A lot of people don't realise that pricing the trade is the most vital part of making a successful fixed odds bet.
BetOnMarkets offers you a price based on the calculated odds of your forecast being correct. When trading you should also estimate the probability of whether or not your prediction is correct. Your aim is to seek out ‘value prices’ ie where your estimate of ‘the probability of something happening’ is higher than the probability predicted by BetOnMarkets.
For example, you might think that the FTSE 100 has a 50/50 chance of hitting 5900 before the end of the year which equates to a 100% return. If a fixed odds firm, such as BetOnMarkets offers you a 150% return, there is value in this trade.
The way to higher profits using financial fixed odds trading is to gain an edge. If you believe the market will collapse, there may be no edge if the chances of a collapse are already priced in to the trade: The percentage return will be respectively low.
The aim, therefore, isn't necessarily to always predict the market direction correctly: Market-beating profits come from identifying opportunities whereby the percentage return offered is high in comparison to your estimated probability that your bet is correct.
Please Note: Financial fixed-odds can become addictive. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'Pricing a Financial Fixed Odds Trade' by DB, updated 03-Nov-10
For related pages also see:
BetOnMarkets, updated 11-May-12
It is always useful to have a financial fixed odds account in addition to your spread betting account. It's worth taking a look at the award winning BetOnMarkets who...read article. BetOnMarkets Offer, updated 11-May-12
Details of the latest BetOnMarkets new account offer. Open a financial fixed-odds account with BetOnMarkets, enter the promotional code of CF-BOM and...read article. BetOnMarkets Financial Markets, updated 11-May-12
BetOnMarkets offer a range of financial fixed odds bets, including the FTSE 100, US and UK Shares, FX see for more details...read article. Financial Fixed Odds Trading, updated 02-Nov-10
Financial fixed odds trading on the financial markets allows you to speculate on a wide variety of markets, with the knowledge of how much you could...read article. New Fixed Odds Equities Markets, updated 29-Apr-09
Whilst there is a wide array of Forex and Indices markets at BetOnMarkets it is good to see they are expanding their range of equities. 5 new...read article. Fixed-Odds Trading plus GBP100 Offer, updated 28-Apr-09
Whilst we normally concentrate on spread betting we have often found that having a financial fixed-odds account can be a useful tool.Naturally the bets are structured in a slightly different way. For example there are...read article. Weekend Financial Trading and the Random Walk, updated 26-Nov-10
Where to trade at the weekends when the markets are closed? One option is the Random Walk Index...read article. Pricing a Financial Fixed Odds Trade, updated 03-Nov-10
A lot of people don't realise that pricing the trade is the most vital part of making a successful fixed odds bet. BetOnMarkets offers you a price based on the...read article. Financial Fixed Odds - Money Management, updated 04-Nov-10
Money management is somewhat different for fixed odds trading than it is with other forms of trading. With other types of trading, much of the skill is in monitoring...read article. Financial Fixed Odds: Key Technical Set-Ups, updated 05-Nov-10
Understanding whether a market is likely to continue a trend, stagnate or reverse is vital for succeeding in financial fixed odds trading. There are many ways of...read article. Financial Fixed Odds: Applying Technical Set-ups, updated 08-Nov-10
Certain trades are better applied in specific situations based on the trend and volatility so you should be aware of big up coming announcements like Interest Rates and...read article.
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more! All Free - Click here!
Risk Warning:
Please note that spread betting and CFD trading carry a high level of risk to your capital. You can lose more than your initial deposit. These products may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.
