Spread Betting
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You'll find quite a few plus points to financial spread betting, yet there is also a primary drawback.
Because spread betting is a margined trading product it does involve a high level of risk to your capital. Losing trades may exceed the original sum that you invested. That said, there are a few basic strategies you can use to reduce your risks.
Two important options for lowering your potential downside are:
Guaranteed Stop Loss Orders - Guaranteed Stop Orders allow you to set restrictions on how much you want to risk on a particular trade. For more details also see Guaranteed Stop Loss.
Spread Betting with Smaller Stakes - Employing smaller stakes means that you will make smaller trading profits, nevertheless they also restrict how much money you can lose. You can actually open a spread betting account with a £200-£300 deposit and spread bet with smaller stake sizes. With a Financial Spreads account you can speculate on the FTSE 100 from just £1 or €1 per point.
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Spread Betting - The Advantages |
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Once you understand how you can limit your downside it is worth taking a look at the benefits which make spread betting an increasingly popular way to trade the markets.
1) To start with, a primary advantage is the potential of low cost trading. With this form of trading there aren't any brokers’ fees and trading is commission-free. Note that if you roll trades over to the next day then there is often a small overnight fee, for details see rolling daily spread betting.
2) The second advantage is that your profits are tax-free*; there's no income tax or capital gains tax.
3) Another very useful benefit is that you can buy and sell the markets. Spread betting offers two-way trading, ie investors can trade on a market to rise, as you would with typical stocks and shares trading. However it also means that you can take a position on a market to fall.
4) Most spread betting firms let you to trade a wide range of markets. You can speculate on:
- Stock Market Indices like the FTSE 100 Index, Dow Jones (aka Wall St), S&P 500, DAX 30 etc.
- Stocks and Shares like all the normal UK and US listed equities as well as equities from other countries such as Germany, France, Holland, South Africa, India etc.
- Forex Rates such as GBP/USD, EUR/USD, EUR/GBP, EUR/JPY, EUR/CHF etc.
- Commodity Markets including gold, Brent crude oil, US crude oil, sugar and coffee.
5) Longer trading hours are another key advantage. You can often trade a good number of popular markets like the FTSE 100, Dow, GBP/USD, gold and crude oil after the normal markets have closed. Also see 24 hour spread betting.
In summary, provided that you take steps to control the risks, spread betting can be a quick and convenient tool for taking short-term positions on the markets.
Don’t forget, spread betting may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
Spread Betting Companies
There is a wide range of spread betting company reviews on this site. If you’d like to read a review simply look at the left hand navigation menu and click on the relevant company.
We also compare the spread widths and minimum stakes across many of the leading companies, for details see: spread betting companies comparison.
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| Deposit Account |
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| Stop Loss Available |
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| Automatic Stop Loss |
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| 24 Hour Trading |
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| FSA Authorised and Regulated |
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| Candlestick Charts |
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Comparison Notes
Spread Betting Information
We have a huge range of spread betting information on CleanFinancial.com as well as daily trading news. Popular pages include:
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
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Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'Spread Betting' by DB, updated 23-May-12
For related pages also see:
Spread Betting Companies, updated 23-May-12
Spread Betting Companies - review and compare the services and spread widths from some of the leading Spread Betting Companies...read article: Spread Betting Companies.
Spread Betting Offers, updated 23-May-12
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Spread Betting Account, updated 23-May-12
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Spread Betting Newsletter, updated 23-May-12
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Financial Spread Betting, updated 17-May-12
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Spread Betting Firms, updated 17-May-12
Spread Betting Firms - Where to spread bet? There is a range of firms to choose from. We have compared the services, spreads and minimum stakes for some of the most popular...read article: Spread Betting Firms.
Spread Betting UK, updated 17-May-12
UK Spread Betting. When trading in the UK many people will want the key benefits of spread betting and well as UK facing companies. Below you will find both...read article: Spread Betting UK.
LMAX Mobile Trading, updated 16-May-12
LMAX, the CFD trading exchange has released its first mobile application, LMAX Trader. LMAX Trader enables clients to trade CFDs on the move via an easy to navigate interface, allowing for...read article: LMAX Mobile Trading.
LMAX, updated 16-May-12
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A New Year Gift from Clean Financial, updated 02-Jan-09
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Financial Spread Betting June 2008, updated 06-Jun-08
Spread Betting market trading update: The banking sector took it on the nose once again yesterday and HBOS is now 55p below the LOWEST point on the day of the bear rumour which caused so many headlines back in March. Barclays has experienced nineteen negative trading sessions in the last twenty and you could now pick up...read article: Financial Spread Betting June 2008.
Financial Spread Bet May 2008, updated 23-May-08
Spread Betting market trading update: This is likely to result in a double squeeze on retail spending through the remainder of this year. That, I fear, is likely to leave those retailers on highly leveraged debt levels in something of a pickle. Banks are not exactly...read article: Financial Spread Bet May 2008.
Financial Trading May 2008, updated 09-May-08
Spread Betting market trading update: As mentioned several times over the past few days the FTSE is struggling to overcome the 6250 resistance. Although we have closed at or around the level several times traders have shied away from buying above the line. The pressure still appears to be very much on the upside but we are vulnerable at the current level to some bad piece of news. Mind you, markets do seem to have finally got shot of the...read article: Financial Trading May 2008.
Financial Trading April 2008, updated 25-Apr-08
Spread Betting market trading update: We are still stuck just under the 6100 level this morning but the bulls seem to have the best of it at the moment. Every time we get up to this level it seems as though the break out is imminent only for traders to run...read article: Financial Trading April 2008.
Financial Spread Bets April 2008, updated 11-Apr-08
Spread Betting market news: FinancialSpreads.com clients have been building up short positions in indices over the past few days so they will be glad to see the market dipping back below the 6000 level this morning. This morning the market has wiped out only half of the gain it made yesterday and whilst this cannot be considered as profit taking, it indicates the ...read article: Financial Spread Bets April 2008.
Markets March Spread Trading, updated 28-Mar-08
Spread Betting markets: Markets went up down sideways etc but in the end closed pretty much mixed. Europe up about a percent and the US and Americas down a percent. Asia has joined Europe but not enough to influence the open this...read article: Markets March Spread Trading.
Markets March Spread Betting, updated 14-Mar-08
Spread Betting market information: If the moves by the US do in fact work then this should help across the board. Many punters will be shy of getting too enthusiastic as we have seen these rallies too often over the past few...read article: Markets March Spread Betting.
Markets February Spread Trading, updated 29-Feb-08
Spread Betting market information: Today we are looking at further opening falls with early the FTSE spread trading at 5945 - 5946 another 15 points lower. The volumes on the exchanges remains weak which is causing such heavy moves as market makers swiftly adjust prices. In conversation with some of the quoting brokers it appears that they are running...read article: Markets February Spread Trading.
Real-time Spread Betting Prices and Charts, updated 15-Feb-08
Spread Betting pricing information: The banking sector, which has been pretty hard hit anyway, took a triple whammy this week: UBS reported almost unbelievable sub prime/credit losses, Bradford and Bingley reminded us that there are...read article: Real-time Spread Betting Prices and Charts.
UK Markets Spread Trading, updated 01-Feb-08
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Spread Betting on Markets, updated 18-Jan-08
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Spread Betting Trading Online, updated 21-Dec-07
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Spread Betting Futures Trading, updated 07-Dec-07
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Spread Betting Broker, updated 23-Nov-07
Where to find free Spread Betting Brokers plus regular Spread Betting financial trading news as well as the most popular Spread Betting questions answered....read article: Spread Betting Broker.
Spread Betting Platform, updated 09-Nov-07
Where to find free Spread Betting Platforms plus updated Spread Betting trading news as well as the most popular Spread Betting queries answered....read article: Spread Betting Platform.
Spread Betting Software, updated 26-Oct-07
Where to find free Spread Betting Software information plus updated Spread Betting trading news as well as the most popular Spread Betting queries answered....read article: Spread Betting Software.
Compare Spread Betting Companies in the UK, updated 27-Jul-07
We provide you free online information on the UK financial spread betting market. Financial spread betting allows you to bet on the key financial markets. Spread betting can give you an edge because the profits that you make from financial spread betting...read article: Compare Spread Betting Companies in the UK.
Compare UK Spread Betting Companies, updated 05-Dec-08
Compare the width of the key spreads offered by the spread betting companies. Does your company offer the narrowest spreads?...read article: Compare UK Spread Betting Companies.
Financial Spread Betting Articles, updated 12-May-09
Hundreds of spread betting articles from the latest news to spread betting tips to how to spread bet to where to find the latest prices, free charts and...read article: Financial Spread Betting Articles.
Easter Trading Hours, updated 13-Apr-09
Easter Financial Spread Betting Hours. Ensure you are not get caught out. The Financial Spreads opening hours provide an example of what you can expect. However please...read article: Easter Trading Hours.
Trading Hours Presidents Day, updated 18-Feb-08
A quick look at the President's Day trading hours. FinancialSpreads.com's opening hours provide an example of when you can expect the markets to be open. Please check directly with other spread betting brokers...read article: Trading Hours Presidents Day.
Holiday Trading Hours, updated 31-Dec-09
A quick look at the seasonal trading hours. FinancialSpreads.com's festive opening hours provide an example of when you can expect the markets to be open. Please check directly with other spread betting providers...read article: Holiday Trading Hours.
May Bank Holiday Spread Betting Hours, updated 04-May-09
With the European May Bank Holiday and UK Bank Holiday make sure you do not get caught out. The Financial Spreads opening hours provide an example of what you can expect...read article: May Bank Holiday Spread Betting Hours.
Spread Betting Search Engine, updated 10-May-12
Spread betting search engine and CleanFinancial.com site search and...read article: Spread Betting Search Engine.
Spread Betting Comparison, updated 10-May-12
Spread Betting Comparison Notes - details on the prices and services available....read article: Spread Betting Comparison.
Financial Trading Email, updated 08-Mar-10
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Financial Spread Betting, updated 23-May-12
The financial spread betting and trading website - free spread trading news, tips and strategies, spread betting company reviews, price comparison, important account options and...read article: Financial Spread Betting.
Daily Spread Betting, updated 23-May-12
Daily Spread Betting - a look at what is happing in the markets today - quick headlines, major economic releases and company announcements...read article: Daily Spread Betting.
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Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more!
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