I am writing this after just watching the emergency budget being presented to parliament in the UK. As I return to my desk to view the financial markets I see that they are down by over 1%. For most people this is bad news, but for people who do FTSE spread betting they can make money in falling markets.

A lot of people don’t know what FTSE spread betting is. It is a way of trading the financial markets which is a bit different from owning the actual shares. You decide which way the market will go then you make a long bet if you think it will go up or a short bet if you think it will go down.

You can bet in a couple of different ways and you should choose one that suits your personality. The first style is called a binary bet. You bet a certain amount and you know how much you could win or lose depending on how the market finishes.

The second way of FTSE spread betting that I will go through is the rolling daily bet. The daily bets are still more common than the binary bets although the binary bets are increasing in popularity. The biggest difference is that the actual amount that the FTSE moves is important in determining the amount you win or lose. If the FTSE moves in your direction a bit then you win a bit, if it moves in your direction a lot then you win a lot.

Trading this way gives you great flexibility but at the same time it can be very risky. You trade on a margin so you are using leverage. This means you can lose more than your initial deposit if you get it wrong.

FTSE spread betting has disadvantages and advantages and it is up to you to decide if it is suitable for you. You may have seen that the Chancellor increase the rate of capital gains tax today. You will be please to know that spread betting is currently exempt from tax in the UK.

Are you interested in finding out more about FTSE spread betting? If your answer is yes then please check out Tom’s site. He has used his knowledge to to create a blog that will help you in starting your FTSE spread betting journey.