Financial Spread Betting News Information Tips

Jon James Lee asked:




There are so many spread betting companies about these days that you don’t know where to begin looking. It is important that you don’t panic and that you take your time through this process. Yes it will require a bit of work to find the right one but that will avoid the need to move to a different account in the future.

The first thing that you need to be clear of is are you interested in sports betting or financial betting? This is important because while there are a number of spread betting companies that do both, some only concentrate on their specialist area.

Many spread betting companies will offer you cash back to open an account with them. This should not be your first selection criterion. Yes it is nice to have so if you were unsure between two then go for the one with the cash back but make sure you read the terms and conditions properly beforehand.

What you should be more interested in is the ongoing costs and not the one off incentive. You won’t have to pay commission but spread betting companies need to make their money somehow. They do this through the spread of a trade. You want an account with a company that will keep their spreads tight.

Assuming that you are going down the financial route, you want a broker that will offer you the bet type that you want. If you want to trade in stocks and commodities then it is important that the broker offers those services to you. Likewise in sport, you want the sport of your choice to be covered.

While you are going through the spread betting companies why not consider opening 2 accounts from different firms? When you are trading you want to be flexible. If you can’t access your account when you need to then that could hinder you massively.

It is important to remember that when you are looking for spread betting companies that it isn’t the end of the world if you choose the wrong one. Don’t worry as you can always change your mind.

Ashley

Robert Thomas asked:




The problem with trading shares around the World Cup is that much of the positive effect of the tournament will already be priced into the shares. Also if England perform poorly, or if they are just plain unlucky, then some of the more obvious buys become sells.

Having said that, with Financial Spreads you can speculate on stock markets and shares that are listed in some of the more consistent countries.

For example, looking at German shares an investor could speculate on the Adidas share price to increase. And there won’t be much getting away from Adidas this summer. They sponsor both Germany and France, they are official FIFA partners, they sponsor players like Lionel Messi and David Villa. They even supply the match balls.

It is also possible to spread bet on other European shares such as Carlsberg, however, the Danes are not the 2010 sponsors. In contrast, the US stock market does supply a few sponsors in the form of McDonalds and Coca Cola.

Another option is financial spread betting on the South African Stock Market to perform well. During the more recent World Cups the host nation’s leading Stock Market Index has performed well around the tournament.

Looking closer to home though, the shares of the various UK bookmakers are tempting but there are a few pitfalls. If England do not progress beyond the Group Stage then revenues will certainly be down. If England were to win the World Cup and Rooney were to pick up the Golden Boot, not an inconceivable combination, then the bookmakers could be facing some rather damaging payouts.

An Irish bookmaker like Paddy Power with less England specific exposure could be a less risky trade. Having said that Paddy Power also have a sports hedging business whereby a firm, eg a Furniture Company, offers its new clients a discount if England win the World Cup. The Furniture Company then hedges off that risk with Paddy Power. This additional exposure makes these particular Irish shares a less tempting proposition.

Elsewhere, the UK’s pub chains should experience reasonably brisk trade but again much of the upside could already be priced into the shares and there might be better value elsewhere.

Looking at the more traditional sports retailers like JJB and Sports Direct they also have positives and negatives. They should see increased England shirt sales but the supermarkets are increasingly active in that market. Tesco are even an official England sponsor for 2010. The extra sponsorship, shirts sales and mechanise should give the shares boost. Also the other positive for Tesco is that if the England team enjoys a good run that should further boost alcohol sales.

Adidas should not be ruled out and neither should trading the South African Stock Market however Tesco does have a few more strings to its bow. The supermarket also has fewer downsides and for that reason it is probably the stock to watch out for.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.



Barbara

John Helios asked:




For making money you will need an effective financial spread betting guide to enable you to know how  the system works and how to make use of this information in your favor.

Many individuals imagine earning profits on the stock exchange is difficult but it does not have to be. In this particular financial spread betting guide it’s easier to show you by example just how you can make money from the stock market, trading in foreign currencies or in commodities.

In this example we’re going to use the UK FTSE 100 with the way it could react on a hypothetical day. On a given day you can go on online or place a call to a spread betting company to find the “spread” on the FTSE 1000. Now say the info shows the spread is 6350-6500 (6500 to place a “buy” or “up” bet and 6350 for a “sell” or “down” bet).

Now making use of your judgment you have choose whether the FTSE may go up or down. Should you think that the FTSE 100 may go up you will place an “up” bet. You bet a certain amount for each point.

For example you can wager $10 per point. If the FTSE 100 rose to 6700 within the time period specified by the betting firm (generally one trading day) this would be a raise of 200 points. In this example you’d make $10 x 200 points, which means you would net a profit of $2,000.

Financial Spread Betting – Even Make Money When The Market Falls

On the other hand if you believe the market was going to fall then you would place a “down” bet. If we make use of the same example of $10 for each point and the FTSE 100 was to drop to 6200.

This would be a fall of one humdred and fifty points and your profit will be $10 x 150 points that leads to a net profit of $1,500. The thing is should you place this bet and the FTSE 100 were to rise by one humdred and fifty points you would then lose $1,500.

As you can see from our financial spread betting guide the theory is pretty easy and placing bets on the way in which the markets might turn is infinitely much easier than trying to pick out one stock that may make you money.

In this way you can also earn money even if the markets fall. Lots of people are now turning to financial spread betting rather than selling short or investing in hedge funds as the profits are more instant and the potential profits could be large indeed.



June

Philip Gegan asked:




Currency spread betting, foreign exchange, forex. Call it what you will, it’s the flavour of the month, and has been for some years. We’ve all been led to believe making money by spread betting on currencies is as easy as falling off a log. The trouble is, the facts and figures don’t support this. But that doesn’t mean trading on currencies generally will lose you money, provided you know one or two secrets that I’m going to reveal.

1. It’s not the unregulated, uncontrolled market they make it out to be.

All the web sites selling forex related information and software tell us that the forex market is huge. It trades around $3 trillion worth of currencies each day, with many thousands of traders, big and small, pitting their wits against each other. It has the advantage over the stock market in that it’s never “bear” or “bull”, because if one currency is on the rise then at least one other is going down, and so on. And you can’t get market manipulation, because it’s so huge no-one could manage to do it.

Well, it’s certainly true about the size of the forex market. But it’s not quite as uncontrolled or free of manipulation as it’s made out to be. In fact, only about 20 huge multinational banks control at least 90 per cent of what’s going on in the forex market at any one time. They have thousands of experienced traders working on their behalf to earn them profits, and they’re very good at it. So learn everything you can and gain as much experience as you can before you risk real money.

2. Profits in forex are not as enormous as is made out.

You can’t earn thousands a week with an investment of just a few hundred. The web sites that tell you that you can are lying, pure and simple. The huge banks that make the lion’s share of all the profits in currency spread betting make on average 30 per cent a year. That’s a handsome profit margin by anybody’s standards, but it’s not the phenomenal percentage that the sellers of forex information and software would have you believe you can achieve with your limited capital.

3. To survive and profit in forex you need iron self discipline.

Before you enter any trade you need to know exactly what your target profit is and how much you are prepared to lose if the market goes against you. Set a realistic stop loss level of the lowest (or highest, depending on whether you are going long or short) the market has been over the last two months (or whatever other trading period you consider applies), plus another 20 per cent.

This means you need a certain minimum amount in your account, and even then you probably need to be modest in your ambitions. Otherwise you will soon lose your money. You need to be able to ride the volatility. Look at the charts and do the maths.

For the same reason you need to set your profit limit, so you exit the trade as soon as it has been reached. Don’t be tempted to go for another few points. Be satisfied with what you have won. Losers are destroyed by the main driving forces of the market – fear and greed. Self discipline will free you from both.

4. Practice with a demo account first.

This is vital. Nearly all brokers offer demo accounts. Or you can find one through searching. Practice with your demo account for as long as it takes until you have regular profits. Don’t be tempted to trade with real money until you have achieved this. And even then start with a Forex Mini Account

5. Find yourself a genuine mentor as soon as you can.

He or she must be a real trader, not someone who makes their money by selling information on how others can trade.

Maria

Nigel Lee asked:




In order to be successful in spread betting you need to have a clear set of spread betting strategies. These spread betting strategies must be clearly defined so that they are easy to stick to. You need to consider your entry points, profit targets, stop loss, order types and risk management.

We will start with risk management as amateurs often neglect this. Risk management is possibly the most important part of your spread betting strategies. A key part of spread betting is living to see the next day. If you are taking on too much of a risk in each bet then the chances are that soon you will be wiped out. If you manage to breakeven in your first year of spread betting then you have done very well. For this reason it is best to start with only risking 0.5% – 2% of you risk capital per trade depending on your risk preferences.

Stop losses are critical to the success of a trader. The most successful traders often lose more times than they win, but because they keep their losses small, they end up winning overall. You should know your stop loss point before you enter a trade. There is no set rule of where to set your stop loss point and you need to find a solution that you are comfortable with. Two popular methods to set stop loss points are to put them just outside the average daily range and above/below a recent resistance/ support levels.

If your trade moves into profit then feel free to move your stop loss to your break even point. It is absolutely critical that you never move your stop loss point against you. If you get stopped out then you can always re-enter the trade at a later date.

Your entry point will be determined by the set of spread betting strategies you will be using. A popular entry point is a breakout above a level of resistance or breakdown below a level of support. The key to trading and what you need to incorporate into your spread betting strategies is reading what the market is doing and trade it. Don’t try and second guess the market or impose your views on it. The market will do what it wants, not what you want. This is why you set your entry for a breakout about the level of resistance as you are waiting for confirmation. Always let the market confirm the move before you enter.

Profit targets are important as they allow you to run your profits. Like your stop loss point, your profit target is part of your exit strategy. When you are trading you aren’t using a ‘buy to hold’ strategy. Again you need to fit this in with your spread betting strategies, if you are trading a trend then you need to establish a set of rules so that when your trade comes to an end you get out of the trade. When you are trading a trend you have to understand that you will give money back to the market when the trend comes to an end. This is a consequence of running your profits.

Delores

OJ Samson asked:




Spread betting is a fun alternative for those who want to make some extra money and don’t really have the time to get a second or a third job. In fact, why add eight more hours of work to your daily schedule and not have some fun and make some money while watching TV and your favourite teams play? All you have to do is have some luck, but mainly get informed on a few strategies you can apply and you can learn a lot abut making money in a fun way.

You can choose all kinds of spread betting markets to work with. You can go for financial spread betting, for sports spread betting, for option spread trading and more, depending on what you like most and what you are interested in. Also, you should go for the market you think suits you best and on which you think you could develop enough skills to win some money.

When it comes to option spread trading, many people choose it without knowing what is actually is and how it works. This kind of trading consists of buying and selling separate options. However, it doesn’t matter what kind of spread betting you choose because when it comes to strategies and tips, there are something you should get informed on regardless of whether you are working on the financial market or in the sports field. There are strategies to go for in order to reduce your risks, strategies which have to do with timing r even psychological strategies. If you need training, you can also read books and search for information on the Internet because you have a lot to learn and there is a lot of information for you out there.

You just have to invest a little time in this hobby of yours and you can then start having a lot of fun making money to supplement your monthly income.

Mark

Andy Richardson asked:




Fifteen years ago there were only two spread betting providers and today now there are some 15 different providers

Is the Spread Betting Industry a Bubble waiting to Burst?

The spread trading industry is still relatively small but it’s a growing one. I expect to continue seeing a migration from the traditional stock brokerage industry over to the CFD and the spread betting markets so I don’t believe it’s a bubble at all, I think it’s growing rapidly from a small base. According to a survey in the London Times in April an estimated 30,000 new spread bet accounts were opened in the United Kingdom just in 2008. I also think it’s here to stay unless the regulators change some aspects of the spread bet instruments.

What we are now seeing is increased innovation. We have seen providers like IG Index hitting the marketplace with an improved product and continual innovation while ETX Capital, Spreadex, City Index and Capital Spreads have all revamped their trading platforms. City Index and GFT UK have even introduced iPhone and BlackBerry dealing.

I think that there will be even more companies offering spread trading in the future and I would like to think that the next people to offer spread betting or a look-alike product will be financial institutions and I think we are already seeing this with house brokers like Halifax, TD Waterhouse, Self Trade and Hargreaves Lansdown all starting to offer CFDs through a white-label arrangement.

It isn’t really Betting!

This is just of a seismic shift in the investment world. Investors and traders will continue to realise that this isn’t just betting. Sure it says betting on the tin but this isn’t really betting; spread betting and CFDS are just another way of transacting a business in the financial markets. In the future I also see consolidation within the industry as the bigger providers absorb the smaller companies. Many of the spread betting providers might actually be taken over by traditional broker, who in turn offer these products to their existing clients. This will probably take a few more years to materialise but I believe this is what will happen.

Maurice

William Potter asked:




Where did Contracts for Difference originate and who discovered this fantastic product and thought enough of it to bring it to the main stream financial world?

Comparing Futures, Options & Contracts for Difference

Most financial products that turnover billions every day on the worlds stock markets have been around for decades, if not hundreds of years. For example, futures markets have a history dating right back to 1710 when the Japanese traded rice on the worlds first official futures exchange.

Since then there have been many different financial products like options trading, options on the futures markets and of course foreign exchange or Forex. These are your main stream financial products and in amongst that mix of mainstream financial products, CFDs are making great headway.

The Introduction of CFDs

In fact since CFDs launched to the retail public in the year 2000 the interest has been staggering. No-one could have ever predicted the pace at which the investing public took to CFD trading and it continues to rapidly expand around the world.

CFDs first began back in the 1990′s by a London derivative brokerage firm called Smith New Court which was later bough out by Merrill Lynch. Initially CFD trading was a way for clients to short sell the market whilst using leverage and as a double bonus clients were able to avoid stamp duty, thereby reducing their costs even further.

GNI Touch was the first company to introduce CFDs to the retail public back in the year 2000 and since that steady start, they have literally exploded around the world. In 2007, an investment survey by Investment Trends noted that CFDs were growing at 100% per year (in Australia) and were looking to continue their staggering growth in the near future.

MF Global realised that CFD trading was going to be huge and eventually bought out GNI in October 2002 to create a dominant force in both futures and CFDs.

Who are the Major CFD Brokers?

Nowadays there are dozens of CFD brokers around the world with the major ones being MF Global, CMC Markets, IG Markets, First Prudential Markets, Sonray Capital, Saxobank, GFT, City Index and Macquarie Bank to name a few.

In addition to the number of brokers offering Contracts for Difference is the number of world stock markets that you can trade on.

For example, if you open an account with any of the major CFD brokers you will get access to the following world stock markets to trade on: Australia, UK, Germany, Hong Kong, Japan, US, Singapore, Russia, Canada, Finland, Hungary, Italy, Spain, Ireland, New Zealand and many others around the world.

Further to this, as the world increase their capacity to introduce fast broadband access, the number of people trading the worlds stock markets using CFDs is only going to continue to grow.

Cory