LONDON, October 19, 2010 /PRNewswire/ -- In financial spread betting, it is vital to understand the market or markets you wish to trade before you start spread betting. The value of this understanding is magnified by the sheer variety of markets available to spread bettors today, with providers such as Finspreads ( http://www.finspreads.com) offering financial spread betting on equities, indices, currencies, commodities, interest rates, options and many other financial products. Just read on for an overview of five of the markets at your spread betting fingertips.
Shares spread betting:
Shares spread betting is a way of trading thousands of UK, US, European, and Asian shares listed around the globe. Financial spread betting in this way is seen as a flexible and tax-efficient* alternative to traditional share dealing, as it allows you to trade on share price movements, both up and down, without holding the underlying investment directly. Finspreads offers shares spread betting on everything from UK 100 and UK 250 companies to leading shares from the Wall Street, US TECH100 and the US SP 500 indices.
Indices spread betting:
Spread betting on indices allows you to trade on the price movements of the UK 100, US TECH 100, US SP 500, Hong Kong 34, Japan 225, Germany 30 and other leading indices around the world. Spreads bets on indices are popular for several reasons, one being that allow a spread bettor to trade on and take a view of a group of shares rather than just one individual share. Indices spread betting also represents a straightforward way to take out an approximate hedge against a share or fund portfolio.
Currency spread betting:
Also known as foreign exchange, forex or FX trading, currency spread betting ( http://www.finspreads.com/about_spread_betting/trading_examples_to_spread_bet /currencies.aspx) is based around the relative performance of one currency against another. For example, if you expected sterling to strengthen relative to the dollar, you would buy the sterling/dollar. Conversely, you would sell euro/yen if you expected the euro to weaken against the yen. With Finspreads you can spread bet on all the major currencies, including the US dollar, Australian dollar, Canadian dollar, Swiss franc, Euro, British pound, Japanese yen and the New Zealand dollar.
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Currencies are the largest market in the world and can be volatile, but it is perfectly possible to use tools such as guaranteed stop losses to manage your risks while trading these markets.
Commodities spread betting:
Commodities spread betting gives you exposure to markets including precious metals, crude oil, soya beans, corn, cattle, coffee and more. For the financial spread bettor, commodity markets trade very much like any other product in the spread betting markets. Demand and supply drive the price up or down, and traders aim to profit from the spread bet opportunities provided by these price movements.
Commodity markets, particularly oil, can be very volatile with sudden dramatic price movements that can be difficult to predict. For this reason, many retail spread bettors prefer to focus on equities or indices spread betting. Read more about risk management in spread bettomg at http://www.finspreads.com/learn_to_spread_bet/managing_your_risk.aspx.
Bonds and interest rates spread betting:
Unlike other forms of financial spread betting, spread betting on global bonds and interest rates means that if you think a short term price will fall, you buy, and if you think it will rise, you sell. Bonds spread betting offers exposure to instruments that would not otherwise be accessible to retail traders, namely interest rates set by the Monetary Policy Committee (MPC) of the Bank of England (BoE), the Federal Open Market Committee (FOMC) and the European Central Bank (ECB).
Never open a spread betting position on a market without having at least a basic knowledge of how it moves, what affects it, any underlying volatility and if there are any forthcoming announcements that may impact its price. Understanding a market in this way gives you the opportunity to react quickly and correctly when news that affects your spread betting emerges. Moreover, it can also help you to know where to place stop losses or limit orders.
Finspreads spread betting seminars represent an ideal opportunity to get to know the markets in more detail. Find out more at http://www.finspreads.com/learn_to_spread_bet/spread_betting_seminars.aspx.
Read about the spread betting markets in more detail at http://www.finspreads.com/our_services/spread_betting_markets.aspx.
Spread betting carries 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.
*Spread betting is exempt from UK stamp duty and UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.