Financial Spread Betting News Information Tips

OJ Samson asked:




After you have placed some bets and have won, it is time to take your profit. You can do this through a bank, you can withdraw your money on the card or through a number of other methods.

It is very important to take into consideration the taxes or commissions retained by a certain spread betting company when you choose who to work with. The best spread betting companies don’t retain any commissions and you don’t have to pay any taxes, neither when you deposit money nor when you withdraw it. Withdrawal taxes vary depending on the bookmaker you choose, but, in most of the cases, these taxes cannot be higher than five percent of the total value. If this tax is higher than five percent, you should definitely not choose that company.

Next, you have to register to the company you have chosen. Open an account, which is very easy to do. You can open an account online, for which you only have to click a button and you then start to fill in the form the company puts at your disposal. After you have filled it in with personal data, you just have to choose the user name and the password of your account.

Then, you have to make a deposit into your account. The best spread betting companies offer a wide range of opportunities when it comes to deposing money into your account. You can certainly deposit money using a card a bank payment. Also, a lot of such companies accept transfers through Moneybookers, for instance. Card deposits are your best options because they are very fast and you can start betting really fast, while payments through the bank take a few days.

Courtney

Jason Woodruff asked:




Football Spread betting can be a volatile betting medium but also very profitable. The most important aspect to understand is that the more convincingly your bet wins the greater the winnings; this works the other way too, if you’re incorrect by a wide margin then your losses will be heavier. I will explain using an example for the England vs Ukraine total goals market.

The spread betting firm sets the spread for the total goals market, if you think they are right then don’t bet, if you think they are wrong then bet…it really is as simple as that! There’s 2 ways to bet, you either buy above or sell below.

Example, they set the spread for England vs Ukraine in the total goals market as 4, which means they expect there to be 4 goals in the game. If you think it will be a 0-0 then you would sell below, if you think it would be a 4-4 thriller, then you buy above; if you think the game will finish with 4 goals then you would’nt bet because you agree with the way the spread has been set.

The thing to remember is that if you sell below and the game finished 6-3 then you could owe a fair bit of money, depending on how the spread has been set.

You should now understand the mechanics of the bet, your next goal is to understand your liability.

Your liability is set by how wrong you are, so if you’re way off then you will owe more than if you’re only slightly wrong, you take the amount you’re wrong by and multiply it by your stake.

So if total goals is set to 4 and you have bought below, and the game finishes 3-3 then you take the spread and subtract the result, which would give you -2. So say you bought under for £100 then you would do the folowing maths:

100 x -2 = -200

So you would lose £200!

This works the other way round too, so if the game finished 1-0 then you would win…

100 x +3 = £300

I hope the idea of spread betting is less daunting now and you feel like you’ve got another tool in your punting arsenal to bash those bookies with. There are a wide range of markets, so whether you prefer to bet on correct scores, time of the first goal or the total number of corners, there’s always an online spread betting firm willing to gamble with you. Out of the current pool of spread betting firms, I’m happy to recommend IG Index, Extrabet and Paddy Power Trader.



Antonio

Peter Jones asked:




Soft Commodities

You can spread bet on the future price of Soft Commodities (Softs) like Coffee and Soybeans just like you can spread bet on the future price of Crude Oil, Gold, the FTSE 100 etc. Soft Commodity prices can rapidly increase on the back of high oil prices due to increased transport and energy costs. Prices are also affected by adverse weather conditions and political policies that force farmers to grow certain types of crop. But if you are spread betting on Softs what about the facts?

 

10 Facts for Spread Betting on Soft Commodities

 





One key factor affecting most Softs is the exchange rate. Because soft commodities are normally traded in US Dollars that means Soft futures prices will be affected by the exchange rates. If there are no other particular influences on supply and demand then if the Dollar goes down against the Euro, the commodities price (in Dollars) will go up and vice versa. This is not always guaranteed but it is an important correlation to take into account.





 





Some of the main soft commodities that you can trade with the major spread betting companies are: Cocoa, Coffee, Corn, Lean Hogs, Live Cattle, Oats, Soybean, Soybean Meal, Soybean Oil, Wheat and Sugar. Note Soybean (US) and Soya bean (UK)





 





Commodities are often split into their main types eg Coffee is traded as higher quality Arabica (or Coffee ‘C’) and lower quality Robusta





 





As mentioned above, Softs are generally traded in Dollars, one of the exceptions is Cocoa (London) which is traded in Sterling





 





When spread betting on the future price of Softs the settlement date of your futures trade is normally in 1-3 months. Eg for wheat the settlement months are listed as March, May, July, September and December. The Wheat September market closed on 20 August and the Wheat December market closes on 19 November





 





You can spread bet on all commodities including softs tax free* and commission free with companies like FinancialSpreads.com and IG Index





 





As with all spread bets you trade in units eg with the Wheat (London) market you trade in £ per tonne, Coffee Robusta is $ per tonne.





 

The current spread for Coffee Robusta is $2196 – $2204. That means you can spread bet on Coffee to close lower than $2196 per tonne or higher than $2204 per tonne.

 

If you were betting £2 per dollar and the price of a tonne moves $20 then your profit / loss would alter by (£2 per dollar) x $20 = £40.

 

 





Although the units the commodities are traded in on the exchanges is fixed, when spread betting on commodities you trade in the currency that suits you eg Pounds per unit, Euros per unit or Dollars per unit





 

Eg Coffee Arabica is traded in 0.01cents / lb (pound).

 

Therefore you could bet 5 euros per 0.01 cent that Arabica goes up or down. If the price / lb then moved by 0.15 cents then your profit or loss would alter by 5 Euros per 0.01 cent x 15 = 75 Euros.

 

Likewise you could bet £8 per 0.01 cent that Arabica goes up or down. If the price / lb then moved by 0.20 cents then your profit or loss would alter by £8 per 0.01 cent x 20 = £160.

 

 





If you are still unsure how the mechanism works then companies like FinancialSpreads.com offer free demo accounts with a virtual £10,000. There you can trade Coffee, Corn, Equities, Forex etc on a copy of their trading platform





 





Note that Interest Rate changes can have knock on affects. Of course we all know the past performance of a market does not always predict the future performance. However in 2008 when the USA was lowering Interest Rates that caused weakness in the Dollar. That therefore increased the price of the soft commodities that were priced in USD. The lesson here is simple. Beware of interest rate changes when you are trading commodities





 

Spread bets carry a high level of risk to your money and may not suit all forms of investor. You can lose more than your initial investment so make sure you only speculate with capital that you can afford to lose. Likewise make sure you understand the risks involved and seek independent financial advice where necessary.

 

* Note that tax law can change and can differ if you live outside the UK



Shawn

Holly Franklin asked:




Financial spread betting is easier to understand than many believe. This simple ten point guide offers you the tools to enter the financial spread betting market with more understanding. It can be applied to currency trading too.

1. Practice makes perfect

If you are a novice then the world of financial spread betting is full of dangers. I would suggest opening up a “demo” account. There are plenty of companies that will allow you to do this. They usually give you up to $10,000 to play trade with. Get comfortable and then go to real money.

2. When opening up a real account

Companies will let you set up for as little as $200. I would suggest setting up your first account with a minimum of $1,000. This will allow you to absorb more losses than with $200 or $500, keep your betting size to small fraction. I suggest that 2% is an ideal maximum risk but with a small account 5% is generally figure used.

3. Start Slow

The UK FTSE 100 is a good place to begin. The blue chip stocks are even better as they are more liquid. The US stock market and Forex (Foreign Exchange) is generally too volatile for a beginner.

4. Increasing your profits

The best time to bet is when you believe the market is going to move sharply either up or down. This is done only by studying the market and noticing trends and practicing also helps. There is software to buy that can help you predict the market.

5. Never Average Down

This means simply never increase you position when the market moves against you. Although if you are up then increasing you position can be advisable; a good example would be when you open at $1 a point on the FTSE at 6000, stop loss at 5900. The market moves to 6100. That means a profit of $100. In this example you buy another 50p and moving your stop to 6000. Should the market move against you, you will break even on the $1 point per trade but be $50 up on the 50p per point trade. (If this doesn’t seem to make sense just read again slowly and it will become clearer).

6. Daily Bets

If you decide to bet daily make sure that you have access to the all information constantly. For the beginner it is easy to spot general trends that take place over days rather than hours. Daily betting can lead to small losses accumulating into large sums. The desire to cover you losses becomes greater.

7. When betting

To make sure that you are covered always use firms that give firm quotes on the screen. Use proper regulated firms. There are unscrupulous people out there who will not think twice about taking your money.

8. Telephone betting

If you close a deal by phone then state your requirements firmly and accurately (ask them to repeat back to make sure). Check you contract note carefully and never ever expect advice as it is against the law.

9. Minimising your losses

When placing your bet always use a stop loss (maybe even a guaranteed stop loss) and perhaps a limit order. This will then protect you if the market suddenly turns against you.

10. Profits

In the first six months don’t expect to make a profit. You will be refining your technique in the real world environment. Please be strict with yourself and bank even small profits rather than betting them again for bigger gain. It will take a long time before you know technical analysis very well. The first six months will also be about finding out about yourself and if you can deal with losing money. If you cannot handle the fear of losing money then step away.

Financial betting can be confusing and scary. If you feel overwhelmed then just sit back watch the markets and wait until you feel safe to stick your toe back in the water. When you start to master the intricacies of financial spread betting then it can be a rewarding and even fun experience.



Dean

James McLean asked:




More and more people are interested with Financial Spread Betting. Most of them seem to be successful in this betting field however there are still others who don’t get to profit that much from this. If you are interested with online trading, you will be able to find spread betting companies which is mostly located in United Kingdom. But before you engage with this activity, there are a few factors that you should consider.

Since you will be exercising your betting skills in this field, it is necessary for you to know when is the right time to bet and when you should not take the risk at all. It is necessary that you know your capacity when it comes to betting and do not bet more than what you are capable of losing. Betting is a game of chance and many people do lose money in this field. If you would be able to come across company that make use of software systems that are built for a stop-loss account, you can take advantage of this because, this type of system will let you set a limit on the money that you will be earning.

Now, if you are a novice when it comes to Financial Spread Betting, it is essential that you take a course training program that will allow you to learn more about it and practice betting as well. More often companies that you will come across on your search provides this kind of training, or you may opt to look for independent training programs that will suit you as well as guide you throughout the whole system. You may want to look into the following companies which provides such helpful training programs such as City index, CMCMarkets and IGIndex. These companies are known world wide when it comes to spread betting, so they can definitely give you enough training for this.

The initial requirements that you will be needing if you are to engage in Financial Spread Betting will include having to join and pay for a membership fee without having to worry about taxes; you should also own a PC that is capable of running browsers such as IE7, Safari or Firefox; Adobe Flash Player should be installed on your computer as well as Java; and thereafter you are now ready for signing up and start betting.

Vicki

Alex Green asked:




Financial spread betting is a tax-free way to play and invest in the markets (all profits are 100% tax-free). One of it’s main attractions especially for new traders is that all global markets can be traded with very small amounts of money, so making spread betting a great tool for learning about the markets. Here are 5 tips that will help you make more money.

1. Watch Those Dealing Costs

Spread bet brokers charge no commissions but there are costs involved. They will always quote a wider bid-offer spread than on traditional markets. For example, on Gold futures the bid offer will normally be $0.10 or $569 bid and £569.10 offered. But the spread bet broker will normally quote around $0.50 or $568.80 at £569.30.

These extra costs can have a dramatic effect on profitability over time especially if the trader likes to do a lot of short term trades. Discount costs at your own peril because what happens to many short term traders is they make money gross but lose it net when costs are taken into account. One way to combat this is to cut back on the amount of trades you do by cherry picking the higher probability ones.

2. Use Charts But Keep Your Analysis Simple

Whether you agree with charting and technical analysis is not so important because over 80% of the market does. So if you know the majority of market participants are looking at charts you should keep an eye on them, know how your enemy is thinking so to speak!

Things to look out for are when major chart levels are breached such as the 50 or 200 day moving average as well as price breakouts from important highs or lows.

But the best traders tend to try and keep their charting simple. Anyone who has access to a £300 personal computer can now number crunch with 1001 different indicators. The use of all these indicators has been massively diluted over the years. Instead, try and focus on the shape and character of the chart, does it look bullish/bearish etc and are there any major levels of support or resistance coming up. If so, watching how the market reacts and trades around these levels can give great clues as to the future direction.

3. Don’t Be Afraid To Use Spread Bets For Holding Long Term Positions

Today, everyone seems to be obsessed with trying to trade every move in the market. But with spread betting because of the higher costs involved in short term trading it’s often a better tactic to focus on trading longer term moves.

Concentrating on the longer term moves can have a three-fold benefit. Firstly, the costs become somewhat irrelevant, secondly it’s often less hard to latch on to longer term moves and trends than catch all the short term ups and downs. And thirdly, you don’t have to waste time following the market all the time. The author for example once held a Gold position using spread bets for over a year.

4. Use Dummy Accounts When First Starting Out

Most if not all of the spread bet firms will offer ‘dummy’ accounts for new clients just starting out. Practice accounts are excellent training tools to not only introduce people to spread betting but also how to trade all the different markets as well as how to correctly place orders.

Then after a month or so deposit a small amount of money in an account and trade very small positions. As you begin to gain more confidence in your own abilities, strengths and weaknesses add more money to the account over time. A lot of money has been lost by new clients depositing large sums of money and then blowing large portions of it because they didn’t fully understand the game.

Be smart, look longer term and ease yourself and your trading capital into the markets.

5. Don’t Trade What You Don’t Know Or Fully Understand

You may understand the stockmarket and how to make money but this doesn’t mean you’ll be able to carry this knowledge and understanding to different markets with altogether different characteristics.

Commodities especially those grown in the ground are a classic example of this. Weather, drought, shortages and other fundamental reasons can drastically alter the price of the markets sometimes within a few minutes or perhaps with the market opening 10% higher or lower the following day. So if you want to trade these types of markets do a little bit of research into what can move them as well as studying historical charts to see just how the price can move if things get hairy.

A good rule for all of these commodities is that when they enter what’s called a ‘weather market’ or the time of the year when excess rain, sun or frost can seriously effect the crop automatically decrease the size of your trading positions.

Summary

Trading is as much about skill as experience, in fact they most probably feed off each other. This is why it’s so important to approach the goal of making money in the spread betting world from a position of knowledge and strength. Hopefully this article has given you some tips to go forward and increase the value of your trading account.



Harvey

S Dawkins asked:




Have you ever considered using financial spread betting instead of buying shares? There are many good reasons why you should think about this option. This form of investing offers one of the easiest ways to bet on downward moving markets. When you are spread betting, you are not buying shares, what you are doing is betting on which way you think your selected market will move either up or down.

Most likely if you are new to this type of market, the word ‘betting’ may have put you off a bit. Let’s explain a bit, most of us hear the word betting and think of a bookie who gives out odds, and then you would place your wager, either you win based on the odds and the bet, or you lose. With spread betting, you are betting against someone else who has the opposite opinion as you. For ever winner there is a loser.

In order to make a spread bet, one must place the through a spread-bet dealer. This is not like a ‘bookie’, he is just an intermediary. If you are ready to start, you would get your package which would have all information you needed. When you bet, your stake will be multiplied by each point the market moves for or against you, this will determine your win or loss.

Many people are using this form of trading quite a bit more these days; it is also catching up to CFD trading. One of the many reasons that investors are using this form of trading is for the simple fact that all profits are stamp duty free. There is also better control over loss management by utilizing limiting order and stop losses. There are also no dealing commissions which have to be paid.

Why is financial spread betting stamp duty free? This is actually a simple question to answer, traders are not actually transferring any asset, and instead they are buying and selling the price movements from within the underlying equity. Also, the profits are exempt from the Capital Gains Tax, and this is due to it being in the gaming law sector.

Financial spread betting is not always something a beginner should start into, however, if you are willing to learn and maybe take a few hits, it might be good to start. Experienced traders who are active in the market and those whom understand the risks associated with margins and gearing are typically who spread betting appeal to.

Joann

Nicholas Dockerty asked:




Financial binary bets are simple ‘yes/no’ propositions that allow you to take a position on the financial markets over a fixed and a relatively short period of time. The provider will give you a two-way price and ask whether you think that ‘yes’ the price will end up higher (you buy) or ‘no’ it will be lower (you sell) at the specified time from this point.

For example, say you were wanting to place a binary bet on the direction of the FTSE 100 index over a 20-minute period. It has been a volatile day on the UK’s indices and at this point it’s difficult to call it either way. The provider would offer you a price, say 48-52, so if you thought the price was likely to end up higher after 20 minutes from this point you would ‘buy’ at 52 and if you thought it likely to fall you would ‘sell’ at 48.

It’s important to note that all binary bets have only two possible outcomes: they either settle at 0 or 100, which makes them a limited risk bet.

It’s up to you how much you stake per point of course. So, in this example you decide that ?5 per point is how much you can afford to risk, and decide that the FTSE will fall. If your judgement is correct you would win 48 x ?5 = ?240 (the difference between 48 and 0), similarly, if incorrect you would lose 48 x ?5 = ?240 (the difference between 52 and 100).

Binary bets have a broad appeal; their relative simplicity appeals to newcomers to financial spread betting while the quick and exciting nature of binary bets also appeals to more experienced spread bettors.

Binary spread betting can be one of the simplest and most accessible ways of taking your position in the global markets. The range of markets you can choose from is extensive including indices, commodities and forex.

More information…

It is important to note that financial spread betting can result in losses that exceed your initial deposit, so please make sure you understand the risks involved.

Marvin