The term ‘Stock market’ is a well exploited one and most of the times, all we hear is about indices falling so badly that it will take forever to recover. While a lot of people are scared that they may never be able to succeed in the stock market there is a considerable number of people who are making a whole lot of money investing and trading in the stock market. Investing and trading can be considered as two different traits of that of the typical player in the stock market. Well, what is the difference? Investors look at long-term return on investment, and they will only invest in a company’s shares if they think they will get regular returns from the company’s performance over time.
Trading, on the other hand, can either be short or long-term. While, for a lot of people, this is the main source of income, there are quite a lot of people who trade in the stock market in addition to their primary work in order to make some extra money from. Obviously then the stock market has great money-making potential. Trading can be of two types: cash trading and margin trading, which also includes financial spread betting.
The primary difference between these two is that with financial spread betting, you pay a small margin amount and then start trading or betting whereas with cash trading, you pay the entire amount for which you’d like to trade. This means that with financial spread betting, you have an advantage. However, there are also risks associated with it, which is why people do not get involved in it unless you know in and out of what you’re dealing with. While it does include a learning curve, if you’re serious about getting involved with financial spread betting, it’s definitely worth learning about the system before you step in.