Bid-to-offer spreads are a fact of life in financial markets. You come across them when you buy shares, bonds, currencies and of course every time you open, or close, a spread betting position. So here's a quick reminder about how they work. Remember, although spread betters don't suffer a fixed commission as they would when trading shares say £9.99 per trade you will suffer any spread set by your broker.
Say you are planning to place an 'up' bet on the FTSE 100. You check the price at your online broker and find it is 5308-5310. Don't forget that, as with all other bid to offer spreads, the gap between the two prices represents your broker's potential profit. Also,always remember that a buyer opens a position by taking the price on the right the broker's 'offer'. A seller, betting on falling prices, would enter a trade at the price on the left the broker's 'bid'.
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