Financial Spread Betting News Information Tips

JackWalters asked:




Spread betting allows you to dip your toe into the heady waters of financial trading, without getting your feet too wet. Basically it’s a form of financial gambling (spread bets can be placed on anything, including horse racing and the stock exchange). With financial spreads, bets are placed on the movement of currency pairs on the foreign exchange, either at a point in the future or at point of trade.

There are various forms of spread betting, some more complex than others, but they basically mirror normal forex trading. The difference is, you place a stake rather than purchase the actually currencies involved, so there is no heavy outlay.

Briefly, you as the trader speculate on the direction of one or more currency movements, relative to each other; for example GB Pound versus US Dollar, or US Dollar against the Euro. You specify the amount you want to bet on each point movement. Profits and losses are made by calculating the difference between the opening and closing prices, multiplied by your stake value.

There are certain rules in spread betting, though. Unlike the bookies, you can’t just go in and bet 50p on the outcome of the Japanese Yen and the US dollar in the 3.30. Financial spreads are margined, meaning you deposit a percentage – typically 10% – of the overall value of the trade so you still have an initial financial outlay. However, this is far less than you would pay by buying the full value of the spreads, giving you a much larger position overall.



Michelle

Shristy Chandran asked:




It is a paradox where some of the people have gone to riches while some have turned to rags due to the financial spread betting. There are many factors that have to be considered before you switch onto this type of financial betting. As this type of betting is highly risky one needs to put in a very small amount that one can afford to lose. There are several companies that provide such type of betting facilities and they also have stop loss account into their system. Due to this feature a person will be able to put a cap on the amount of loss that he has suffered and stop it from losing any further. If you are a novice in financial spread betting it is important for you to get training about how to plan strategies, how to invest money and such other factors under the guidance of a person who is having good experience in this field.

Companies also provide training programs for the purpose of financial spread betting. You can take up the 6 week course offered by so many companies to understand the basics of commodities foreign exchange and equities. One more aspect that is needed in order to gain profits in this type of field is that you should know to gamble people. The main advantage of financial spread betting is that only the membership fee is paid by you and not other fees and taxes. For a trade of this kind to be undertaken one has to necessarily have their PC supportive of browsers such as Internet explorer 7 Mozilla Firefox and Safari. The software programs like Java and adobe flash player will be needed to undertake the trade in any system to take the positions. One can take a position in the betting in two ways like fixed odd and bet placed. The topmost benefit that one has with a financial spread betting is to the ability to choose a bet at any point as per ones requirement effortlessly. There are so many markets in which one can take up the trades like currencies interest rates indices trading bonds commodities house prices.

When one undertakes the financial spread betting they do not have to pay any taxes on the profits earnedapart from exemption from stamp duty. It is enough if one can put in a starting capital of about 100 pounds in this type of financial spread betting. A small quantity trading does not attract any commission or penalty. Another major plus point is that in this kind of betting there is no loss of ones currency. You can even earn money on the online platforms as well.



Oscar

Shristy Chandran asked:




You will always receive that brows-raised look when you say “financial spread betting.It is always related to dubiousness when you think of betting. You may imagine, Mafia-like transactions, old world capitalism, the financial incentives of casino, the lights of Vegas, and, of course, everything that a millionaire has the right to worry about. But whatever you are hearing on the sides, here is one thing I know for sure: Financial spread betting remains to be one of the most exciting, best paying market, and definitely most attractive option for almost anyone who has the heart to bear the excitement of playing for the market.

All financial spread betting guides will tell you one basic thing and that is that it is a form of trade with a twist. Once you have placed your bet, you continue to hold that position and expect that the market will play according to what you have predicted. Almost everyone thinks of financial spread betting as sophisticated, highly technical game of minds whereas most investors will tell you that the rules of financial spread betting is based on the same principles as followed by other investment forms and in everyday gambling.

However what makes financial spread betting so exciting? The tax free tag makes it more attractive. Do you really know how to make money from financial spread betting without your big brother asking for his share? Look at what spread betting guides are telling you; financial spread betting is really all about, well, betting and not trade. What you get is tax free capital gains. Stamp duty, what about it? Still free since you are not essentially purchasing shares when you’re “trading”. Asking for more? Financial spread betting is more than simple tax free profit.

Financial spread betting can be started with a nominal sum instead of your life savings. This system lets one start in a small scale and that is the perfect scenario in this trade. Seemed great since you don’t really have a stash full of cash? This very encouraging fact about financial spread betting is without risks. You will actually face more loss if your investment is less.

Loss is unavoidable in the scenario, while you can always trigger stop loss to reduce the risk. Spread betting is essentially about gambling whatever you invest. You have to try to get the correct bet all the time. If the market predicts differently than you than you loose . Remember not to put more than you can afford in this like in any gambling.



Rose

Steve S H asked:




Financial spread betting is a financial action that primarily involves speculation by traders of movements of share groups or indices, applicable currencies and commodities including wheat, gold and oil I Financial spread betting involves monetary deeds where its main concerns are tentative actions of people from different arenas of finance like indices, currencies, and valuable articles of trade such as gold, oil etc.One of the main appeals of spread betting is the degree of potential windfall, which is not present in other forms of trading I Unlike other types of dealing, the key aspect of spread betting lies in the extent of probable windfall.In its strictest definition, it is considered as another form of gambling, and profits generated from the trading activity are tax-free I As it is considered nothing more than sheer gambling it’s quite obvious that its gains are also non-taxable.

Financial spread betting offers other benefits when applied in the trading of stocks, foreign currencies, commodities and indices I In the application of stocks, foreign currencies, commodities and indices financial spread betting has many things to offer.

For one, there are no dealing cost involved in the activity since the book maker earn commissions from any quoted spread that makes a good hit I Usually, the creator of a booking charges fees from quotes that seem to be interesting, thereby dealing price runs negative.

The action that transpires when one is engaged in financial spread betting is usually fast-paced and fluid I Financial spread betting is such that its actions come to light when one gets involved in it, so much so that its speed is gradually accentuated.This is one type of trading in the financial market that offers flexibility since traders are able to get a piece of the action without having to get hold of the underlying financial instruments I One of the benefits of it’s action is it is quite elastic in nature and hence, the traders feel free to grab the deed without the help of any monetary implement. Regardless of the direction that the market goes, you can still take a position based on speculation and gain exposure to this market shifts for just a fraction of the stake you will normally make when trading directly I Once you are into it and boldly prepare yourself to take liabilities, no body can stop you from gaining profits and coming into the spotlight of the ever changing market scenario.

If you decide to “go long” on the price, your returns will also rise with any upward shift in prices. Conversely, you stand to lose financially, if you opt to “go long” on the price and the subject stock price takes a dive I when the sensex is higher it is profitable to quote high and stretch the quoted price whereas if the stock takes a topsy turvy turn then its beneficial to quote low.With financial spread betting, you are able to gain instant access and make a position on the shifts in prices of various financial markets in Europe, Far East and in the U.S I Another avenue that financial spread betting opens for you, is in the market prices in the finance sectors of demographic areas like Europe, the Far and USA.

Before you engage in financial spread betting, it is essential that you fully understand the potential benefits and risks that are involved in such highly speculative financial activity I Financial spread betting calls for an in-depth understanding of the nitty-gritty of latent advantages along with the risks associated with it. Financial experts define spread betting as a marginal investment instrument. I Those who specialize in forecasting finance, look at spread betting as a tool to be used in marginal investment opportunities. This means that you are only required to deposit a minimal percentage of the total value of your financial position. I  It implies that if you are to make a marginal investment, what you need to do is, put up a nominal percent of the overall worth of your current pecuniary situation. Your profitability quotient is significantly higher compared to the traditional investment instrument where you have to make a full payment of the total value of your position. I The chances to make profits from your end, stand greater than the regular mode of investment wherein they want you to invest all that you have in, staking your position. The margin normally ranges from 10% to 20% of the entire value of your position. I Usually, the amount that they calculate is 10-20 percent of your position’s total value.

On the other side of the continuum, financial spread betting exposes you to a higher degree of risk. In fact, you can lose more than your initial investment if you really get hit big time with a particular position that you take. I When you get into financial spread betting, you can become the victim of a greater risk level. Chances of losing your hard-earned money are there if your position gets struck with a certain position that might seem lucrative to you in the beginning. You have to remember that your action is primarily speculative, and the chances of getting “burned” are significantly high. I Something you cannot afford to forget or overlook is that, in the initial period, your approach is, naturally, exploratory, which can lead you to heavy loss.Thus, this high-risk financial game is not designed for the “faint-hearted” and should not be perceived as open game. I Therefore, the financial activities are not for those who lack perseverance and you must never look at it as a cakewalk.

You have to make sure that you fully understand the implication of whatever position you plan to make. I You must first determine the outcome that your position can lead to once you are on board. A critical aspect of your investment decision shall involve careful consideration of the risk involved. I You have to have a very good understanding and you must also evaluate the chances of risks associated with your actions. It is also essential that you gain access to independent advice of experts before you make a position. I Seeking suggestions from experienced professionals is advisable prior to making the decision of investment from your end.



Micheal

Robert Thomas asked:




Are you looking for a safer entry route in the capital markets? In the last few years there has been a lot of innovation in the financial markets; some good, some not so good. So what markets to trade and, more importantly, how to trade them?

One option is spread betting, in the past this form of trading has had a reputation of letting you make quick profits and even quicker losses. It was always a bit of a rollercoaster.

The leading spread betting companies have now introduced a number of ways to help to restrict your losses. Spread betting is a quick and tax free* method of trading and, therefore, it does have its appealing aspects. These days though, with financial spread trading, you can limit your downside. Of course, as with all investments you should exercise more than a little caution.

Spread betting on the financial markets offers more than just tax based advantages. For example, you can enter into a trade to buy or sell shares without actually owning them. So if you think a share will perform poorly you can speculate on it to go down. This is also known as ‘shorting’.

You can also bet against a wide range of other markets eg you can spread bet on Gold, Crude Oil, the FTSE 100, Dollar/Euro, Pound/Yen etc to go down. Naturally, you can also speculate on these markets and thousands of others to go up.

Personally, I also like the fault that the whole process is regulated in the UK by the Financial Services Authority. This helps ensure your funds remain safe.

If you financial spread bet, the range of possibilities is quite impressive and growing by the day. As you can see from the above, you can trade shares, forex, commodities and indices. More recently you have been able to trade bonds, interest rates and even house prices.

Financial spread trading is based on speculation of the future movements of the markets. Hence there is an inherent risk associated with the decisions you may undertake. However, there are various methods available in order to reduce your risk. One such option is the Guaranteed Stop Loss order. This is an automated order that ensures that your losses are limited. It can also be wise to trade in small stakes as this is a simple way of reducing your risk.

Note that spread betting carries a high level of risk and may not be suitable for all classes of investor. Only trade with money that you can afford to lose. Make sure you fully understand the risks involved. If necessary, seek independent financial advice.

* Tax law is subject to change and may differ in jurisdiction outside Ireland or the UK.



Carrie

Andy Richardson asked:




There seems to be a common misconception among some investors and traders who have financial spread betting accounts that when they lose money, it’s the fault of the spread betting provider, who’s trying to move the trade against them, but this is plain untrue.

It is true that the spread trading company is your counterparty.

Broadly speaking, spreadbetting firms make a price to the clients so, in the first instance, it is true that you’re betting against the spread betting firm. What they choose to do with that risk depends on their view perhaps of just that particular product or their view of that asset class. In many instances, they will hedge that position directly into the underlying cash market and that will effectively mean that the client is playing against the market, not the spread betting company.

But do spread trading firms hedge client positions?

So suppose you have 50 clients and 40 of them are long on the FTSE and 10 of them are short and the spread trading dealers think the guys who are short are on the right side, they won’t necessarily hedge?

The answer is that this is up to the dealer who is responsible for that particular desk and it is his discretion whether to decide to hedge. Spreadbetting providers are happy to have consistent winners and obviously if they see good winners, they’re keen to hedge those straightaway as opposed to running the positions for a few minutes and taking a view.

The sad statistic is that most day traders lose

It’s a sad statistic that not all traders consistently make money but again going back to psychology if spreadbetters consider spread betting companies as their trading partners who are giving them the best prices and good spreads then perhaps they will realise that they are really against the market and spread betting providers are simply helping them access that market. The market will do whatever the market will do. I don’t know what it’s going to do. We’re all in it together and that’s probably the best approach.

Lillie

Damon Good asked:




Point spreads, or just spreads, were created to make lop-sided games more interesting. Instead of just betting on whether a team wins or loses, you bet on whether the team is able to beat the point spread.

Spread betting is common in team sports where each team scores and the winner is the team with the most points like football, basketball and hockey.

A weak team doesn’t have to win to pay off. If they lose by less than the spread, then that’s considered a win (by anyone who bet on them at any rate). Conversely a strong team has to win by a lot to pay off. If they win by less than the spread, then that’s considered a loss.

Understanding Point Spreads

Point spreads are expressed by a number with a plus (+) or minus (-) sign in front. The minus sign means the team is the favorite and has to win by more than the spread. A plus sign means the team is the underdog and has to lose by less than the spread or win outright to payoff.

Spreads are always paired so if the favorite is -6.5, then the underdog will be +6.5. This is useful to remember because your local newspapers will often just show one number after a team name when slipping odds in to an article:

Indianapolis Colts -13 at St. Louis Rams

When you visit an online sportsbook like betED to place your bet, the spread will often have a second set of numbers in a similar format:

Indianapolis Colts -13 (-110)
St. Lous Rams +13 (-110)

The second set of numbers show how much money you have to bet to win $100. So in the above example, if you bet $110 on the Colts to win and the Colts win by 14 or more, you win your bet of $110 plus another $100.

If they win by just 12, then you lose your $110 bet.

You may wonder why you don’t win double your bet back since the point spread is supposed to make the odds of winning even no matter how lop-sided the match-up. However, you are not betting against the sportsbook. You are betting against other bettors and the sportsbook is just acting as an intermediary.

The extra $10 dollars for each $100 dollar bet is the commission the sportsbook takes for holding the bet. It is known as the vigorish or, more commonly, the vig.

The sportsbook wants to have exactly the same amount of money on each side thereby guaranteeing a profit regardless of the result. As bets come in, the spread or the vig will move up or down in order to entice bettors to one side or the other and keep both sides in balance.

Often you will see point spreads with a half a point like -13.5. This makes it impossible to tie. If there is a tie, Indianapolis wins by exactly 13 points in the above example, then the bet is a push and no money is won or lost.

Most reputable sportsbooks return the money, but you should definitely check what an individual sportsbook’s policy is before placing a point spread bet as some sportsbooks award a win or a loss on a push.

Betting Point Spreads

Betting point spreads can make an otherwise uneven game interesting. It can make a thrilling ending out of the final minutes of a lop-sided game.

If you’re a fan of a team that’s having a rough season, then betting point spreads can turn some of the team’s many losses into mini victories for you and bring excitement back in to a rebuilding season.

Professional gamblers examine every aspect of a game looking for some factor that the odds-maker may have missed when setting the spread that could make the difference between covering the spread or not.

Regardless of why you bet point spreads, it’s always important to never bet more than you can afford to lose. Betting on spreads can make games more enjoyable, but only if you bet responsibly.

Irene

Andy Richardson asked:




City Index was established in 1983, and is a broker for Forex and Contracts for Difference, as well as spread betting. It has offices around the world, and also trades under the names Finspreads, FX Solutions and IFX Markets. In addition to these owned brokerages, City Index provides services for other brands, such as Barclays, Halifax and TD Waterhouse.

A City Index account gives you access to an iPhone application called City Trading via free download, which some people will find valuable. The traditional online interface is very easy to use, and includes the latest news feeds. There are a series of video tutorials about the platform if you have any doubts about using it.

City Index makes much of its commitment to fair and transparent pricing, and promises competitive spreads and good margins. The spreads are good, if not the best available, and City Index account holders report that the prices are stable, and seldom vary from those displayed, meaning that you will suffer minimum slippage.

There are not any new account offers or bonuses offered at the present time, and the free demo account which allows two weeks of practice trading with £2,500 virtual cash is difficult to find. Against this, they have 24-hour online trading, access to thousands of markets, and a long history with good capitalization. Other plus features include the facility for a guaranteed stop loss, should this suit your trading plan, and credit is available for your account. The account can be in Sterling, US dollars or Euros, which can save you some currency conversion charges.

Some users have reported difficulties with the platform “freezing”, particularly at times when trading is heavy, and the only answer may be to log in again. Such a happening is hard to pin down, and others who admittedly appear to have light trading habits have had no difficulty. These things may also occur because of factors outside City Index’s control, such as the computer, the internet connection, etc., so you should form your own conclusions how well the platform works with your personal setup during the free trial.

Conclusion and Overall Review of City Index’s Offering

City Index is one of the older and well established spread betting providers and has a reasonable set of financial products on offer. While the spreads may not look the most competitive (and they are actually not too bad), user experience suggests that you are not likely to find much re-quoting when you come to place your trades. A spread that is available beats competitive spreads that are not there when you want them. City Index are certainly worth looking at and trying a demo account if you are seeking a spread betting provider for your future trades. We rate them as good value.



Paula

Joan Weisman asked:




When you are working to trade stocks in financial spread betting you can look to handle this trading option online. A good online platform program for betting on spreads should be used. Here is how you can use one of these platforms.

First you will need to log into your platform. You can get an account and password from the group that you will be working with for your financial spread betting needs.

Next you can take a look at the different types of bets that are available. In addition to looking into the spreads you already have you can also look around different types of investments that your trading group has to offer. It will be very important to be sure that your platform has a secure online connection that will offer you real time information.

When you do find a position that you are interested in getting into you can use your platform to open a position. A typical software platform will have a link that allows you to open a position and to set your parameters including whether you are going to buy or sell the position and at how much money per point your position will be worth.

After you choose to open a position you will need to set stop orders for it. You can easily handle this by entering in the level that is against your prediction that you want to sell your order with. Some platforms will have calculators that can be used to help you find out what your potential losses could be with certain stop orders.

Finally when you close a position in financial spread betting you can have one of two options. You can either choose on your platform to get a position closed or you can wait for the stop order to come into effect if your position is losing.

Some platforms will have special features that you can use for online financial spread betting. These include setting up watch lists where you can monitor progress on certain spreads of interest to you and setting parameters where a position will be placed when an investment gets to a certain value level.

When getting into financial spread betting online you will need to use a good trading platform. This software program should be one that is easy to use and will allow you to open and close positions and set up bet orders with ease.



Joel