Financial Spread Betting News Information Tips

Linden Huckle asked:




Spread betting UK is growing at an incredible rate. The world wide web has made this much easier for the masses, so it is probably understandable that the popularity has increased so much along with the fact that it is classed as gambling and therefore does not incur any tax!

With the incredible on line trading platforms we now have, it is pretty much handed on plate. Lazy, probably is not the right word to use here, we all live in the fast paced world of sky television and super fast broadband, society today almost demands services such as these, so it has never been easier to dabble in this market.

Another benefit to the on line services is the ability for the financial spread betting companies to offer cost effective trading, where investors can enter for small amounts of money.

Types of spread betting

Financial spread betting companies in the UK offer various ways to invest.

1. World Stock markets. There are now more and more companies that allow you to spread bet on the world stock markets. This is becoming very popular, the bets are based on the total value of the world stock markets. So you bet on the whole FTSE 100 going up or down, if you venture out of the UK you can also try the S&P500, Nikkei 225, or Dow Jones.

2. Shares, where you try and predict if a particular share goes up or down and when.

3. Sport spread betting. People in the UK love their sports, so naturally this market is becoming huge. Investors can bet on football, cricket, rugby, horse racing, etc. Football is the most popular, accounting for more than half of all the bets.

4. Financial spread trading on the forex markets offers high liquidity with 24 hour markets and huge trading volumes.

I you are considering investing, be careful and only risk what you can afford to lose!

Vernon

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

John Helios 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.

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 can’t 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.

Ann

S Dawkins asked:




Financial spread betting can be a way of gambling on the stock market without having to own stocks and shares themselves; as such one of the chief advantages that it has over trading is that it can be done any time of the day, whether the markets are open or not. On top of this, spread betting is tax free and often allows you to leverage a great deal more money than you actually put down in the first instance. This works both through the use of margined trading and through the spread itself – let me explain.

Spread betting involves betting on whether you think a stock will rise or fall in value in a given period of time. If you think a share is under priced for instance, you are able to ‘buy’ at a certain number of pounds per point (with shares, a point is equivalent to a penny). So, if you buy at £20 per point and the share goes up by 2p then you just made £40. If it falls by 2p then you just lost £40. It’s fairly simple, but the money can spiral out of control pretty quickly.

As a result, spread betting always involves a certain amount of margined trading. Your margin within financial terms, is in part a deposit that you make in order to cover your potential losses on a trade. This is so that if you place a bet at £20 per point, and the stock falls by ten points, there’s a buffer to ensure that the company is repaid the money that you owe them. With financial spread betting you are usually only required to place 10% of the value of your trade down as a margin.

Usually there will also be a facility called a “stop loss” which stops the bet after you have lost a certain amount of money and a ‘stop win’ which does the same after you have made a certain amount of money.

Overall, financial spread betting is a very risky, short-term investment strategy, the main benefit of which being that it is tax free. The main drawback is that you can lose far more than you bet, and that you will need to very carefully manage your position in the market in order to ensure that you do not lose any money. Although risky, one can do well if they study the numerous strategies and master their own techniques.

Ann

Nigel Howell asked:




Are you frustrated with the financial events over the last number of years? Do you wish that you were in more control of your finances and investing? A lot of people are and they are starting to trade for themselves as they are less likely to trust other people. One of the ways they are trading is by using financial spread betting.

Before I explain more about what it is I want to tell you why it would’ve helped you recently. Possibly its biggest advantage is that you can go short. What I mean by this is if you feel that the market will decline then you can set up a trade that will profit if it does. Given how markets have performed this strategy probably would’ve done you quite well.

The reason that you can do this with financial spread betting is that you don’t actual own the asset. You make your profits and losses based upon the movement of the underlying asset after you initiate the trade. If you place a stake of £1 per point then you will either make or lose £1 for every point price movement.

Does that sound complicated?

Don’t worry it did to me too when I first started. Take your time learning and you will get there. Why not open a dummy account first? Many financial spread betting companies of this type of service. It is a great opportunity to learn.

A further advantage is the tax situation. Currently, in the UK, you don’t have to pay tax on capital gains. That is true for however much you make. Obviously you need to be making profits for this to be of benefit.

I hope that I have demonstrated some of the advantages of financial spread betting. There are others benefits as well as some negatives that you should understand before you start.

Charlene

Sharon Dawkins asked:




Have you ever contemplated using financial spread betting as an alternative to purchasing shares? There are many fine reasons why you should think about this option. This form of investing presents one of the simplest ways to wager on downward moving markets. When you are spread betting, you are not buying shares, what you really are doing is betting on which way you believe your selected market will move either up or down.

More than likely should you be a new comer to this type of market, the term ‘betting’ could have put you off somewhat. We will explain a bit, many of us hear the word betting and imagine a bookie whom gives you odds, and you would then place your wager, either you win according to the odds and the bet, or else you lose. With spread betting, you are betting against another person that has the opposite opinion as you. For every winner there is a loser.

To make a spread bet, one must place it by means of a spread-bet dealer. This is actually not like a ‘bookie’, he or she is just an intermediary. If you are set to start, you would certainly get your package which in turn would have all information you required. Whenever you bet, your stake is going to be multiplied by each point the market moves for or against you, this would determine your win or loss.

Many people are utilizing this form of trading a great deal more currently; it is additionally catching up to CFD trading. Among 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 command over loss management by utilizing limiting order and stop losses. In addition there are no dealing commissions which have to be paid.

Why is financial spread betting stamp duty free? This is really a straightforward question to answer, traders are not actually transferring any asset, and rather they are exchanging the price movements from within the actual 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. Knowledgeable traders who are involved in the market and people whom understand the risks related to margins and gearing are normally who spread betting appeal to.



Willie