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call it, spread betting operates much like the betting on sports

outcomes or like the cash forex market with its bid-ask spreads.

Let’s say you have

$5,000 (about £2.600) to invest and are interested in buying Toyota

Motor Corp. stock, which has been trading in the $130-$135 (£68-£70)

range, a rather lofty level for many small investors. If you pay the

full amount for the shares and do not buy on margin in a normal

equities transaction, your trading stake can’t even buy 40 shares,

assuming you would want to put all your investment money in one

stock in the first place.

But, to keep the

math simple, let’s say you buy 40 shares and sell after the stock

rises from $130 to $140 (from £67 to £72), about an 8% advance that

puts a $400 (£205-£210) gain in your pocket (not including

commissions or fees and not factoring in possible gains from

dividends).

Tailoring your amount of risk

• EUR / USD
• USD / JPY
• GBP / USD
• USD / CHF
• AUD / USD
• USD / CAD
• EUR / JPY
• AUD / JPY
• GBP / JPY
• EUR / GBP
• GBP / CHF
• EUR / CHF