Spread betting is free of stamp duty and also exempt from Capital Gains Tax*. This makes it a very attractive option for those new to trading, or anyone who wants to make their portfolio work harder for them. Here, provider City Index offers spread betting tips for those new to spread betting.
Spread Betting Tips for Beginners: Margin
Many traders use up their margin with a single opening trade. The reason this is detrimental is that it leaves you with little surplus in your account to allow for price fluctuations. Always hold back extra margin to cover your position should the markets go against you, or your trade could be closed out.
Spread Betting Tips for Beginners: Stop Loss Orders
You can place stop losses to close your trades at set price points, therefore never risking more of your capital than you intend to. Though there is a small additional charge for a guaranteed stop loss, it will never close your trade any lower than the level at which you set it.
Spread Betting Tips for Beginners: Avoid Large Individual Trades
If you place a large spread bet in one market, your success or failure depends solely on the movement of that one market. Spread your trades, across the markets that you have a good understanding of, in order to diversify your risk.
Spread betting and CFD trading carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.
Content approved / provided by City Index Limited which is a company registered in England and Wales, number: 1761813. Authorised and Regulated by the Financial Services Authority. FSA Register Number: 113942.
Note - Spread Betting carries a high level of risk to your capital and you can lose more than your initial investment, it may not be suitable for all investors. Ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved and seek independent financial advice where necessary.
'Spread Betting Tips for Beginners', Review by D. Jones, last update: 15-Nov-11
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Risk Warning:
Spread Betting carries a high level of risk
to your capital and you can lose more than your initial investment,
it may not be suitable for all investors. Ensure you only
speculate with money that you can afford to lose and that you fully
understand the risks involved and seek independent financial advice where necessary.
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* Tax Free Trading:
Tax law is subject to change. It may also differ if you pay tax in a jurisdiction outside the UK.
