You may have heard of this concept before especially if you are into sports betting, but have you ever heard of it in relation to the financial market? If you use to love spread betting on your favorite teams and found that you were good at predicting the outcomes then you will love this version of it. Not only can you make a lot of money but the entire concept is quite simple and can be very lucrative. And for those of you that have never heard of it, to put it simply, a spread bet is a tax free alternative to traditional trading.

But although the two concepts seem similar they couldn't be farther from each other. For instance, with spread betting you do not actually buy the stock that you are betting on, you only bet on how you feel the market will treat it in a given period of time. In other words, if you have been watching the financial section of the paper and feel that a certain stock will continue to drop then you could make a bet on the fact that it will go down in a certain period of time. You can even make as low of a bet as 10 GBP, and will win or lose money per point that it moves.

On the other hand, with traditional trading you would have to have a good chunk of change to purchase the stock, and then if and when it went down you would automatically lose money. With spread betting, even if your bet is wrong can control exactly how much you are willing to loose if you implement a stop-loss clause. But let's put it more into perspective with an actual example.

Let's say you have 1000 GBP that you can spare in an investment. You then keep an eye on the financials until you think you have a winning bet. Then you decide that your particular favored stock is going to rise so you bet 20 GBP on an ?up? bet with a stop-loss clause of 500 GBP. This way even if you loose you still have another 500 GBP to invest in another bet. Then let's say that your spread betting pick rose 200 points. All of a sudden you went from 1000 extra GBP to 4000 GBP virtually over night. And even if the stock you bet on tanked, you will only be out 500 GBP.

And given our unstable financial market right now all over the world, people are making money hand over fist. That's right, even though many are losing everything they have because of the unstable world market, others are using that to make it big. And to put the icing on the cake, in some jurisdiction like the UK, you can win all you want and never pay a cent to the government in taxes. Unbelievable as it is, the government there has yet to institute a gains tax on spread betting. But this may not last long so start your betting today.