In spread betting the investor has a large range of markets to select from. In this article we will discuss the most common range of markets spread bettors use.

Given the complexity and diversity of financial markets, there are numerous alternatives available to traders. Amongst those alternatives, spread betting has become an increasingly popular instrument for speculative trading in the financial markets. With the increase in popularity, this derivative offers the investor a wide range of underlying products and markets. Having said that, most spread betting brokers will provide the investor a wide range of underlying markets.

What markets are available to trade using spread bets?

The stock market is the market most commonly used by spread bettors. However, an increasing number of brokers are proving traders with the opportunity to use spread bets on other asset classes such as commodities, forex, and so forth. Some of the commonly used asset classes while spread betting are as follows:

• Shares

One of the most common and popular forms of spread betting is on shares; which are traded on the various stock exchanges. The trader has the option to place a spread bet on shares which are traded on multiple stock exchanges. These include those listed on exchanges in the UK, US, Europe, Australia, New Zealand and Asia.

• Indices

Spread bets are also available on popular stock indices across the globe. It is now possible for traders to place a spread bet with their brokers on the value of indices such as; FTSE 100, DAX 30, S&P 500, Dow 30, Nikkei 225 and ASX 200, and many more.

• Forex

Brokers also allow traders to place spread bets on forex pairs; with the underlying being any major currency pair such as; Sterling (Pound), US Dollar, Yen, Euro, Swiss Franc, Canadian and Australian dollars. The most commonly traded currency pairs using spread bets include EUR/USD, USD/JPY, GBP/USD, EUR/GBP and more.

• Metals

Precious metals including Silver, Gold, Palladium, Copper and Platinum are also available for trade via financial spread betting. During extreme market turmoil, many investors will spread bet in precious metals, as they feel it is a less risky option during times of volatility.

• Commodities

Commodities offer the speculative trader another viable option. The trader can trade in commodities such as crude oil, natural gas, corn, sugar etc.  using spread betting as an instrument.

• Bonds

Bond traders can also use spread bets to bet on the yields of government securities of various countries. These include US, UK, Germany, Australia, and so forth. The trader, in this case, will place his bets on the yields of the bonds instead of the price of said bonds.

• Interest rates

Interest rates can also be traded using spread bets. A trader can use this either as a trading or as a hedging option. The commonly traded interest rates using spread bets are Libor, Euribor, EuroDollar.

• Sectors

It is also possible to make sector-specific bets using the instrument of spread betting. In this case, the underlying is formed using a basket of stocks that belong to a particular sector. The most commonly traded sectors used for spread betting are banks, pharmaceuticals, mining and real estate.

• Options

The investor can trade on other derivative products known as options (call/put). In this case, the underlying is another derivative product which allows the underlying to be traded at a later (future) date. We should state that this form of spread betting should only be used by them most experienced traders.

Spread betting allows the speculative investor to trade in a wide range of markets making it extremely convenient to customise their trade to their own specifications.