet on it going down, there is always an opportunity to profit.
There's a huge variety of bet types available to suit all market conditions.
You don't have to watch your screen and graphs like a hawk like on some other platforms.
Your profits are legally considered to be the result of gambling and are therefore tax free.
You do not need to cover your bet with anything other than your stake.
Money management is not as complex as Forex or Spread-betting

Disadvantages Of Fixed Odds Financials

Your winnings are not proportionate to the level of e.g. a stock's rise, your odds don't change as the stock's performance rises or declines.
The flip side of this is that if you put your money on the FTSE going up, no matter how badly it performs, you lose no more than your original bet.
There is no leverage so you can't increase your potential profit, conversely this could be seen as a good point.

Fixed Odds Financials - Overview

Fixed Odds Financial Betting offers a great opportunity for people who have no market experience, to engage in an exciting and potentially profitable venture. It is gambling, there's no way round it, but, it's a really exciting entrance into the world of trading on the markets. It's not the same as placing a bet on the horses or the football, and watching the bet play out on TV, it's a bit more cerebral, but just as much fun - and you don't need much cash to start. There are plenty of reputable Brokers - to find out which brokers meet you individual needs visit our Fixed Odds Broker Comparison.