Would You Consider Fixed Odds to Be Gambling and Spread Betting – Futures to Be Trading?
Of course not, however there is an awful lot of snobbery towards those that choose to use fixed odds or binary bets for their trading purposes.
In one conversation with a respected trader and analyst, I mentioned that Elm Trader were going to be offering fixed odds products, the reply came back well that’s just gambling! 918kiss
I wish now I had followed up and asked why but in hindsight it would not have mattered as they came from a spread betting / futures background and probably felt that fixed odds was the same as betting on the 2.30 at Ascot.
From our point of view and in IOHO any product that involves risking money on the financial markets that does not involve a plan of how to get into the market and how to get out again is gambling and anything that does is trading.
The vast majority of people actually gamble on the markets simply because they do not adopt a strategy and stick to it. The people who remain either do trade with a clear strategy or do for a while whilst it is working and then give up and move on to the next best thing.
The fact is that fixed odds and binary bets are a far safer way to trade for newbie traders and even those with more experience are often preferred.
So what are Fixed odds / binary bets all about?
Financial Fixed-odds / binary bets are a relatively new way to trade the World’s Financial Markets and enjoys some key advantages over other more familiar products.
In their simplest form Fixed odds / binary bets offer anyone the opportunity to place trades / bets on movements of the Financial Markets.
They are called “fixed-odds / binary bets ” because they pay a fixed amount (or nothing) on expiry, depending on whether or not the trade / bet is successful.
‘Easy to use, highly profitable and you cannot lose more than the amount agreed’
When you buy a fixed-odds / binary bet, you are entitled to a payout, which is a fixed multiple of the amount you have staked. If the bet is successful, you will profit by the agreed amount. Before any bet is placed, you will know the entire possible downside as well as the exact possible profit.
Therefore there are no worries over placing stop losses or losing more than you expected. In addition to this another feature with many fixed odds trades / bets is that during the life of the trade / bet, it will retain a value and this allows you the option to sell back the trade should the trade not work out the way you expect.
‘More flexible allowing you to win in rising, falling and even sideways markets’
Fixed-odds trading varies from “traditional” trading by allowing far greater flexibility.
In more conventional types of trading you decide on the market direction by buying a market or selling it and you can then only profit if the price rises or falls from your entry point. With fixed-odds betting, however, you can profit in many other ways, such as predicting that the market price will close above a certain price that you enter or close below a certain price.
There are also bets where you can trade or bet that the price won’t touch a certain level over a given time period, or that it will break out of a given trading range within a specified time. It allows you to profit in rising, falling and even sideways markets.
‘Tax Free Profits’
A further advantage of fixed-odds betting in the UK is that profits are currently tax free.
Contact Elm Trader for expert, ethical advice on how you can use binary trading to profit from an increasingly popular profitable strategy.