spread betting query


S

Skerdal

I have no intention of spread betting but just have a query.

I understand the principle behind it but where does the money come from.

Say I bet £10 a point on ftse rising and it went up 60 points - I win £600

But where does that money come from?

people who lost out other bets?
the spread betting company?


thanks
 
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T

tim.....

Skerdal said:
I have no intention of spread betting but just have a query.

I understand the principle behind it but where does the money come from.

Say I bet £10 a point on ftse rising and it went up 60 points - I win
£600

But where does that money come from?

people who lost out other bets?
yes.

tim
 
P

Paul Harris

tim..... said:
If you bet on a horse and by some stroke of luck it wins where does the
money come from?

This is similar, some people will have bet one way and others will have
bet the other, the person making the market takes bets both ways and
profits or looses based on the outcome. However, they can move the
price slightly to weight it in one direction if they see too much one
way traffic. Alternatively if all the bets are larger and one way apart
from changing the price they will lay it off against the futures market
still making a profit from the margin between the buying and selling
prices. They operate in a similar way to Bookies but in spread betting
they normally carry the least risk they can and benefit mainly from the
spread.
 
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J

Jonathan Bryce

Skerdal said:
Say I bet £10 a point on ftse rising and it went up 60 points - I win
£600

But where does that money come from?

people who lost out other bets?
Either from people who bet on it going down, or from them putting a
corresponding amount of money on the FTSE to hedge your bet.
 

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