Some things to consider before starting to spread bet

Have you heard the term spread betting and wondered what it is all about? Financial spread betting allows you, as the investor, to bet on whether the price of a financial instrument will rise or fall, and this is done without using a stockbroker. The benefit of not using a stockbroker is you don’t have to pay a commission fee. With spread betting, the contract is just between you as the investor, and the spread betting company.

So, are you curious to have a tinker with spread betting but not sure where to start? Firstly, contrary to common believe, spread betting is for everyone. While many serious investors spread bet for a living, it is also for the everyday investor. If you’ve never spread bet before, don’t be put off.

This article takes a look at how to get started with spread betting, what it is all about, and why it is popular. Today spread betting is one of the most popular trading methods in the UK. There are more than 150,000 people now partaking in this form of day trading. Why is it so popular? There are several reasons. Firstly, in the UK, wins from spread betting are tax free. However this also means that losses are not tax-deductable.

Secondly, to start spread betting you don’t need a lot of capital, you can start to trade with as little as £100 on deposit and you can use as little as 1p to bet on the price movement of shares. However, golden rule, don’t bet with money you don’t have or can’t afford to lose.

These were just a couple of the advantages of spread betting, there’s certainly plenty more. Now its time to look at which company to use. It is worth researching and spending time deciding which company to trade with. If you’re new to trading it is highly advisable to go with a company who offers appropriate learning guides and seminars. Its crucial to know as much as you can about what is financial spread betting? before starting.

The major companies are CMC Markets, IG Index and City Index. All three have seminars and trading courses. At CMC Markets, there are different courses from the more advanced spread betting courses to the courses for beginners. The training at CMC Markets has real-life strategies and covers the foundation of Foreign Exchange. Ashraf Laidi, Chief Market Strategist at CMC Markets hosts the education courses at CMC Markets.

IG Index, the longest-running spread betting company offers a range of free work shops, including online seminars, office seminars, and they also offer a six-week TradeSense educational programme which is their own comprehensive course covering everything you need to know about spread betting. David Jones, the Chief Market Strategist runs the seminars at IG Index.

City Index also offers guides to training, demo accounts and seminars as well. It is highly advisable to analyse each company to ensure you’re going with the best one for you.

Before depositing funds in a live spread betting account, it is an excellent idea to open a demo account first. This gives you the chance to see exactly how spread betting works, as demo accounts look exactly like a live trading account. This is a great idea if you’re spread betting forex or any market.

As with all trading and investment, there is an element of risk involved and if the market moves in the opposite direction to your bet, you may lose your money. Remember the golden rule, don’t bet with money you can’t afford to lose.