To make money from the stock market you don't necessarily have to invest and actually buy and trade shares - instead you can bet on how shares will perform.

If you're new to spread betting then you'll need an account that helps you get to grips with it quickly and easily, here's how.

What is spread betting?

As with all wagers, spread betting is where you speculate about what the outcome of an event will be and try to make a profit by guessing correctly.

As it is based on results and performance, it is theoretically possible to spread bet on virtually any event that has an outcome.

Financial spread betting explained

In contrast with investing directly in stocks and shares, where you always want your chosen investments to do well, with spread betting it's a case of guessing how stocks and shares will perform.

This opens up greater potential for profit, as you can make money from markets going down as well as up.

With this also comes increased risk however, as bets can lose you money on stocks that perform better than you expected and increase in value if you guessed they'd go down.

You are essentially betting on a future result which might not happen, so you should be prepared to take risks if you decide to try spread betting.

UK spread betting beginner platforms

Spread betting companies are aware of the risks and hesitation among new investors, so to draw you in they offer financial spread betting for beginners accounts.

These are similar to standard spread betting accounts, but are tailored to offer you the chance to gain experience of speculating on real markets without putting a lot of your money on the line.

Instead they let you make low minimum stakes (the smallest amount a company will let you bet with if you open an account) meaning that you can bet with pennies, rather than pounds.

While this does limit the amount of profit you can make, it also means you probably won't lose a fortune if a stock you took a punt on goes against your prediction.

Limiting your risk

Companies that offer spread betting for beginners may also allow you to put a safeguard in place to limit the amount of risk you're exposed to when trading, commonly called a stop loss order.

This is a way of automatically limiting any losses you might incur from bad bets, say if the value of the shares you wagered on drop below a certain level.

While this can help save you from losing large sums making them useful if you're new to spread betting, stop loss orders do have potential drawbacks, so it's important that you research how they work before you put any in place.

Compare spread betting strategies for beginners

To get the best account for you it's important that you make a beginner's spread betting comparison to size up what each company is offering.

Not all of them will offer low stake betting and some have minimum levels that are higher than others, so you should rule out any that are asking for significant wagers from the start if you're not comfortable betting a lot.

Most spread betting businesses will allow you to trade across a wide range of major markets and rolling daily spreads, such as the FTSE 100, Dow Jones and DAX 30, so that you're not limited to only a few markets.

You may choose a market to invest in based on the spread being offered, depending on whether it's a tight or wide margin, as well as the companies included in each market and how familiar you are with them. It would be risky to bet on the performance of a foreign market which listed businesses you'd never heard of before...

If you're looking for a beginner's guide to spread betting it's a good idea to check out our guide Before you begin spread betting.