Continuing my read-through of The Naked Trader’s Guide to Spread Betting (as I first mentioned here), I not so long ago read the section containing Robbie’s description of how spread betting companies hedge (or not) your bets in order to control their own exposure and risk. he makes the points that:
- If you’re a good trader and you go long, the spread betting company might go long with you by buying an equivalent number of shares in the market.
- If you’re a bad trader and you go short, the spread betting company might theoretically — but maybe not actually — bet in the opposite direction by buying shares in the market.
Disclaimer: this posting is for general education only; it is not trading advice.