Benefits Of Financial Spread Betting
Although the stock market has been responsible for making more than a few people rich. The majority of people who dabble in this market lose. Financial spread betting is a way in which a trader can speculate on the price of shares and stocks, and do this without the aid of the middleman, namely the stockbroker.
Speculation on the movement of stocks and shares when you don't have to pay commissions to a broker has its benefits. It basically means that the trader makes more profits. The trader is required to place a wager on financial markets and if the prices of these will increase or fall.
The "spread" refers to the "Sell/bid or Buy/offer price. These prices are calculated based by adding more points to the live market price of the product (financial) and this is the estimated future price. This price is quoted by the spread betting company. An example of this is if the Daily FTSE trades at 4729, then the company will quote figures of say 4727 - 4731 and the trader places a bet on this price.
To open a new position in the market a very small deposit is required, generally about dollar, euro, pound10 - 40. Each bet is on each point or tick in which the market moves, either up or down. The stake is usually 1 on each point of movement and will represent either profit or loss.
Each financial market has their own maximum stake allowed, so you bet your 1 pound, dollar or euro per tick (point), choosing a bet that the market price will increase or alternatively, drop. If your wager is correct then you win or rather make a profit which is the amount of your wager or stake multiplied by the amount in which the market moves in your favor. If you wager is incorrect you lose your stake multiplied by the amount of points the market moves in the opposite direction.
Because of this fact, the financial spread better has to understand that the market is often able to move quite substantially in the opposite direction to the wager made. This can mean a substantial loss, but by the same token, if the market moves in the direction predicted, a substantial profit can be made.
In the UK profits from spread betting are considered to be the winning of a "bet" and this makes them free of Capital Gains and Income Tax.
New spread betters should always practice with a demo account first to see if they are able to grasp the concept. Learning about spread betting first without any financial risk is the best approach. The demo account will emulate precisely how a live account will react and it comes with a guide for beginners.
Exposure without risk in a demo account inspired confidence in the trader and once they have fully grasped the concept, they can open a new position with a live account. The financial spread betting firm you use, must offer you a demo account, if they don't you should look for a company which does offer this facility, it is very important. - 23211
Speculation on the movement of stocks and shares when you don't have to pay commissions to a broker has its benefits. It basically means that the trader makes more profits. The trader is required to place a wager on financial markets and if the prices of these will increase or fall.
The "spread" refers to the "Sell/bid or Buy/offer price. These prices are calculated based by adding more points to the live market price of the product (financial) and this is the estimated future price. This price is quoted by the spread betting company. An example of this is if the Daily FTSE trades at 4729, then the company will quote figures of say 4727 - 4731 and the trader places a bet on this price.
To open a new position in the market a very small deposit is required, generally about dollar, euro, pound10 - 40. Each bet is on each point or tick in which the market moves, either up or down. The stake is usually 1 on each point of movement and will represent either profit or loss.
Each financial market has their own maximum stake allowed, so you bet your 1 pound, dollar or euro per tick (point), choosing a bet that the market price will increase or alternatively, drop. If your wager is correct then you win or rather make a profit which is the amount of your wager or stake multiplied by the amount in which the market moves in your favor. If you wager is incorrect you lose your stake multiplied by the amount of points the market moves in the opposite direction.
Because of this fact, the financial spread better has to understand that the market is often able to move quite substantially in the opposite direction to the wager made. This can mean a substantial loss, but by the same token, if the market moves in the direction predicted, a substantial profit can be made.
In the UK profits from spread betting are considered to be the winning of a "bet" and this makes them free of Capital Gains and Income Tax.
New spread betters should always practice with a demo account first to see if they are able to grasp the concept. Learning about spread betting first without any financial risk is the best approach. The demo account will emulate precisely how a live account will react and it comes with a guide for beginners.
Exposure without risk in a demo account inspired confidence in the trader and once they have fully grasped the concept, they can open a new position with a live account. The financial spread betting firm you use, must offer you a demo account, if they don't you should look for a company which does offer this facility, it is very important. - 23211
About the Author:
Before engaging in Financial Spread Betting Strategies, check out the authors blog on ODL Markets Trading
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