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Should Stop Losses or Guaranteed Stop Losses be used when spread trading?

no-reply@traderhideout.com (Trader Hideout Editor) — Wed, 30 Sep 2009 10:39:56 +0000

As with all areas of betting, there is no simple answer to this. This is especially true of high risk activities such as financial spread betting. If you are regularly involved in spread trading you may be in two minds whether it is worth using stop losses or guaranteed stop losses when trading spread bets.

The truth is that guaranteed stop losses can be very costly to use; you pay for these stop losses in advance whether they are actually needed or not. However, if you are trading a large position, or if the market is volatile, you should really consider the benefits of using guaranteed stop losses.

There is really no right or wrong answer to which stop loss you should use, the main thing to bear in mind is that stop losses in general are highly beneficial to many spread traders. Otherwise, the trade in question can easily get out of hand and you could end up losing huge amounts of money. This really is the most sensible mechanism to use in order to minimise the potential losses from the bet.

Many people have lost nearly everything due to a lack of risk management on just a few trades, so always remember, it is not which stop loss to use, just make sure you have one. If not, you should be prepared for all eventualities.

Matt Le Tissier won’t be prosecuted for fixing spread bets

no-reply@traderhideout.com (Trader Hideout Editor) — Tue, 29 Sep 2009 10:39:31 +0000

The charges against Matt Le Tissier for fixing a spread bet have been dropped by Hampshire Police. The Police and the Crown Prosecution service have said that pursuing the allegations would not be in the public’s best interests.

According to Mr Le Tissier’s autobiography he was involved in a spread bet in the early 1990s in which he needed to put the ball out of play as quickly as possible as soon as the football match at started. However, his opponent Neil Shipperley was unaware of the bet and kept the ball in play. Le Tissier was set to win a large sum of money had the ball gone out, the longer the ball remained in play the less money he won and the more he lost. Eventually, the ball was kicked out after 70 seconds and Mr Le Tissier neither won nor lost any money.

Fixing spread betting is a serious allegation and can lead to prosecution from the police. It is an illegal activity and if found guilty could land you with an enormous fine as well as a prison sentence.

Getting started with spread betting

no-reply@traderhideout.com (Trader Hideout Editor) — Mon, 28 Sep 2009 11:46:05 +0000

Starting out in spread betting can be daunting. And when real money becomes involved in anything, it’s a risky business.

When first starting out in spread betting, you need to decide who will be your spread betting provider. And then it’s time to begin.

But starting off by risking real money is not advisable. First you need the practise and make sure that you understand the concept of financial spread betting as a whole.

Finding spread betting firms on the internet is not difficult. There are hundreds out there trying to grab your attention but it can be difficult to find one that offers a free account. Once you have done this, start to spread bet commodities.

Spread betting is fast moving and it gives you the chance to trade equities, indices, currencies and commodities in Europe, the US and the Far East from one single account.

The potential to profit from (and lose) large amounts of money is much higher in spread betting than in traditional trading so it can be highly rewarding. But of course, you do need to be careful. There is always the possibility of losing more than your initial investment, but when you fully understand the process and are sensible with your actions, the rewards can be huge.

No tax on your spread betting winnings

no-reply@traderhideout.com (Trader Hideout Editor) — Fri, 25 Sep 2009 11:06:17 +0000

To become involved in spread betting you do not need to have a lot of money to put up. This is one of the common misconceptions about spread betting. Spread betting does not require you to put all the money up front for the commodity that you might be trading on.

Typically you will be asked for on or around 10% of the actual value. When trading on the stock market you have to pay up front for whatever you are trading on. This is one of the great advantages of spread betting. You are also not limited to a maximum or minimum that you have to bet you. You could bet 10 pence if you wanted to.

Some of the other great advantages of spread betting are that there is no stamp duty to be paid on your winnings unlike the 0.5% that you pay on a traditional share purchase. They are also not subject to capitals gains tax.

However, spread betting isn’t for everyone. It isn’t particularly suited to those who are looking for a long term investment. It is more of a faster pace, quick way of making (or losing) money.

What is spread betting?

no-reply@traderhideout.com (Trader Hideout Editor) — Wed, 23 Sep 2009 10:40:16 +0000

Spread betting is when you wager an amount of money on the outcome of an event, or bet that the price of something will change. The purpose of spread betting is to allow an individual to bet that something will go either way. You don’t necessarily have to bet against the favourite team winning a football match. You can choose to go with the underdogs and still have a chance of winning a large amount of money.

Spread betting does however carry a large amount of risk and you should be aware of this before you start to spread bet. Spread betting has grown in popularity in the UK over recent years because of the chances of being able to win a large amount of money without having to put up a large amount of cash up front. In addition, any winnings from spread betting are tax free.

There are also stop losses in place to avoid the better losing too much money. The better can decided at which point he will stop betting on an event should it be losing him a significant amount of money. On the other hand there is also the stop win which will close the bet should it have moved in favour of the better.

Take care when spread betting

no-reply@traderhideout.com (Trader Hideout Editor) — Tue, 22 Sep 2009 10:39:21 +0000

Spread betting can vary hugely. You can bet on almost anything from sports to politics and house prices. The rewards can be huge. But as with any sort of betting, there is a risk and you need to be clued up on it before you begin.

Spread betting on politics and sport is gambling. But spread betting on finance is a completely different scenario. It is a great way of making short term investments and the benefits are endless.

Financial spread betting is often less expensive that dealing through a stockbroker because brokers charge a trading commission and 0.5 per cent stamp duty is payable on share purchases. With financial spread betting however, the only charge to be made is the spread which bookmakers make between the buy and sell prices on bets.

Spread betting profits are tax free too. This is because financial spread betting is seen as gambling by the Inland Revenue, rather than as investing. So any winnings are treated the same as if they were won on a gamble.

But as with any sort of betting, there are down sides and you need to be wary in order to avoid falling into these traps. The main thing to remember is not to be careless and bet too large a size for your finances. Although the potential to make huge money is there – there is also the potential to lose huge money. So put in the practise, research thoroughly, plan and you will be halfway to being a spread betting success.

Where does spread betting originate?

no-reply@traderhideout.com (Trader Hideout Editor) — Fri, 18 Sep 2009 00:00:00 +0000

Spread betting or spread trading as it is sometimes know was developed by a man called Stewart Wheeler in 1975.

Wheeler and a few of his close friends began to bet on the price of gold. Wheeler and his friends set a buy and sell price which they thought the gold would be priced at. They would bet against each other to see who closest to the set price. The price of the gold would be set by the gold merchants and bankers in the city on a weekly basis. If they felt the price of the gold would be higher they would place a ‘buy’ bet and if they thought the gold would be priced less they placed a ‘sell’ bet.

This in turn led to Stewart Wheeler founding IG the International Gold which is the largest spread betting company in the world today.
Spread betting offers the opportunity to bet on the stock market without taking the typical risks found when betting. You can set yourself limits to how much you bet, win or lose so you do not have to worry about losing too much money. You are only required to put a percentage of the price of the commodity up front thus minimising your chance of losing a lot of money.

Spread betting is a form of gambling

no-reply@traderhideout.com (Trader Hideout Editor) — Thu, 17 Sep 2009 10:54:41 +0000

Spread betting is a form of gambling. You are taking an element of risk by betting on the chance of the price of a commodity going up or down. Although normally betting and gambling on the stock market involves a high amount of risk and you can lose a huge amount of money in one go. Spread betting has a system which prevents you from making huge loses but can also prevent you from making as much money like if you were trading shares on the stock markets.

You can spread bet on almost anything you like, such as how many goals Fernando Torres is going to score for Liverpool this season or how many horses cross the finishing line at the Grand National. The possibilities are endless so you can choose whatever takes your fancy.

If you place a ‘buy’ bet you are spread betting that the price or worth of something is going to increase. If you place a ‘sell’ bet you are predicting that the price is going to fall. One of the great things about spread betting is that it is so easy and simple to get started. You don’t need to be a stock broker or have an understanding of the financial markets.

What are the possible reasons for the growth of the spread trading industry?

no-reply@traderhideout.com (Trader Hideout Editor) — Wed, 16 Sep 2009 11:26:40 +0000

For those involved with spread trading or spread betting as it is more commonly known, there is money to be gained from taking part in this industry.

There are also major risks, but spread betting has been a major growth market in the UK over recent years. At the last count, the number of spread traders is now heading towards one million. But, what are the possible reasons for this?

Spread betting is easier to understand than other financial tools and the process is less complex.

Spread betting covers a wide range of markets and not just financial ones. You can spread trade on sport as well as on house prices and other such markets.

Any profits that you make from spread betting are currently free from Capital Gains Tax. A spread trader may also be excused Income Tax on their profits, but this is dependent on if they have another source of income which they rely on.

The flexibility of spread betting means that you can trade outside the usual market hours. The majority of spread betting companies are open 24 hours a day, even when the traditional markets are closed.

As we have covered above, there are many reasons why spread betting is becoming more and more popular in the UK. There are risks associated with spread betting, but as long as you are aware of how the markets can change, it can be a great thing to get involved with.

Put guaranteed stop losses in place to avoid disasters

no-reply@traderhideout.com (Trader Hideout Editor) — Tue, 15 Sep 2009 08:53:56 +0000

Stop-losses are vital with financial spread betting if you want to control the level of risk you are making on any particular spread bet. If you put an appropriate stop-loss in place, this can be a simple and economically efficient way of playing the market on a short-term basis.

With spread betting it is very easy to lose a lot more money than you placed with your original stake. To reduce this risk however does mean that you will have to pay extra. With guaranteed stop-losses you will have to pay for a wider spread of your bet, but this is much safer in the long run.

Many individuals who have just started with spread betting do not heed these warnings and jump straight in without thinking about the consequences.

Make sure you sign up with a reputable spread trading company and take a look at all their products first. Get acquainted with shares, indices and currencies, taking account of the current markets.

Make sure you always consider putting a stop-loss in place. This will make sure you do not have a spread betting disaster and can get to know the markets through a wider spread first.