One of the big advantages of spread betting is the leverage it offers.

Translated, "leverage" just means that you can make a large profit with a relatively small stake, which isn't the case with ordinary share investment.

Suppose you have £5,000. You could buy shares with that money, and if you did very well you might increase it by 20% over a year to £6,000.

Alternatively, you could use that £5,000 to place a succession of spread bets, and if your judgement was spot on every time, you could triple it, quadruple it or do even better.

Of course, leverage is a double-edged sword. With shares, the worst that can happen to your £5,000 investment is that you lose the lot. With £5,000 of spread bets, your potential losses are not limited to your stake - you could lose many, many times more.

Experienced spread-betters use stop-losses and "limited-risk bets" to limit the downside.