What is financial betting?
It is wagering on the price development of a financial instrument at a later date relative to the current price, against odds offered by a bookmaker. The outcome of the wager at settlement is binary - either a win or a loss.
Where have you heard about financial betting?
Financial betting has become increasingly popular in recent years, particularly betting on the outcome of the currency markets. William Hill, Unibet, 188Bet and bet365 are well-known examples of financial betting sites. Regulation of financial betting has also been much in the news.
What you need to know about financial betting.
Financial betting instruments are a type of digital option, with settlement executed in cash. At any point prior to the settlement date bets can often be sold, opening up possibilities to bet on the accuracy of a market move within the fixed limits of zero win and maximum potential win.
The difference between financial betting and speculation using products such as financial spread betting is that the bet must result in a binary win or loss based on an event in the underlying financial instruments. This triggers a fixed payout for a win. With spread betting, the payout or loss varies with the price level of the underlying instrument.