Tip 5: Arbitrage

Arbitrage is a trading method that a few spread bettors consider for gains; it can guarantee profits but requires multiple accounts across many different spread betting companies. This strategy can be effective as not all spread betting firms have the same financial spread, and you can use the difference in the spreads to make a profit. For this, you need to keep a track of all your accounts and be quick in buying and selling two trades against each other.

For example, say that platform A has a spread of 100-110 for a particular stock, and platform B has a spread of 112-122 for the same stock. If you have accounts with both spread betting platforms, you can buy the stock at the lower price at platform A (110) and sell it at the higher price on platform B (112) resulting in an immediate gain of 2 points.

Arbitrage is no longer an effective strategy in spread betting as companies work together (through software) to ensure that the spreads stay the same across platforms. Spread betting companies also have alerts in place that will highlight such differences, allowing them to make an almost immediate adjustment to the spread. Arbitrage in spread betting is therefore highly risky and the opportunities to gain are minimal; this type of betting is more popular in Forex markets where there are hundreds of platforms to choose from.