Spreadbetting 2006

They make their money in a few ways.They work on the ''well known fact ''that most traders lose money on shares.This is beyond dispute.
They do not hedge all their stock positions individually but if their book is skewed too much in 1 direction , they will buy /sell future positions , say on the ftse as a hedge.
They also make a lot of money thru charging interest on the long positions their clients take and naturally, they have a lot of clients money which earns them interest as well.
If they have clients whom they find tend to make money they will ''discourage''them by holding their quotes, until prices move before offering the client a worse trade.In addition, they will just out right refuse to give a market quote and will offer some useless quote which they know will not be accepted.If all else fails, they have been known to ask their clients to just move their account.
As for the index traders, that's money for old rope for spreadbetting companies.Even more of these clients lose their money far more quickly.A mug's game in general, indices,IMO.
All said and done, they are a great trading vehicle.