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Spread Betting

Posted By Marcus Holland On Friday, November 2nd, 2012 With 0 Comments

Spread betting is one of the most popular ways to speculate on the financial markets. It is extremely versatile and provides access to a vast array of markets including gold, forex, shares and even complete indices.  Spread betting can also be one of the most cost effective ways to trade thanks to the tax savings is allows in a number of jurisdictions. Please read our simple guide, it can help save your…Money, Time & Stress!

Gambling or Investing?
History of Spread Trading (The Origins)
Differences between Spread Betting and Share Dealing
Similarities between Spread Betting and Share Dealing
Making Money Not Storing Wealth
Is Spread Betting Dangerous?
What is Spread Betting?

Trading Timescales and Styles
Day Trading
Swing Trading
Position Trading
Fundamental Investing and Technical Trading

What is Financial Spread Betting?
Popular and Legal Form of Trading
How to Make Money Spread Betting
The Advantages and the Risks
A Spread Betting Example
Margin Trading
Margin Calls
Orders
OCOs and Contingent Orders

Markets You can Trade
Shares
AIM and Small Cap Stocks
Stock Indices
– – FTSE Spread Betting
Commodities
Currencies
Interest Rates and Bonds
Practicalities: Which Markets are Best to Trade?

Beginners Guide
Comparing Companies
Opening a Spread Betting Account
Anatomy of a Trading Screen

Putting it all Together
Rolling Bets
Futures Bets
Trading Styles
Trading Psychology

Guaranteed Stop Orders
Trailing Stop Orders
Opening Orders Orders
Charts
Mobile Trading

Spread Betting versus CFDs

Tricks of the Trade
Averaging Down
Pyramiding
Making Whipsaw Profits
Treatment of Dividends
Your Trading Plan
Stop Loss Strategies

Money and Risk Management
Managing Risk
Leverage
Money at Risk
Trading Mistakes

Identifying Trading Opportunities
Using Chart Patterns to Forecast Price Movement
Trends and Support and Resistance Levels
Bottom Fishing
Trend Following
Resistance becomes Support
Moving Average Crossovers
Trading the News

Top Tips for Making More Profitable Trades

My Rules
Trading Tips (1 to 7)
Trading Tips (8 to 14)
Top 10 Trading Mistakes
Trading Rules when trading the FTSE

Demise of the Desktop?
Trading with an iPad

Useful Terms

Top 2 Spread Betting Companies

Pepperstone

Pepperstone

Unique Advantages – Spread Betting or CFDs on MT4, MT5 and cTrader!

Pepperstone was established in 2010 when it established an operation in Australia. Pepperstone launched in the UK in 2016 and today they have many European clients. The European operation trades in accordance with the regulatory principles set down by the European Securities and Markets Authority and the UK FCA.

Highlights

  • Deep Interbank Liquidity with very tight spreads!.
  • Scalpers are welcome.
  • EAs and Hedging is allowed.

Visit Pepperstone here.

Disclaimer: Spread Betting and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.6% of retail investor accounts lose money when trading Spread Bets or CFDs with this provider. You should consider whether you understand how Spread Betting and CFDs work and whether you can afford to take the high risk of losing your money.

 

Bux Markets

Bux Markets

Unique Advantages – Variable Margin (Control Your Leverage)

Bux Markets is a fast growing spread betting and CFD provider. We love the fact that Bux Markets only charge interest on the ‘borrowed’ amount (unlike other providers who charge you on the full amount including the amount you put up as margin) and that they pass on 100% of the announced dividends net of withholding tax (unlike other providers who may pay just 80% of dividends). With Bux Markets you can trade on thousands of different markets including shares, indices and commodities.

VISIT Bux Markets

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.9% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

What is Spread Betting?

Financial spread betting (also known as spread trading) is an exciting and fast growing way of speculating on the financial markets.  The outcome of the trade is determined by how accurate a trade is, rather than whether you correctly bet on whether a particular market rose or fell.  This makes is an entirely different entity to some other forms of trading such as binary options and what you would find through a bookmaker.

Advantages of Spread Betting

There are a number of benefits to using spread betting as a method of investing or trading over many of the other options available on the market.  These include:

Leverage

Leverage (also known as gearing) is a way for traders to gain high exposure to a market with a relatively small sum of money.  Many spread betting companies allow their clients to trade some markets with just 1% of a trade’s nominal value.  Leverage is one of the biggest attractions to spread betting for a lot of people as it allows them to make considerably larger sums of money than they would otherwise be able to.  Of course the opposite can also be true if a market moves against you.

Range of Markets

The number of tradable markets available through spread betting accounts is truly staggering market leader; IG Index provides access to over 10,000 markets including shares, currency pairs, commodities, interest rates and much more.

Risk Management tools

Spread betting companies provide a number of handy tools that can be used to limit the risk involved with trading and maximise and profits that are realised.  The following are available through most trading platforms:

  • Stop Loss.  The stop loss is probably the most important tool that can be used to manage your trades and should be used alongside the vast majority of positions you open.  If for example you are trading a market at £10 a point and the maximum loss you are willing to incur is £100, you could set a stop loss 10 points away from the sell price.  If the market went against you
  • Guaranteed stop loss.  During times of turbulence, it is quite common for a market to ‘gap’ meaning a price will move substantially in the blink of an eye.  In the event that this happens, a simple stop loss might not be enough as it doesn’t have the time to close your position at the price you set.  In this case you might want to consider a guaranteed stop loss.  The guaranteed stop loss can be a likened to a stop loss with insurance.  No matter how much the price of an underlying asset moves, your loss will be limited to the price you set.
  • Limit order.  A limit order is most commonly used to open a position if the price of a market moves to a more favourable level.

How to Open a Spread Bet

Perhaps the easiest way to explain how to spread bet is to use an example.  The following is a step by step guide on how to place a trade through the IG Index platform:

Step 1

Decide which one of the many markets you are looking to trade.

Opening a spread bet 1

 Step 2

Click on the market, say the FTSE 100 index and decide on how much you want to trade per point.  There are other options you can choose from here such as whether you would like to set stop loss or limit order but we are going to keep this example as simple as possible.

 Opening a spread bet 2

 Do you thin think the price of your chosen market is going to go up or down? Click sell if you think that it’s going to decrease, and buy if you think it will increase.

 Opening a spread bet 3

That’s it!  Your trade has now been placed and your job is now monitoring the price and to choose when you want to exit the trade.

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