Financial Spread Betting News Information Tips

Lucy Johnson asked:




Financial spreadbet may sound complicated, but the truth is, it is easier to understand than many believe. Here are some point guides that you should follow when entering financial spread betting. These will allow you to fully understand the spread betting market. More than that, these can also be applied to currency trading…

1. Practice makes perfect – Just like any other business, it is essential that you try and test every strategy or practice on a “demo” account so as to fully understand the inner workings of financial spread bet. Until you master spread betting, you can go and bet on real money.

2. Start low and slow – When opening a financial spread bet account, set up first an account with a minimum of $1,000. This will evade you from making staggering losses and keep your betting size to small faction. Play the market slow and you can start at UK FTSE. The blue chip stocks are even better as they are more liquid. For a beginner, stock market and forex is generally too volatile.

3. Increase profits – Know when to bet. The market can move sharply either up or down so you need to analyze and study the market by keeping track of the trends. You can also purchase software to predict the financial spread bet market.

4. Avoid averaging down – Never increase your position once the market moves against you. However, if you are up, you can make the wise move of increasing your position.

5. When making financial spreadbet , use firms that provide firm quotes – Employ proper regulate firms. Know that there are lots of unscrupulous people out there that want to take advantage of you and take your money.

So, watch out! Know these important guide points and you are way to a successful spread betting venture. These tips are just few of the many thus you need to fully understand everything that is involved in spread betting to make the most profit from it.



Brian

William Potter asked:




Is it truly possible to make money trading CFDs? This is the million dollar question that many traders ask themselves before, during and after getting involved in trading Contracts for Difference.

Making money with Contracts for Difference is easy

Nearly every trader you will come across that trades contracts the difference will have made money. The challenge with trading contracts the difference is not making money but instead hanging on to those profits and not letting greed get the better of your trading account.

One of Australia’s largest CFD brokers held two separate trading competitions over different time frames and demonstrated the fact that making money with CFDs is not the hard part but instead overcoming greed in order to hang on to those profits is.

In one trading contest the leader had made over 2400% in five weeks of trading only to give back all of the profit (in excess of $150,000) and start eating into their trading capital. In another similar contest, run by one of Australia’s largest CFD brokers, the leader had amassed over 10,000% profit in a couple of weeks only to finish on just over 4000% profit after a short six weeks of trading. This trader had originally given back some 6000% in profits. The mind boggles.

Did you truly come here to make money trading CFDs?

One of the most common sayings in the stock market is traders always get out of the market what they came for. As a result it is absolutely vital that you define your objectives clearly and set steady achievable goals in order to maximise your opportunities when trading Contracts for Difference.

Those traders who do make money trading CFDs I gently knows quite clearly defined goals, a well-established trading plan, trade within their limits and are able to remove their ego from their decision-making ability.

The Golden Rule of Trading Success

It is a well known fact that the golden rule of CFD trading success is to cut your losses off short and to let your profits run and for many this is a lot easier said than done. When defining your trading plan it’s a great idea to ensure your wins are at least one and 1/2 to 2 times the size of your losses. Further to this, those that can make money consistently trading CFDs are fully aware of all the numbers related to their trading business.

Profitable CFD traders will be able to tell you their average win, average loss, percentage win, percentage loss and the expectancy and maximum drawdown of their trading system.

As you can see making money trading CFDs is a result of good common business sense including building a trading plan, trading within your means, removing your ego and knowing all the numbers of your trading business.

Manuel

Paddy Power asked:




Only three months ago, Gordon Brown claimed that he had “saved” the banks. Unfortunately it’s looking increasingly likely that he is going to have to save them again, this time by taking some of them into public ownership. With the UK short selling ban now revoked, you can short the UK banks and make a lot of money if nationalisation does occur.

There is no official plan to nationalise more UK banks at the moment or set up a “bad bank” system. So why did the banks share prices collapse this week? Well, more and more market analysts now believe that the UK is on a course of “creeping nationalisation”. Nationalisation would result in shareholders losing a lot. As the stock market is a forward looking mechanism, it has to discount the banks share prices by the probability that they will be nationalised. Some have been discounted by more than others. Let’s have a look at them.

The Current State Of The UK Banks

Royal Bank of Scotland is undoubtedly top of the list for nationalisation. Following their warning that 2008 losses could reach £28bn and an increased government stake to 70%, their path to public ownership seems to me to be inevitable. It looks like a sorry finish for a company, now worth only £5bn, that paid £50bn in cash for ABN AMRO only 18 months ago. Lofty ambition or foolish hubris?

The Lloyds TSB shotgun acquisition of HBoS resulted in it picking up about £21bn of assets for about half that price. They also got substantial bailout funds to help make the new Lloyds Banking Group work. But the risk now seems to be outweighing the benefits. Lloyds is already 43% state owned and if they accept the UK government’s new offer, the taxpayer will become the majority shareholder. This is not a situation that management would want, but they will find it difficult to resist the new deal for very long. And if they can’t prove the viability of their independence in the coming months, the government will be just forced to step in anyway. The clock is ticking.

Barclays could easily be in the same state as RBS, but for the fact that their bid for ABM AMRO failed. This has helped them avoid the need for any bailout money so far. But the clock is ticking for them too. They decided to buy Lehman Brothers US operations for £1bn when they really couldn’t afford it. Their balance sheet is looking vulnerable with a lot of unknowns. And any time in this crisis when the unknowns have become known, share prices have dived. Barclays will have to take some sort of government funding now. But there is increasing market speculation they are also heading towards nationalisation.

HSBC are going to survive (famous last words!) They actually have more deposits than Standard Chartered Share Priceloans in the UK which gives them the ability to absorb losses and write-downs, of which there have been a lot. Their size, diversification and creditworthiness have seen them become the biggest bank in the world by market capitalisation.

Standard Chartered have also performed admirably throughout this crisis, mainly due to their focus on emerging markets, especially Asia. They continue to deliver strong results and positive future guidance, meaning they are a rare growth company in these times of rapid de-leveraging.

More Trouble For The Irish Banks

In Ireland, the same nationalisation questions are being asked. Allied Irish Bank and Bank of Ireland have seen their share prices plunge 58% and 57% respectively since the start of the week. They need more funding and can’t seem to entice private investors to give it to them. Finance Minister Brian Lenihan has said there are no proposals to nationalise either of them… but he was saying the same thing about Anglo Irish Bank only a short time ago.

The third remaining Irish public bank, Irish Life & Permanent, isn’t in as much danger of being nationalised (at the moment). They weren’t part of the government plan for recapitalisation as their funding needs are much lower than the other two. The Irish Life part of the business looks to be fine – if only they could get rid of the Permanent TSB side!

Possible Trades

The UK financial shorting ban has been revoked (for now anyway) so markets can return to some sort of efficiency. But which banks are worth shorting? If your view is that one of the above is going to be nationalised, then there is still a lot of value in going short. Barclays have a market capitalisation of about £5.5bn which means it has plenty of room to fall further. Also if your view is that the world economy is going to get significantly worse, there is potentially value in shorting Standard Chartered.

On the other hand, this huge sell off could be overkill. The respective governments do not want to have to resort to nationalising their whole banking systems. Everything else will be tried first. As a result there could great value out there. AIB and Bank of Ireland, with retail branches in every town in Ireland, are now valued at a mere €533mln and €356mln respectively. But if you see queues outside your local branch that would be a good signal to get rid of your long position… fast!

Another possible trade is a pairs trade, explained in the hyperlinked blog. Here you would go long on the bank that you think will outperform and short the bank you think will underperform. In this case, you don’t really have to make a call on the banking industry in general. You just have to pick the banks that will do the best and the worst, although that’s not an easy task itself.

Conclusion

The sell off this week has been caused by speculation rather that hard fact. The market has decided to shoot first (and shoot often) and ask questions later. This reaction to what can only be described as rumours has undoubtedly been over the top, but that’s what the market has been driven to after been caught unawares so many times in the past.

For me, I don’t think that Allied Irish Bank are in such grave danger, so I think there is good value to a short term long position on them.

Whatever happens; the person who gets it right will make a lot of money.



Darren

Andy Richardson asked:




WorldSpreads was founded in Ireland in 2000, but traded first as a spread better on sporting events and only entered the financial markets in 2005. Thus it is still one of the younger and smaller spread betting providers that are available for the financial trader. Having said that, it has FSA approval, including foreign exchange, options, and futures, and it is listed on the AIM, the alternative stock market for small companies.

WorldSpreads is now headquartered in London, and has offices in many other countries. The Irish connection was severed in 2009, realizing funds which have been used for development of a new trading interface, the XEQT, among other things. It has developed several strategic partnerships, including providing all financial spread betting services for Ladbrokes, the bookmaker.

The current financial incentive for signing up a new account at WorldSpreads is that it will cover your losses up to £250. This is for the period of the first eight weeks of your trading, and provided your account was opened with at least £500. This obviously doesn’t prevent you from losing money, particularly when you are trading a leveraged product like spread betting, but provides a useful cushion if you are just starting to trade, when you might expect to take a few weeks until you get the hang of it and start profiting.

WorldSpreads allows you to operate your account any of three currencies, pounds Sterling, Euros, or US dollars, thus avoiding currency exchange charges, and the minimum spread bet is £1, except for the S&P markets which require a £10 minimum bet. The maximum bet is £100 for the markets that have a one point spread, and larger bets attract a three point spread. Many markets have the one point spread, which makes WorldSpreads one of the more competitive spread betting providers. It allows dealing in more than 3000 markets, and also welcomes telephone dealing, which is good to have if only as a safeguard from your computer going down.

While WorldSpreads are not open 24 hours during the working week, they do offer extended hours as they answer their phone between 7 am and 9.15 pm London time. As with most brokers, you may find that the spreads increase when you are trading outside hours, and this is for the obvious reason that the broker must take on more risk without being able to unload it on to the market.

WorldSpreads offer instant execution of your trades via their online interface, or on the phone, and users report that this is normally works well; however, sometimes intended trades are referred to dealers for confirmation, and this does delay matters. Some users report that this does not seem to happen if they are placing losing trades, and only if they start winning, but this sort of reaction is found amongst some users for all brokers.

What we like about World Spreads

We like the small spreads (which are tighter than IG Index or City Index), and a good range of products available at WorldSpreads. World Spreads, while not having the record of some others, offers good value and is worth trying out.

Laura

Dennis Moore Hopkins asked:




Among the many financial spread betting strategies, one of the best well-suited for beginners is practice. It is already a proven fact that practice does make perfect so if you are at the initial stage of penetrating into the spread betting vogue, then open a demo account to practice. Most companies would permit such account and often they provide a certain amount of money to trade with. Adapt yourself and get accustomed before you deal using real money.

Then when it comes to the opening of a real account, setting the minimum of your account to be $1000 is the most appropriate spread betting strategy here. Although the minimum set by most companies is $200, a larger amount with prepare you with larger losses. And always maintain a small fraction of betting size. The figure 2% is alright if you are prepared for a maximum risk but a small account often deals with only 5%.

Besides, do not rush into the betting. A slow start will keep you stable and the UK FSTE 100 is recommended to be a good initial position. Beginners are not advisable to penetrate into the Forex or US stock market as they are too risky. Another spread betting strategy is increasing your profits. If you are a sharp observer, you would be aware the right timing before the market rise up or flow down. It is best to bet before the fluctuation takes place. But you will need a close monitor and analysis of the trends and markets as well as good software to perform this.

You should also take note about the financial spread betting strategies to conduct your bet. Deal with firms that provide firm quotes on the screen. Try to examine the company before making a decision to trade with them, there are always people who intend to cheat. A reputable and regulated firm should be a wise option. If you happen to conduct a trading bet via the phone, make sure that you state your demands accurately and make them repeat to double confirm it.

Lucy