Financial Spread Betting & SpreadBetting Companies Explained

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Spread Betting in the UK!

W ith the stock markets in a hubbub and stock prices yo-yoing on a daily basis it is the perfect climate for engaging in some potentially profitable spread betting! Say, you have a hunch that the euro is on the verge of collapse. Or that the Japanese stock market will beat the European market this year…

Want to bet on the Dollar against the Euro? Pound against the Euro? Not sure about the Nasdaq? Maybe the Deutche Bursa? What about oil, gas, silver, wheat or maybe you simply have an opinion that a certain stock will double in value? Spread betting allows you to do all this (and much, much more…) in a flexible, tax-efficient way. Don’t forget, tax treatment depends on the individual circumstances of each client and may change in future.

Spread betting can be a Goldmine if you know what you’re doing…

or it can bankrupt you if you don’t…

Spread Betting is becoming increasingly popular as a day trading tool. Where there is volatility in the markets, there are opportunities to exploit. While such wild market swings have made life difficult for long-term investors, for those with a shorter term perspective the high volatility of recent months has created ample chances for them to profit from market swings. And more people are realising that you can trade from home and that you don’t need to be at a hedge fund or help from a stockbroker to try and make money from financial market movements. Spreadbetting offers a simple, tax-free* method of trading the financial markets, whether you’ve traded before or not. However, it is important to appreciate that when trading spread bets you can lose more than your initial margin deposit. Spread betting in this respect is rapidly becoming one of the most exciting ways of speculating on the stock markets and making money. It is a way of speculation which has something to offer everyone from day traders to swing and position traders. At it’s core is the maxim ‘The more correct you are, the more you win!’

Simple, cheap and highly flexible, financial spread betting will fit into any trading strategy that you currently use or wish to use. With the ability to go long or short in rising and falling markets and the capability of magnifying profits, or losses, spread bets are a useful addition to an experienced investor’s armoury. It is a fact that an increasing number of people are now trading using spreadbetting to avoid paying commission and taxes. It’s quick and easy to open an account, requires very small capital, offers leverage and lets you trade in very small amounts across a wide range of markets.

Spread betting might just be the thing for you. With this form of financial trading it is possible to profit no matter which direction the market is moving (i.e. you can profit even when prices fall), and you can trade thousands of different markets all from the one account. Traditionally, if you wanted to day trade shares in the United Kingdom using a broker, the share had to fluctuate by at least 5%… and even then at least half of your profits are going in commissions and tax. You see, in the United Kingdom every time you buy stocks and shares you pay a tax known as stamp duty. This amounts to 0.5% of the market value of the stocks (if you buy on margin, then 0.5% of the market value represents an even higher cost of trading). So with a 5% move, you would be lucky to walk away with 2% (and if the market goes against you, it will cost you about 5% + 0.5% + 1% = 6.5%).

Spreadbetting solves all this since it is considered gambling and it is free of stamp duty. In Ireland and the United Kingdom, the gambler pay no tax on gambling profits (the Bookie = spread betting company pays Tax, NOT YOU…). Of course there is still the bid-offer spread but it is usually much lower making spread betting far more efficient and cost effective. With financial spread betting you can bet in either direction with the same ease (i.e. bet on a share price rise, or bet on a share price fall for instance) – if you predict the market direction correctly, on the same 5% move, you will walk away with 4.75%…if you get it wrong, it costs you about 5.25%…

Our trading course assumes that you have absolutely no prior knowledge or experience of spread trading whatsoever. You can be an absolute and total beginning and this is not a problem. There is no requirements in knowledge or experience that you need to have. The course starts from the basis that the student is a complete beginner and thus begins by explained how to read a chart.

And remember spread trading is currently tax free so you don’t have to worry about capital gains tax. You can also get that little extra treat in the form of a spread betting bonus by signing up to one of the financial spread trading companies featured on our spreadbetting website.

I hope you enjoy reading this guide as much as I enjoyed compiling it. Your are embarking on a very exciting adventure and one which could, quite literally make you rich (or poor if you negligent!) I regularly make several thousands pounds on a bet, and sometimes lose a thousand pounds. It is just a matter of scale…

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Start slowly. Build up confidence. Trade carefully.

About Us – Spreadbetting

SpreadBetting.com

Financial Spreadbetting

SpreadBetting.com is the information website for all things Spreadbetting. Whether you are new to financial spreadbetting or more experienced, you will find this website packed with useful information, articles and news to keep you up to date with the world of financial spread betting. We want to help you to trade better and be a successful financial spread better, so help you in two main ways. Firstly, we work with the top spreadbetting exchanges to give you up to date information on offers and deals to ensure you have the best spreads and margins. Secondly, we draft in experts to provide us with market insights, trading strategies and tools to make us a success.

Packet With Great Features

SpreadBetting.com’s new look website is now mobile friendly, this means that you can keep in touch with us and with your spread betting community while you are on the go. We have had great feedback about the site’s new mobile friendliness and we really hope that you will like it too.

How do I Start Trading Stocks?

We have the super new SpreadBetting.com forum which has been set up for you to ask questions, to share and to learn. So if you want to know how to trade stocks,/strong>, to compare the latest offers in the market, or if you should trade gold, turnips or the Dow Jones, simply join up, log in and get communicating.

Beginner, Intermediate or Expert?

Spread Betting Explained

Are you asking yourself what is spread betting? or how to trade stocks? Are you considering opening your first financial spread betting account? Want to know where to go, who to compare or what to look for?

OR, are you further along your spread betting learning curve? Do you consider yourself an expert? Can you explain your strategy clearly? How you use your stop losses to best effect? What affects the markets that you operate in, what patterns you look out for? Never forget, there is always more to learn.

An Introduction to Financial Spread betting

Today I want to share with you my experience with some Spread Betting companies. First of all, I want to explain what is actually financial spread betting as a financial product. It has many similarities with Spot Forex and Binary Options contracts but it is totally different. It has regulated as a financial product from the biggest regulators of the world (FSA etc.). One advantage of this product is that it’s tax free, at least in UK and Ireland. There are many financial spread betting firms and they offer Forex, Commodities, Stock Indices, a big amount of shares, Bonds, Interest Rates and House Prices. A client can spread bet in every one of the above products and like Spot Forex and Binary Options he can earn money by the rise or the fall of the market.

In every company there is a bid/offer price for each product. If you believe that the market will rise , you can buy the product in the offer price. If you believe that the market will fall you can sell the product in the bid price. So, simply. The companies made money from the hidden spread within the offer and the bid price. The spread is usually 1 point (pip) for the popular products like Forex, Commodities and Stock Indices. Now, the question is how much money you can earn by the rise or the fall of the market if you will predict right. Before this, you should know some basics things about the financial spread betting. Let’s go.

• The hidden spread

This is how spread betting firms make money. From the hidden spreads. For example, let’s say that we have the currency pair EURUSD and it’s 1.28276 and we have the offer and the bid price. If you want to buy the pair maybe the price will be 1.28277 and if you want to sell the pair maybe the price will be 1.28267. This difference of 10 pipettes (1 pip) is the hidden spread and it’s the company’s profit. Like the Spot Forex Brokers.

• How many $ per point

Now, this is the real deal. In these spread Betting Brokers you can fix your contract and choose how many dollars or euro you want to earn or loose by the change of one point (one pip).So, let’s say that we want to buy the above currency pair, EURUSD, because we believe that the Euro will rise and we choose 20$ per pip(point). We buy at 1.28277. After some minutes the currency pair is at 1.28377 that means that there is a 10 pips change up for our favor. So,
10 pips * 20 = 200$
And this is our profit.

Like Spot Forex or Binary Options in an Exchange you have the choice to put a stop Loss or a stop limit order. With a stop loss order you can protect your account from a big loss and with a stop limit order you can protect your profit from a big bad change of the market and take your profit and leave.

You have the choice to put some other orders before the price hit the strike price you want. For example, if the currency pair EURUSD is at 1.29200 right now, you have the choice to put a buy order right now, only when the currency pair will reach at 1.29240. You can do the same with sell orders. You can put Stop Loss/Limit with these orders, too.

It’s the amount of money you must have in your account to take a trade. Your account balance must be enough to cover the damage in a case of a loss.

  • Profitable ways which I use for spread bets

The best way to make money with spreads, it’s obviously trends. If you can identify a trend from its beginning and invest on it there isn’t a limit to the money you can earn. Of course, stop Loss is a “must” because in a market with high volatility if the price will move against you it’s very easy to wipe out an account. So, you should never take a trade without a stop Loss order.

Except trends, you could trade the news with some orders I said above. For example, if some news is coming, you can put an order to buy in a particular strike price and catch a bullish break out. Stop Loss is again a “must”. Let’s see some screen shots.

Here are some trades of mine. Look at AUDUSD at 19:43. I bought the currency pair for 10$ per pip.

It was the begging of a new up trend. I closed my position some minutes later and I took my profit which was 86$.

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  • Binomo
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