bet spreads

The History of Spread Betting1970s : 1980s : 1990s : The Future?
The history and development of financial spread betting can be divided into three parts, each spanning a previous decade.
The 1970s - The Seeds of Spread Betting Are Sown
There is no denying that in the UK we are partial to a flutter. Betting on the horses and other sporting events has been prevalent for hundreds of years, and while some argue that the financial markets are one giant casino, there’s no denying that they make an attractive market place for speculation.
In the mid 1970s, due to the Government’s policy of not levying tax on betting winnings, betting on the financial markets started to look an attractive and natural proposition to certain entrepreneurs and bookmakers.
Stuart Wheeler, who founded one of the largest Spread Betting companies, went into business offering prices on widely followed markets, such as the FT All share Index (no FTSE 100 index in those days), Gold and the US Dollar. Also around this time the famous bookmaker, Joe Coral introduced prices on Gold and the US Dow Jones index, which 25 years ago was hard for speculators to get exposure to.
But Spread Betting was in its infancy and the only people that understood it and who wanted to trade were the professionals working within London’s famous Square Mile, the City. In those days with little technology all the business and price quoting was done over the telephone, and it is hard to imagine that the spread bet dealers were rushed off their feet with business.
But the seeds of Spread Betting were firmly sown, and the small band of active traders started to grow. What was really needed was publicity, the best being stories of quick and large profits which in the case of spread betting were tax free. However, in order to generate these kind of spectacular profits you need a large and spectacular move, and something was bubbling in them far off hills - GOLD.
The Gold Price Boom Puts Spread Betting On The Map
Up until 1975 Gold had been trading at well under $100 an ounce. Trade was dull and boring and the only real speculators that traded it were those connected to the industry. But, due to certain political and economic policies around the world, Gold broke through the significant $100 level and started to head higher.
More and more momentum was created in sustaining the move, and with inflation rising rapidly all it needed was a spark to ignite the whole Gold complex. That spark came in the form of the Iran-Iraq war. The Gold market exploded into a parabolic upside move with prices eventually topping around $850 an ounce in January 1980.
Never had so much money been made so quickly by speculators on the right side of this trade, and many of them had bought Gold using the new 'tool' of the City, Spread Bets. The talk and chatter of Spread Betting around the pubs, bars and restaurants of the City was hard to avoid especially as the windfalls were all 100% Tax Free.