Spread Trading
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A guide to Spread Trading including a comparison of the key financial markets and where you can trade:
Where to Trade?
There are a number of regulated firms and they tend to offer thousands of international markets.
Of course, companies like FinancialSpreads which offer all the normal benefits of spread trading which include; no broker’s fees, no commissions, trading outside market hours, and tax free trading*.
Spread Trading Companies - Account Services Comparison
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| Online Application |
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| Credit Account |
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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
Why Spread Trading?
Spread trading can be beneficial on a number of fronts including easy access to the international financial markets and certain tax based advantages.
1) Spread Trading is Tax Free*
There is no income or capital gains tax and no stamp duty to pay on spread trades.
2) Wide Variety of Markets
There is a large variety of markets on offer. You can speculate on thousands of markets from the popular FTSE 100 Index and Euro / Dollar exchange rate, to the not so popular Wheat, Dollar / Kroner and Interest Rate markets.
3) Closing a Trade to Take a Profit or Limit Losses
Spread trades can be closed early. This can work in two ways. You can close a profitable position in order to guarantee a profit. Conversely you can also close a losing position in order to stop any further losses.
4) Two Way Trading
Unlike traditional share trading, investors can sell a market if they think it will fall.
Spread trading lets you buy and sell, you do not have to speculate on markets to go up.
If your analysis leads you to think that a currency pair like or Pound Sterling/Yen or Euro/US Dollar will go down you can speculate on it to go down.
You can do the same with the shares, stock market indices and commodities markets.
5) Trading Speed
Generally, most trades are filled automatically; you do not have to worry about finding another party wanting the opposing trade. You are speculating on the future price of a particular market and so you are not taking ownership of an asset or stock.
6) No Commissions or Brokers
Spread trading companies do not generally impose commissions or broker's fees.
7) 24 Hour Trading
From an investment point of view, the fact that some markets can be traded 24 hours a day sets spread trading apart from traditional share trading.
The futures floors and stock exchanges might be closed but you can still spread trade on a variety of key markets.
8) Risk Management with a Guaranteed Stop Loss
As discussed above, investing does have its negative side. However, there are steps you can take to reduce your risks. You can add a Guaranteed Stop Loss to your trades.
If a market moves against your position then the stop loss will close your position and prevent you from losing any more funds.
9) Data, Data, Data
Many spread trading companies now offer their clients a wealth of free data. In addition to candlestick charts, certain firms also offer technical analysis and analysis on specific companies and market sectors.
Spread Trading Comparison
Spread Trading Stock Market Index Comparison
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| FTSE 100 Daily - Spread Size |
1 |
2 |
1 |
1 |
1 |
1 |
1 |
1 |
| FTSE 100 Daily - Min Stake |
£1 |
£1 |
£1 |
£2 |
£1 |
£1 |
£1 |
£1 |
| FTSE 100 Future - Spread Size |
4 |
4 |
4 |
6 |
4 |
- |
3 |
4 |
| FTSE 100 Future - Min Stake |
£1 |
£1 |
£1 |
£2 |
£1 |
- |
£1 |
£1 |
| Wall St Daily - Spread Size |
2 |
4 |
2 |
2 |
2 |
4 |
2-4 |
2 |
| Wall St Daily - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
| DAX 30 Daily - Spread Size |
1 |
3 |
1 |
1 |
1 |
2 |
1 |
1 |
| DAX 30 Daily - Min Stake |
£1 |
£1 |
£1 |
£2 |
£1 |
£1 |
£1 |
£1 |
| S&P 500 Daily - Spread Size |
4 |
8 |
4 |
5 |
4 |
5 |
5 |
4 |
| S&P 500 Daily - Min Stake |
£1 |
£1^ |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
| Nasdaq 100 Future - Spread Size |
3 |
4 |
3 |
4 |
3 |
2 |
4 |
3 |
| Nasdaq 100 Future - Min Stake |
£1 |
£1 |
£1 |
£4 |
£1 |
£1 |
£1 |
£1 |
Comparison Notes
Spread Trading Forex Comparison
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| GBP / USD Daily - Spread Size |
2 |
3 |
2 |
3 |
2 |
3 |
2 |
2 |
| GBP / USD Daily - Min Stake |
£1 |
£1 |
£1 |
£0.50 |
£1 |
£1 |
£1 |
£1 |
| GBP / USD Future - Spread Size |
8 |
8 |
8 |
12 |
8 |
- |
- |
8 |
| GBP / USD Future - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
- |
- |
£1 |
| EUR / GBP Daily - Spread Size |
2 |
5 |
2 |
3 |
2 |
2 |
1-3 |
2 |
| EUR / GBP Daily - Min Stake |
£1 |
£1 |
£1 |
£0.50 |
£1 |
£1 |
£1 |
£1 |
| EUR / GBP Future - Spread Size |
6 |
- |
6 |
10 |
6 |
- |
- |
6 |
| EUR / GBP Future - Min Stake |
£1 |
- |
£1 |
£1 |
£1 |
- |
- |
£1 |
| EUR / USD Daily - Spread Size |
1 |
5 |
1 |
2 |
1 |
2 |
1 |
1 |
| EUR / USD Daily - Min Stake |
£1 |
£1 |
£1 |
£0.50 |
£1 |
£1 |
£1 |
£1 |
| EUR / USD Future - Spread Size |
8 |
8 |
8 |
12 |
8 |
- |
3 |
8 |
| EUR / USD Future - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
- |
£1 |
£1 |
| USD / JPY Daily - Spread Size |
2 |
6 |
2 |
3 |
2 |
3 |
1-3 |
2 |
| USD / JPY Daily - Min Stake |
£1 |
£1 |
£1 |
£0.50 |
£1 |
£1 |
£1 |
£1 |
| USD / JPY Future - Spread Size |
8 |
6‡ |
8 |
12 |
8 |
- |
- |
8 |
| USD / JPY Future - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
- |
- |
£1 |
Comparison Notes
Spread Trading Commodities Comparison
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| Gold Daily - Spread Size |
5 |
7 |
5 |
5 |
5 |
5 |
5 |
5 |
| Gold Daily - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
| Gold Future - Spread Size |
8 |
14 |
8 |
7 |
8 |
7 |
7 |
8 |
| Gold Future - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
| Brent Crude Daily - Spread Size |
5† |
6 |
5† |
5 |
5† |
- |
5† |
5† |
| Brent Crude Daily - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
- |
£1 |
£1 |
| Brent Crude Future - Spread Size |
5 |
8 |
5 |
8 |
5 |
- |
5 |
5 |
| Brent Crude Future - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
- |
£1 |
£1 |
| US Crude Oil Daily - Spread Size |
6† |
6 |
6† |
5 |
6† |
6† |
5† |
6† |
| US Crude Oil Daily - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
| US Crude Oil Future - Spread Size |
6 |
8 |
6 |
8 |
6 |
6 |
5 |
6 |
| US Crude Oil Future - Min Stake |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
£1 |
Comparison Notes
How to Trade
The most popular spread trading markets are the FTSE 100, Dax 30 and Dow Jones (usually called ‘Wall Street’ by spread trading companies).
For specific examples see:
Spread Trading Companies
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Financial Spreads
Whether you are an experienced forex or commodities trader or new to spread trading and want to trade on shares or whole stock markets we offer extremely competitive prices through a high quality, reliable and efficient service...Financial Spreads.
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IG Index
IG Index - The UK's leading financial spread trading firm, offering prices in a wide range of indices, FX, commodities and options and thousands of individual shares....IG Index.
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Capital Spreads
With Capital Spreads you get all the normal advantages of Spread Trading: Tax Free Investments*, No Capital Gains Tax*, No brokers fees ...Capital Spreads.
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For more companies and to compare the spreads also see Spread Trading Companies.
Risk Warning: Spread trading 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 Trading' by DB, updated 01-Sep-10
For related pages also see:
Spread Trading, updated 01-Sep-10
A guide to Spread Trading including a comparison of the key financial markets, where to trade and spread trading tips. This is also a...read article.
Financial Trading Directory, updated 01-Sep-10
Who to trade with? It's a tough question. Have a quick look to see who offers the spreads and service to suit you....read article.
Gold Spread Trading, updated 02-Sep-10
Gold Spread Trading - A look at where you can open a Gold spread trading account, where to get live Gold spread trading charts, risk management tips, spread trading examples and...read article.
Crude Oil Spread Trading, updated 02-Sep-10
Crude Oil Spread Trading - A look at where you can open a Crude Oil spread trading account, where to get live Crude Oil spread trading charts, risk management tips, spread trading examples and...read article.
Financial Spread Trading, updated 02-Sep-10
Financial Spread Trading - A look at where you can open a financial spread trading account, where to get live financial spread trading charts, risk management tips, spread trading examples and...read article.
Forex Spread Trading, updated 02-Sep-10
Forex Spread Trading - A look at where you can open a forex spread trading account, where to get live forex charts, forex risk management tips, trading examples and...read article.
Ladbrokes Financial Spreads, updated 17-Jun-10
Ladbrokes Financial Spreads offers investors a range of benefits including Free Guaranteed Stops, Spreads from as low as 1 point and the ability to buy and sell major financial markets, including stock market indices, equities, FX markets, commodities and...read article.
IG Index, updated 26-Aug-10
With an IG Index account you get all the normal benefits of financial spread trading including commission free and tax free trading*. You can also access over 8,000 markets and trade key markets 24 hours a day, 5 days a week. Plus there is...read article.
Financial Spread, updated 16-Aug-10
With Financial Spreads - you get all the normal advantages of Spread Trading like Tax Free* Trading, 0% commissions. You also get tight spreads, the FTSE 100 spread is only 1pt and...read article.
CMC Markets Account, updated 02-Sep-10
With CMC Markets you get all the normal advantages of Spread Trading like Tax Free* Trading with 0% commissions. With a CMC Markets Account you can trade key markets 24 hours a day, 5 days a week. Plus there is...read article.
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Q) Average Trading Results?
A) Get free spread trading tips, offers, price updates, important news and more!
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