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3 Things You Didn’t Know About Financial Spread Betting Explained

I’m a big fan of spread betting.

The spread betting phenomenon has opened up financial trading to many more people – it makes accessing the markets so fast, simple and – best of all – cheap!

But it does have its detractors – those who dismiss it as “gambling”, or as too risky.

In my view, financial spread betting can be explained as no more gambling than other investment. Fortunately, the Chancellor takes a different view, which is why it enjoys its tax-free status!

Of course, there’s an argument that if you can make something too cheap and too easy to access – but I’ll leave that debate to anyone stocking up on “buy one, get one free” beers at Tesco – That’s not to say that we can’t all still learn a thing or two about spread betting, so I thought I’d pass on a few points that you really should know if you’re a spread better…

Financial spread betting explained:

1. Long-term spread betters make more money

The statistics go something like this: 90 per cent of spread betters lose money…90 per cent of spread betters use daily bets…Are you thinking what I’m thinking? Spread betting is very well suited to short-term trading because you can deal in and out in small, cost-efficient ways. But that doesn’t mean that it’s restricted to day traders.

If trades run on overnight, your position will usually be rolled over automatically, and you’ll face a daily financing charge. But if you’re holding a position for weeks or months, you may want to consider using quarterly bets, which have a wider spread but not the financing chart.

David Jones of IG Index is quoted as saying that the spread betters who hold their positions longest make the most profit. Of course, this is a sweeping generalization, and don’t get me wrong – that doesn’t mean that you should just sit on your open positions until they show a profit. 먹튀검증

There’s an old market adage that a long-term position is simply a short-term one that went wrong. What I’m talking about here are long-term strategies – these are the ones that look to follow big moves with the trend (as opposed to the day-trading strategies that scalp a few points here and there).

2. Spread betting can protect your investments

Many buy-and-hold investors use spread betting to hedge positions. There’s a lot of confusion and misinformation about “hedging”. And talk about wealthy hedge funds gives the impression that “hedging” is about making more money.

 

 

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