>> 100 points lower?>> Britain's financial watchdog is cracking down on one form of gambling after finding more than 80% of punters who use spread-betting products lose money, taking a hit to the wallet of an average 2,000 pounds each.>> How can so many people lose so much money consistently over several years?
>> Reuters' Huw Jones explains how spread betting works.>> Basically, you're betting on which way a share price is gonna move, so you think it's gonna go higher or lower, you take a bet on that. But the thing is, just for a small amount of money, you can have a bet that is 200 times the amount of that money, so the potential losses are enormous.
>> But the Financial Conduct Authority says many customers don't understand those risks. The watchdog unveiling a host of proposed rule changes on Tuesday.>> First of all, there's a ban on so-called bonuses. These companies have been offering these bonuses for people to sign up. Also, they're splitting the market into two.
One so-called unsophisticated where there'll be a very strict cap on how much they can bet at any given time. With a slightly higher cap on the more sophisticated investors. Though, let's face it, even these sophisticated investors have been losing money consistently over years.>> The announcement hitting the sector hard, knocking almost a third of the value of some major listed brokers.
The proposals will now go out for consultation, but they're expected to be in place by the middle of next year.