Spread betting can be regarded as the derivatives product which allows you to trade on the movement of the price of a wide array of financial markets including shares, commodities, currencies, indices, and much more. The spread bets can be used for speculating on the price movements irrespective of the fact that whether the actual market is rising or falling. Today, here are a lot of well-known platforms which let you spread bet and earn money. For instance, ETX Capital‘s spread betting platform allows you to trade forex as well as commodities and indices.
How it all began?
In the 1940s, a Chicago-based bookmaker Charles K McNeil made the spread betting popular for the sports scores, but this all could not gain much popularity as the USA authorities did not encourage the financial spread bets. This discouraged the people in the USA to trade on the different commodities and currencies but spread betting started to emerge in the other parts of the world.
Then, in 1970s Stuart Wheeler re-invented the concept and offered this new concept of the spread betting to his fellow investors. Considering the fact that Gold, as a commodity was too expensive for an average guy to trade, he created an index for it and gave the investors an opportunity to bet on the gold’s price movement. More precisely, they started betting on the future of the gold, without actually buying or selling the gold in the market.
Although, this type of trading was a strange idea in that era, but its ability to let people trade without actually buying the commodity made people get attracted towards it. As this idea started to catch up, Wheeler started to widen up the selection of markets which his investors could bet on.
The Emergence of Internet
In the 1990s, when internet evolved as one of the best ways to communicate and connect with the people sitting in different parts of the world. With people using the internet for diverse reasons, the spread betting got impacted significantly with it. The Internet allowed the traders to stay permanently plugged into the fast evolving world of spread betting.
With the internet, the spread betting providers started to broaden their scope of the marketing activities. The World Wide Web helped the traders with the ability to easily & instantly speculate on the rise or fall of the prices globally along with the ease of access.
By 2000s, the factors, including mainstream media’s interest in the stock market, the emergence of the online trading platforms, the popularity of currencies and commodities as the entities to bet on, brought the spread betting to the much wider audience worldwide. The tech-savvy people and the younger generation comprised a major percentage of the traders.
Today, spread betting has become exceedingly popular and has come a long way since its emergence in the 1970s. Financial spread betting is today an established way to bet on a broad array of global markets and their performance, and in the UK, the spread betting is regulated by FSA (Financial Services Authority).