As the FTSE 100 fell 5.5% last year, investors turned to spread betting [http://www.cityindex.co.uk/spread-betting] with the hope of gaining from the falling markets and this has continued in 2012.

As global stock indices fall, savvy investors saw an opportunity as they rushed to short sell stocks and indices in hope of profiting on these falls by spread betting on further misfortune.

Whilst today traders insist that there is money to be made from plummeting stocks as much as rising prices, in truth the tactic can still be somewhat difficult to get your head around, with many investors heads ingrained in the notion that you can only make money in a bull market.

Watching the Market

Only recently have investors been able to speculate more easily on shares, particularly those that are falling. With the arrival of innovative and accessible online trading tools [http://www.cityindex.co.uk/trading-platform/online-trading-platform.aspx] and real-time financial news and charts – speculating has opened up opportunities for ‘going short’ on the market.

Through City Index [http://www.cityindex.co.uk ], investors can access an online trading platform, allowing them to:

• Place trades securely from their computers 24 hours a day
• Access over 12,000 markets including global shares, indices, forex, commodities, bonds and options
• Instantly access real-time financial news and analysis feeds from Dow Jones Newswires
• Access the City Index interactive live charting package which includes a range of technical analysis tools
• Create multiple watch lists to monitor potential future trades

Going Short In a Bear Market

Because spread betting [http://www.cityindex.co.uk/spread-betting/spread-betting-features.aspx] allows you to profit in a falling market by going short and selling, it has proven to be incredibly popular for trading in a bear market, such as this.

If a spread bettor is able to interpret the signs and then react quickly enough, a falling bear market can be every bit as profitable as a rising bull market.

Joshua Raymond, Chief Market Strategist at City Index said “this is what makes spread betting so flexible. No matter which way the market is going, there is always the potential to make a gain.”

Alternatively, traders can open buy positions with the markets at what they perceive to be their lowest point to capitalise on the market recovering and profiting as prices rise.

Summary

Investors who see an opportunity to profit from a fall in global stock indices such as the Dow Jones index or FTSE 100, could profit from this by short selling these markets through spread betting. However, spread betting [