Why Spread Bet
Spread Bets, the Financial Spread Bet Information Site
 

Why Spread Bet

Why Spread Bet

Why Spread Bet? There are many positives but there is also one key negative. Because spread betting is a leveraged product you can end up losing more than you initially invest. Of course because it is a leveraged product you can also win more than you initially invest.

We will discuss the many positives in a moment but with spread betting you should always be aware of the aforementioned downside. You should also be aware of some of the simple ways of reducing the risk.

Two important ways of reducing your downside are Stop Loss Orders and Smaller Stakes.

'Stop Loss Orders' and 'Guaranteed Stop Loss Orders' allow you to set the limits on how much you want to risk on each individual trade. Spread betting companies like Financial Spreads automatically apply a Stop Loss to all trades without limiting how much you can win.

It is important to note that Stop Losses are not guaranteed. Your order may be filled at a different level. If you want a Guaranteed Stop Loss that will cost a little more (a wider spread). Both types of Order help you limit your risks and give you peace of mind in volatile markets.


Advert www.FinancialSpreads.com Narrow Spreads, Free Charts and Live Prices.
No Fees, No Commissions, Spread Bet on Shares, Indices, Forex, Commodities Apply Now.

Small stakes. Another way of reducing your risk. Of course smaller stakes mean you will win less but they also limit how much you can lose. You can now open a spread betting account with £50 to £100 and trade with small stakes. With spread betting account from paddy power trader, World Spreads or FinancialSpreads.com you can trade the FTSE 100 from £1 or 1 Euro per point.

Once you understand how to limit your downside it is worth looking the many positives that make spread betting so popular.

Firstly, Buying and Selling. This form of trading offers two-way trading ie you can bet on a market to rise as you would with normal share trading. However it also means you can bet on a market to go down.

Secondly, the Wide Range of Markets. Most spread betting companies offer a wide range of markets. So you can trade on all your normal shares but you can also trade:
  • Indices like the FTSE 100, Dow Jones, Dax etc
  • Commodities like Gold and Crude Oil
  • Forex markets like Euro / Dollar, Dollar / Yen, Pound / Swiss Franc
  • Shares from other countries like the USA, Japan, Ireland, Germany etc
And then there is Value. No fees. There are no broker fees and no commissions on a standard spread betting account. And if you live in the UK your profits are Tax Free, that means no income tax, no capital gains tax and no stamp duty.

Let us not forget the more relaxed trading hours. A number of markets are available to trade outside of Normal Market Hours (note that when you spread bet outside market hours the spreads are often wider).

Overall, provided you control your risks, having a spread betting account is a quick, versatile and convenient way of trading. Of course you must get those risks under control.

"Why Spread Bet" written by RThomas, last updated 24-Dec-2008

Similar articles:

Why Spread Bet, Why Spread Bet >> Once you understand how to limit your downside it is worth looking the many positives that make spread betting so popular. No broker fees, no commissions, no income tax, no capital gains tax and no stamp duty. And then there is...read.


Spread Bet Offers, The latest spread betting offers from Financial Spreads and paddypowertrader...read.


Spread Betting Emails, Free emails with the latest spread betting offers and updates of where you can find the latest narrow spreads...read.


The Spread Betting Website, The spread betting site with daily analysis from the experts plus company reviews, strategies, offers and more...read.


Spread Betting on the Housing Market, Spread Betting on the Housing Market >> If that is the general trend then one option to try to beat the fall is to bet that House Prices will fall. Some of the spread betting companies now offer markets on the Average UK House Price and...read.


Where to Invest During the Credit Crunch, Where to Invest During the Credit Crunch >> How can anyone possibly make a long term investment choice on any stock in the current environment? For very long term players with huge income streams I suppose as long as you keep buying all the way down the curve you should pick the bottom at some point. But...read.


Spread Bet Tips, Spread Bet Tips >> A range of spread betting tips from the pitfalls of spread betting to finding narrow spreads on the key markets, finding free charts and more...read.


Spread Betting Reports, Spread Betting Reports >> A range of trading reports and strategies covering a wide variety of markets with insight from industry professionals...read.


Spread Betting Directory, The spread betting directory...read.


Spread Bet Tools, Details on where you can find free spread trading tools, free chart, free live prices, spread betting explanations, free spread betting platforms...read.






Financial Spread Betting Emails
Free Financial Email: Latest Spread Betting Offers and where to find narrow spreads. Click here to sign up.

Spread Betting Companies

Financial Spreads

GFT

IG Index

paddypowertrader

Spreadex


FinancialSpreads.com - The Financial Spread Betting Website
FinancialSpreads.com - Forex , Commodities, Indices, Equities
Trade the tightest FTSE spreads available² & find a range of benefits at: FinancialSpreads.com

FinancialSpreads.com - tight spreads Constantly tight spreads: eg Brent Crude 5 ticks, Rolling S&P 4 ticks
FinancialSpreads.com - Tax Free Profits (3) Tax Free Profits³
FinancialSpreads.com - £1 per point £1 per point: Start trading £1 per point/tick & an initial deposit of £30
FinancialSpreads.com - Forex, Commodities, Indices, Equities Multiple markets: Forex , Commodities, Indices & Equities
FinancialSpreads.com - The Financial Spread Betting Website


Risk Warning - Spread betting carries a high level of risk to your capital & you may lose more than your initial investment. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seek financial advice where necessary & make sure spread betting meets your investment objectives.


(1) The FTSE Rolling Daily Spread is 1 tick during market hours & 4 ticks out of hours. 1 Tick is defined as a full FTSE point. See our Product Information for more details. (2) The above information is correct at time of writing. (3) Tax Law can change.

FinancialSpreads.com is a trading name of London Capital Group Ltd which is authorised & regulated by the Financial Services Authority (FSA). Registered address: is 4th Floor, 12 Appold Street, London EC2A 2AW. All information correct at time of publication.
 
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.

* Spread betting is tax free in the UK. This tax free status is subject to change and can differ if you pay tax outside the UK.

Home
Spread Bets Daily News
Spread Bets Weekly News
Spread Betting Offers
Financial Spreads
GFT UK
IG Index
paddypowertrader
Spreadex
Spread Betting Reports
Spread Bet Tips
Spread Bet on Crude Oil
Spread Bet on Gold
Spread Bet on Commodities
Spread Bet on Forex
Spread Bet on FTSE 100
Spread Bet on Wall St
Spread Bet on Dax 30
Spread Bet on Shares
Spread Betting Help
Economic Indicators
Spread Bet Emails
Directory