History of Financial Spread Betting

The spread betting industry is more than 30 years old, and it has come a long way from the early days when it was an extracurricular activity practiced by share dealers and other City traders. Spread betting combines the old practice of market trading with the modern technology of the internet so that individuals may actively participate in the global financial markets, with less initial capital required and opportunities in rising and falling markets.

By the early 1980s, firms dedicated to spread betting had been established and the industry obtained official recognition and approval within the U.K., achieving its regulatory status following the introduction of the Financial Services Act of 1986. The Financial Services Act began to take effect in April 1988 and required organizations to meet strict capital and training guidelines while also providing rules regarding unbiased advice, product disclosure and customer agreements.

During the 1990s, the financial spread betting industry started to expand rapidly as many private investors began to embrace the genre as a cost-effective, yet simple and convenient method for backing their judgment in the global financial markets.

In 1997, as part of the U.K. financial regulatory reforms, an independent, non-governmental organization was created in the U.K. called the Financial Services Authority (FSA). Today, the FSA supervises and monitors the trading activity of exchanges, settlement houses and spread betting dealers like GFT Global Markets.

The spread betting industry continues to grow each year, due to the market’s unique benefits (click here for a full list of benefits) and the major advances in high-speed telecommunications and software that leverages online technologies.

Many traders have used financial spread betting for protecting investment portfolios against adverse market movements or simply for purposes of pure speculation. Recent estimates of people actively spread betting in the U.K., financial and otherwise, exceeds hundreds of thousands of people.

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*Tax laws can change. GFT Global Markets does not offer tax or legal advice. A professional advisor should be sought if you need legal or tax advice.

Financial Spread Bets are a leveraged product and therefore may not be suitable for all investors. Financial Spread Bets carry a high degree of risk to your capital and it is possible to lose more than your initial investment or credit allocation as well as any variation margin that you may be required to deposit from time to time. You should only speculate with money that you can afford to lose. Please ensure that you fully understand the risks involved and seek independent advice if necessary and prior to entering into such transactions.

Click here to read the full risk warning.