Financial Spread Betting – what is it and how can you get involved?
Here at portfolio-magazine we aim to take a closer look at this type of investment trading.
Spread Betting
Spread betting is a highly-paced, exciting and ever-changing way to guess the financial markets. Essentially a form of betting or gambling, financial spread betting allows the investor to gain the direction the market will take on a chosen product. Spread Betting is essentially derivatives trading similar to CFDs trading. However, it is cheaper as there are no commission costs. Like CFDs trading there is no stamp duty. A financial spread betting position is usually closed at the end of each day which means no interest must be paid. When choosing a spread betting broker, look to see what spread they offer. Make sure they are regulated by the FSA in the UK – brokers must adhere by strict guidelines. While it is similar to gambling, financial spread betting is not a game – it is a financial derivative product. Financial spread betting is a cheap way to invest money but it is extremely high risk. If you lose on a position, you may be subject to substantial losses.
IG Index – Spread Betting with a Large Broker
IG Index is part of IG Markets, who also offer Forex trading. This means they have a good knowledge and understanding of the financial market. IG Index offer market analysis which is really useful if you want to gain background information and build up your experience levels. Most traders will tell you it is essential to know your market and products before getting involved. IG Index may be a good place to start for newcomers as they offer seminars to get you started. They also offer a demo account which means traders can practise with virtual funds before getting involved in the real market. They offer EUR/USD for just 1 pip and you can start betting from 10p per point. GBP/USD is from 2 pips. Try the education guide or the Get Started area on the IG Index website. IG Index also offer mobile dealing so you can place bets wherever you are! Make sure you make yourself fully aware of the risks before committing your money to financial spread betting.
Capital Spreads – a Leading Financial Spread Betting Broker
Capital Spreads is a well-known spread betting broker based in the UK. It is officially listed as a Financial Services organisation and is one of the leading companies of its kind. Capital Spreads aim to make you aware of the risks in financial spread betting – when visiting their website, a pop-up window explains the level of risk and urges you to be aware of these before investing money in this area. Indeed, they are right to say that traders should only invest as much as they are able to afford to lose. There are plenty of markets offered by Capital Spreads and automatic stop-losses. You can open a demo account if you want to practise first, and there are free educational tools. The minimum account size is zero and minimum trade size is 100p per point. Overall the service here is good and it’s worth mentioning the team are friendly and easy to communicate with. They are also multilingual.
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