With spread betting, the more right your bet, the more you make - if the shares had gone to 35p, your profit would have been 1,000. But equally, the more wrong you are, the more you lose. On down bets, your potential losses are open-ended. However, it is possible to mitigate this risk. This automatically closes out your trading position if losses mount to a pre-set level beyond which you feel uncomfortable.
Bullish investors can use spread betting to gamble on rising markets by opting for an up bet.
The process works in exactly the same way, but in reverse. Many spread betting firms have also branched out into contracts for difference. Most firms will not allow you to deal unless you have at least one year's experience of stock market investment. And the minimum dealing size is considerably higher - on spread betting, you can usually deal in bet sizes of as little as 5, whereas some firms require at least 10,000 to open a CFD account. The choice between spread betting and CFDs depends on your attitude to risk.