LONDON, July 5, 2011 /PRNewswire/ -- Online spread betting companies comparison engine IndependentInvestor.co.uk has issued a warning to CFD and spread betting traders over the potential for increasing market volatility following ongoing unrest in the Middle East and wildly fluctuating prices on the global commodity markets.
With oil prices continuing to behave unpredictably and fears over further stints in production from North Africa, commodity markets have been particularly volatile of late, with a knock on effect for securities and many other asset classes on which spread bettors tend to trade.
While volatility to a certain extent provides earnings opportunities for spread bettors, IndependentInvestor.co.uk has warned that increasingly turbulent conditions could increase the risk profile on individual financial spread betting and CFD transactions, and has urged heightened caution to take account of these increased risks.
A spokesperson for IndependentInvestor.co.uk said that as market conditions continue to swing significantly in an unpredictable fashion, traders should exercise more care and attention over their trading to prevent sustaining heavy losses.
"Volatility is something we all crave as traders, providing us with the opportunity to make substantial profits over a short period of time. The trouble is, when a number of factors combine to make markets wildly volatile and hard to call, the usually difficult task of picking a winning trade becomes even more difficult, while the risks of a heavy loss become significantly greater. With ongoing market turmoil as a result of global events, the markets are continuing to behave in an unpredictable way, which could spell difficulties for traders in the near future."
"For traders looking to take advantage of these conditions, the best advice we can offer is to continue to do your homework, and to make sure that all transactions are staked at an amount that your trading capital can sustain. That way, you can best equip yourself for making trading decisions without increasing the risk beyond what is necessary, to give a fighting chance for your positions and your trading account."
IndependentInvestor.co.uk is an online spread betting and CFD information site, providing a range of articles, tools and techniques for spread betting traders.