Spread betting and binary options are quite similar and can often be confused.  Spread betting, like binary option trading, allows traders to predict financial movement. Both spread betting and binary option trading do not offer ownership stake of the selected asset.  Both forms of trading also include set time period, require a broker and offer trading in commodities, stocks, indices and currency pairs.

When choosing whether to trade in binary options or spread betting the main point of difference between the two is that binary options allow for a predetermined amount of profit or loss whereas spread betting does not.  A binary options trader is aware in advance what the financial loss or gain from trading a particular asset will be.  However in financial spread betting the amount of money that is either lost or gained is determined solely by the price increase or decrease of the particular asset at the end of the expiry time.

Spread betting’s main draw is that the profit a trader stands to gain from a particular trade can be higher than the typical binary option.  However the potential loss in spread betting can also be much higher. In this way, spread betting is similar to more traditional forms of trading. With binary options a trader can control the amount they stand to loseAdd New