The concept of spread betting is simple. If you think a market is set to rise you 'buy' at the top end of the quote (the offer price), or if you think the market will fall you 'sell' at the bottom of the quote (the bid price).

Your position is a bet: you never actually own the instrument you are 'buying'. The important fact is that when you 'buy' you want the price to go up, and when you 'sell' you want the price to drop.

The difference between the bid and offer prices is known as the 'spread'. The  dealing spread with firms like IGindex is the only charge you pay; there are no fees or commission.

Deals are transacted through the IGindex PureDeal trading platform, a customisable interface which provides quickfire one-click dealing and full account management. Through PureDeal IGindex also offers a full range of free trading tools and charting packages which provide up-to-the minute news and research to help your trading.

The size of the bet which you place through PureDeal is entirely your choice, providing you meet the minimum size for that market. If you 'buy' at £5 per point, for example, this means you make £5 for every point the price goes up and lose £5 for every point it moves down.

Example: 'Buying' Vodafone
Say Vodafone is trading in the market at 166/166.3p. Say the Daily quote for Vodafone stands at 165.8 - 166.5, and you decide to 'buy' £50/point at 166.5, their offer price. This means you will make £50 for every point that their 'sell' (or bid) price rises above 166.5 and lose £50 for every point the bid price falls below 166.5.

The IG index live price for Vodafone updates with every market move throughout the trading day. By mid-afternoon IG's quote has reached 170.5 - 171.1 and you decide to take your profit.

You close your bet by 'selling' £50/point at 170.5, the bid price. You have made (170.5 - 166.5) x £50 = £200. And with no tax to pay!

However, please note that had the price moved against you, you could have lost more than your initial deposit.

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