Spread betting – Curious to try?
Posted by | Posted in Day Trading | Posted on 17-07-2009
Have you heard the term spread betting and wondered what it is all about? Financial spread betting allows you, as the investor, to bet on whether the price of a financial instrument will rise or fall, and this is done without using a stockbroker. The benefit of not using a stockbroker is you don’t have to pay a commission fee. With spread betting, the contract is just between you as the investor, and the spread betting company.
So perhaps you’re eager to have a try at spread betting but not sure how to get started? Firstly, contrary to common believe, spread betting is for everyone. It is not just for the full-time investor, it is for the everyday punter as well. If you’ve never spread bet before, don’t be put off.
This article takes a look at how to get started with spread betting, what it is all about, and why it is popular. Spread betting has become increasingly popular in recent years, so much so its now one of the UK’s most popular trading methods. There are more than 150,000 people now partaking in this form of day trading. What attracts people to spread betting? There’s more than one reason. For one, spread betting offers a tax-free way to make money. However this also means that losses are not tax-deductable.
Secondly, to start spread betting you don’t need a lot of capital, you can start to trade with as little as £100 on deposit and you can use as little as 1p to bet on the price movement of shares. Having said that, you should never bet with money that you can not afford to lose.
These were just a couple of the advantages of spread betting, there’s certainly plenty more. Now its time to look at which company to use. It is highly recommended undertaking some research into the various companies. It is advisable to sign up with a company that offers seminars like how to spread bet. Its crucial to know as much as you can about what is financial spread betting? before starting.
Three of the biggest spread betting companies are City Index, CMC Markets and IG Index. These three companies offer trading courses. At CMC Markets, there are different courses from the more advanced spread betting courses to the courses for beginners. The training at CMC Markets has real-life strategies and covers the foundation of Foreign Exchange. Ashraf Laidi, Chief Market Strategist at CMC Markets hosts the education courses at CMC Markets.
IG Index, the longest-running spread betting company offers a range of free work shops, including online seminars, office seminars, and they also offer a six-week TradeSense educational programme which is their own comprehensive course covering everything you need to know about spread betting. David Jones, the Chief Market Strategist runs the seminars at IG Index.
City Index also offers guides to training, demo accounts and seminars as well. The best way to choose a company is to go through their websites, look at their training material and then make a decision.
If you’re new to trading, it is highly recommended to open a demo account first before signing up for a live trading account and depositing funds. This gives you the chance to see exactly how spread betting works, as demo accounts look exactly like a live trading account. This is a great idea if you’re spread betting forex or any market.
As with all trading and investment, there is an element of risk involved and if the market moves in the opposite direction to your bet, you may lose your money. Remember the golden rule, don’t bet with money you can’t afford to lose.
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