Betting is an agreement between two willing parties on an uncertain event where one party agrees to forfeit something to the other party in case of an incorrect prediction. Betting is widely practiced in sports and in financial markets. It may be or may not be in any way related to taking a chance to try out a luck.

In the world of sports, it is common in horse racing, football matches, super bowls and basketball tournaments among others. Trading in financial instruments has also witnessed the use of bets evident by speculations made on such items as share prices and bonds. Spread betting involves making a bet on the movement of financial instrument and it presents a number of advantages.

First, spread betting provides a wide market of trading using one account. This implies that a single account can give an acess to far greater financial markets.

A trade in world indices, individual stocks, commodities, currencies, bonds and even shares is all possible via the use of a single spread betting account. This provides an economical way to trade in the financial instruments as one does not have to open an account for a trade in each of the mentioned items. This explains why the use of spread betting in trading of financial instruments is on the rise.

Spread betting in United Kingdom and some European countries is exempted from tax. The profits individuals realise from the use of spread betting is not taxed. These forms of taxes are the taxes on capital gains and stamp duty which is charged on transfer of ownership of property. This presents an advantage over trading in stocks as their returns are all taxed by the taxman.

The wealthly in society could utilize this advantage as their tax burden will be greatly reduced as compared to traditional trading in the stock market.