LONDON, March 8, 2012 /PRNewswire/ --
Spread betting is one of the most accessible forms of trading the financial markets due to its low margin and high leverage feature, ultimately providing an easy entry level for new traders.
Currently in the UK, spread betting is a tax-efficient way of trading the price movements of thousands of financial markets globally as all gains are free from UK Capital Gains Tax. However, UK tax laws remain subject to change and may differ depending on your individual circumstance.
By spread betting you have the potential to profit from a falling market by going short and selling. With every point a market falls, you make a gain. Comparatively, each rise in the market when you go short or sell would net you a loss.
As mentioned above, as a leveraged product you only need to deposit a small percentage of the total value that you wish to trade, making it a popular choice with new traders.
These traders can potentially magnify their gains, yet this is a double-edged sword as they can also magnify their losses; sometimes exceeding their initial deposit.
It is imperative for traders to fully understand the risks as well as the rewards when placing trades.
Here we look at five spread betting tips to help you simplify your trading experience.
Stop losses limit your downside potential by automatically closing a spread bet as soon as the market passes through your pre-determined trigger value.
Guaranteed stop loss orders are the most efficient risk management tools compared to standard stop loss orders, as they guarantee to close your trade at the exact trigger value you have set, even when market gapping occurs. There is a small charge for guaranteed stop losses however and they are not available across all markets.
With many markets available to trade 24-hours a day, such as foreign exchange, mobile trading is an effective way to keep up-to-date with your chosen market's developments whilst allowing you to make trades instantly and securely.
With so many markets to choose from, it is central to your trading strategy that you know all you can about those that you decide to trade.
The daily market commentary from the financial trading experts at City Index will help you to analyse the spread betting markets and take a clearer view on the direction of future price movements.
Through City Index, traders can access free seminars, webinars and a 14-day demo trading account designed to help hone analysis skills and trading strategies without risking capital.
Learn more about spread betting and CFD trading at http://www.cityindex.co.uk/
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for difference (CFDs) and, in the UK, spread betting.
We constantly look to improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. Visit http://www.cityindex.co.uk/ for more information.
SOURCE City Index