About 6 years ago I started to notice that certain friends of mine had quit their jobs but continued to live very luxurious lifestyles - seemingly without doing very much. I thought they must just be using up their savings until I discovered they were all making a fantastic living by spending just a few hours a week doing something I had never heard of before - financial spread betting.

More and more people are now becoming familiar with the phrase financial spread betting. Once, the sole preserve of City Whiz kids or sophisticated gamblers, financial spread betting is now gaining in popularity as a great way to earn a very sizeable tax-free income without the risk of losing the shirt off your back!

So why is financial spread betting becoming so popular?

Well, with a bit of understanding and practice, ordinary people, with no prior experience, can earn enormous sums whilst controlling their risks and limiting their losses. You do not even need a stockbroker or a city dealing account to do get involved. An on-line account is very simple to open and anyone with web access can do it.

Spread betting, aka futures trading, is easy to understand if you stick to a simple index like the FTSE 100 or the DOW JONES.

In basic terms, this is how it works:

When you buy a future you take a position on what you think

the index (e.g. the FTSE 100, or the DOW ) will be at some future

date - e.g. June 2005. Lets say the FTSE is currently at 5200 and you think it will rise over the next three months as 'terrorist fever' abates. You would buy the June FTSE at (say) 10 per point. For every point it rises, you make 10. If it goes

up 100 points, you make 1000. Of course, if you get it wrong and the index falls by fifty points (say), you lose 500.00.

You need of course to be very aware of the risks before you get involved. As with any investment or business, you can lose money. If, by nature, you are a timid, cautious person, then it is definitely not for you. But if you have some money to play with, and arent risk adverse, then financial spread betting is the one of the best possible ways you can make a great deal of money completely tax free and there are clever ways of limiting your losses so you never lose more than you can afford.

Unlike most businesses, it is possible to get involved with an absolute minimal outlay and take a position without buying a single thing. You do have to back your position with a certain amount of cash, but this is insurance money, NOT stake money.

The best thing is you can try it for free without any risk at all. You can dry trade with monopoly money until you get a feel for how it works and are confident enough to start using real money.

Financial spread betting has become so popular primarily because of the relationship between risk and capital. It is highly leveraged and you can make huge profits with only a limited amount

of capital and risk. The fact that there is (unlike with most investments) no stamp duty or tax also helps make it extremely attractive.

So if you are of the right temperament, spread betting can be a very lucrative way of making an amazing income in your spare time.

But be warned, if used recklessly or without the correct knowledge it can result in large losses.