In most instances of trading and investment, volatile markets should be approached with caution. This is because, as a rule of thumb, with traditional trading and investment, you can only really make profits when markets are on the up. However, spread betting allows you to profit from both rising and falling markets. This makes volatile spread betting markets much more appealing than volatile stock markets or currency pairs, for example.
One of the most profitable ways for an experienced spread better to make money in a hurry is by short selling volatile markets. Instead of betting that a market will strengthen and improve in value, short-selling or ‘betting the shorty’ as it’s also known requires you to bet that a market will fall in price.
As volatile markets fluctuate up and down in value, you have twice as many chances to make money as you would from simply buying and selling shares. Plus, you need a certain amount of investment capital before you can buy share but you can open a spread betting account with just a few pounds.
Do be aware that, for the inexperienced investor, spread betting on volatile markets can be equally as risky as profitable. Ensure that you know as much about a market as you can before you start placing your bets and stick to one or two markets, as opposed to placing may bets across many markets. Common sense dictates that the less markets you have to research, the better job you can make of it.
So, volatile markets can offer opportunities to spread betting investors that they don’t offer to traditional traders but beware that these additional rewards come with additional risks. Study markets thoroughly before investing big bucks.