Excerpt from: Understanding Spread Betting
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| December 19, 2007 | | Leverage allows you to earn more on your spread bets | One of the main advantages of spread betting is that you can use leverage. This means that you can put forth a stake that is relatively small in relation to the actual position. Basically, you are borrowing a portion of your spread bet amount in order to place a higher bet.
Leverage can allow you to earn more in spread betting with a smaller stake. However, it is important to note that leverage is part of what makes placing spread bets risky: there is also a chance to lose in a magnified way as well as to win.
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