Spread betting can take many forms. While some traders keep spreads rolling over several days, others buy and sell in the space of a few hours, or even minutes. Financial spread betting provider Finspreads presents an overview of three popular trading styles:
Ways to Spread Bet - Day Trading
Day trading means never holding your spread betting positions for longer than a day – and never overnight. Day traders tend to place numerous spread bets during the day, focusing on narrow spreads and markets with plenty of movement.
Spread betting in this way can be time-consuming and requires close market analysis (whether fundamental, technical or a combination of the two) to select appropriate stocks and positions.
Ways to Spread Bet - Position Trading
Position traders place spread bets for the long term, holding them for weeks or months on end. This style of financial spread betting relies on long-term fundamental analysis of a stock to determine the market’s eventual direction.
Once a trader is convinced that a stock is in a trend and at an appropriate price, they will open a position and ignore any short-term fluctuations in the hope of making a significant profit over a longer period unless they reach their stop loss.
Ways to Spread Bet - Swing Trading
For the swing trader, spread betting is about mining the markets to find stocks which have the potential to move significantly in a relatively short space of time, which can be anything from a couple of days to a couple of weeks.
Swing traders are similar to day traders in that both seek to profit from a financial spread bet with a fast turnaround, but swing trading requires greater technical analysis to single out the stocks with the most generous price momentums on a short-term basis.
Spread bets are leveraged products placing your capital at risk, and are not suitable for everyone. Losses can quickly exceed your initial deposit, so ensure you understand the risks involved.
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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.
'Ways to Spread Bet', Review by D. Jones, last update: 19-Apr-12
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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.
Disclaimer:
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solicitation of any offer to buy. The website content does not constitute investment
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