The A to Z of Spread Betting

Oct 19, 2010, 06:19 ET from City Index

LONDON, October 19, 2010 /PRNewswire-FirstCall/ -- Read on for your financial spread betting alphabet.

A is for Analysis

In spread betting, analysis is vital. Fundamental analysis and technical analysis are two popular ways of using the information available to interpret the markets on which you wish to spread bet.

B is for Bear or Bull

The essence of spread betting. Do you believe that the market price is going to fall (bear) or rise (bull)?

C is for Commodities

You can spread bet on a huge variety of commodities ranging from crude oil, corn and coffee to sugar, soybeans and silver.

D is for Demo Account

Spread betting demo accounts represent an ideal way to get used to a real trading platform without risking any of your hard-earned cash. Find out more at

E is for Education

Spread bettors never stop learning, so spread betting seminars ( and webinars can make the difference for traders of all levels.

F is for Foreign Exchange

Also known as FX or forex, the foreign exchange is one of the most widely traded markets in the world. At City Index, you can take a position on over 50 currency pairs including EUR/USD at just 2 points and GBP/USD at 3 points.

G is for Guaranteed Stop Loss

Guaranteed stop losses reduce your spread betting risk in a near-identical way to standard stop losses, except that they guarantee to close your spread bet at the precise trigger value you have set, regardless of market volatility and gapping. For this added insurance, guaranteed stop loss orders incur a small premium.

H is for Hedging

You can protect your spread betting positions in moments of volatility or uncertainty by 'hedging' with CFD trading (

I is for iPhone Spread Betting

iPhone spread betting ( allows you access to your spread betting account at any time and in any place.

J is for Jargon

Ever shorted the pork bellies at a pip from the resistance level? To a beginner, spread betting can seem another world at first; it takes time to understand it.

K is for Knowledge

Knowing your preferred spread betting markets inside out means being able to react effectively when news that affects them emerges. For example, if you were to spread bet on British Airways shares without knowing that a spike in crude oil prices may result in downward pressure on the share price, your spread betting account balance could easily suffer as a result.

L is for Leverage

Financial spread betting is a leveraged product, which means that it requires you to deposit only a small percentage of the full value of every spread bet you make. This means that in spread betting the potential for profits - and losses - from your initial outlay is significantly higher than traditional trading.

M is for Markets

You can spread bet on thousands of global markets including indices, shares, currencies, commodities and interest rates. See a range of spread betting markets at

N is for News

Give yourself a spread betting edge by keeping on top of market developments and financial news. City Index's trading experts publish a daily market commentary which you can view at

O is for Orders

Limit orders are the upside version of stop losses, instructions to buy or sell a better price than where the market is currently trading.

P is for Plan

Instead of trading on instinct and feeling, always have a considered, rational strategy in place before you start spread betting. Outlining your entry, objective and exit before each spread bet means that you know exactly how far to let your profits run and precisely when to cut your losses.

Q is for Quote

A spread betting provider's quote will incorporate its spread - the difference between the buy and sell price of the financial product in question.

R is for Risk

Financial spread betting is a leveraged product which carries a high level of risk. Even the best spread bettors make losses - the key is to make sure that your profits outnumber your deficits. See 'Plan'.

S is for Standard Trading

Spread betting offers an alternative to standard trading, providing additional features such as leverage, the ability to go short (trade on a falling market) and tax-free profits*. Read more on the differences between spread betting and standard trading at .

T is for Technology

From spread betting webinars to mobile trading platforms, embracing technological developments helps you to get the most of your financial spread betting.

U is for UK 100

A share index of the 100 largest companies (by market value) listed on the London Stock Exchange. During market hours, spread bettors can take advantage of a UK 100 one point spread at City Index (

V is for Volatility

The more volatile the market, the greater the scope for bigger spread betting profits and losses.

W is for Wall Street

An index of the top 30 US traded stocks. City Index currently offers a Wall Street one point spread during market hours.

X is for X Marks the Spot

With the advent of mobile trading ( and iPhone spread betting, spread bettors can now trade wherever they want.

Y is for You

From day trading and short-term spread betting to medium and long-term trading, understanding your own natural spread betting identity helps to maximise your trading potential.

Z is for Zero Tax*

Spread betting is currently exempt from UK stamp duty and UK Capital Gains Tax*.

    Learn more about financial spread betting at

Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

*Spread betting and CFD trading are exempt from UK stamp duty. Spread betting is also exempt from UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

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SOURCE City Index