All investments carry a certain degree of risk. More often than not, the smaller the risk, the flatter the returns; the bigger the risk, the more dramatic the returns – and the losses.

But with interest rates low, it might be the right time to consider a punt. And one of the most popular forms of gambling is spread bettering.

Spread betting was dreamt up around 25 years ago, as a way to speculate on the future movements in the pride of gold.

This is a high-risk bet, and thus beyond the sweaty palms of Her Majesty’s Treasury.

But do take care. If you follow this path, you could end up is deep trouble. You must watch your bet closely and be able to get out at a moment’s notice if the game turns against you.

If not, Her Majesty might take her pleasure from you after all - when your creditors sue you in court.

Time has moved on, and spread betters can put their money on a range of commodities, bonds, currencies, index rates and even football matches. The key thing is that you are gambling on future events.

The system is very simple. As an example, a spread-betting firm, such as Cantor Index or IG Index, will offer a spread on the future price of a commodity, say, the FTSE 100. The market maker (the firm offering the spread) will offer a spread of £3500-3800 for an agreed date.

If you think the actual price on the future agree date will be higher, you “buy” the price. If you think the price will be lower, you sell. You buy or sell per point. If you think the price will be above 3800, you will buy at anything from £1 to £1000 a point.

In our example, if you bought at 3800 at £10 a point and the market has risen to 3900, you win £10 times 100. That’s £1000. But if you are wrong, and the price is around 3400, you lose £10 for every point below 3800. That’s minus £1000.

The deal here is that, unlike conventional gambling, you can lose far more than your original stake. On the good side, you can cash in your bet at any time, or alter it to reflect your charging opinion.

But the real bonus is that you pay no tax on your winnings.

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