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First is, if you see that a particular share is in a market and if you think that the price of the share will rise in the future then surely you will try to buy the share at the price which is being offered.  And you will probably bet an amount for the rise of per penny. 

In the same way if you think that the price of a particular share will fall in the future then again you bet an amount which will start at the price which has been bid. So before you actually bet for a share rise or fall, you will be asked about the amount you want to bet.  The amount might start from $5 to $10, and you must be thinking that the amount is too low for you.

But you should not forget that you will win for the rise of every penny if the market is high. And you will lose for every penny if the market is low. So in case you are new in this field then you must not go for the higher bidding as it is too risky. So in short spread betting is a kind of betting which you generally do with the help of a broker. Here with the help of a spread betting system you get the opportunity to do trading over shares, commodities etc, even though you are not the owner of the instrument on which you are trading. Here it’s just a game of speculation over the price of the instrument. 

Difference between spread betting and CFD trading  

In case of CFD trading, the price in which you actually trade is the actual price which is being offered. If you are well aware of the market then you can trade better in CFD trading. In case of spread betting the price is that price which is formulated by the provider, including his percentage of commission. 

One basic disadvantage as well as big difference between spread betting and CFD trading is that the provider of spread betting is the ruler of the market as they fix the price according to their flexibility. This ideally is not right but due to the over competition this happens, but not in case of CFD trading. Incase of CFD you are buying the shares in quantities like 1000 CFD shares but in spread betting you are just buying the movement of the price, say $10 for point.

Another difference is that in CFD you have to pay the commission whereas in spread betting there is no commission. Spread betting contracts matures (usually quarterly) but in CFD trading you can go on for much longer periods without worrying about your contracts rolling over. CFD horizons are bigger as they are used for making investment portfolios, even in mergers also CFD trading is used but this is not done with the spread betting. 

Additionally cfd contracts is a holding in the underlying which entitles to dividends. At the same time CFD contracts are financed and hence will require explicit interest payments. Spread betting contracts have the financing cost built in the price.