Where spread betting profits come from?

Hi There

Apologies for such a basic question but where do spread betting profits come from? Is it from other traders holding a losing position, the spread-betting company or from a market maker?

Like other forms of gambling, does the house always win in the long-run or is it possible to supplement your income from it?

Many Thanks
Baby

SB firms ideally want profits to come from Sreads.

and believe it or not, they usually ideally want you to keep winning. Because that would generate more spreads for them....

but its nature...and i dont want to get dragged into a long convo about the winning/losing side of the business.

When I trade long at £10 a tick and the market moves in my favour, yielding £1000 profit for that trade. Where did that £1000 come from?

santa dropped it down the chimney..

no, theres somebody on the other end of your trade whose pockets have become smaller.

The SB firms also take positions to hedge against your trades most of the times.

One of the guys that works for a SB firm answered this question somewhere. I think the answer was that they hedge the balance of the trades in the underlying market, but not each individual trade. (e.g. if 100 people are long £1 a point, and 50 people are short £1 a point, they will hedge for the remaining £50 a point in the market itself)

basicly da traders at da SB compny hav to hussle to cover ur wins u get bruv

SB ppl b sellin dope to cover dere losses n line dem selves up as hookers

and if u lose, den u will one day find urself sellin dope..n maybe reppin the hooker status
iz a cold world bruv

I think your cred died 'homeboy'. Perhaps its time to **** off and die?

In a market place where you buy to and sell from other traders, you win when they lose and they lose when you win. The market maker charges you for bringing you to the place where there are other traders. SB companies are not a market place where you interact with other traders. So, the money you win comes from the SB's pocket who make their money from losing clients, which is almost all of them.

With the very low cost they provide on some instruments, they are clearly counting on their clients losing or they would go bust.