Spread Betting is a type of trading that can
turn anyone into a trader. It is especially popular in the UK because of the
incredible tax benefits it brings. For UK and Ireland residents any gains made
while Spread Betting have tax write offs and are also exempt from stamp duty.
That’s because the UK considers Spread Betting as a type of gambling rather
The interesting thing here is that Spread
Betting is almost exactly the same as CFD trading, which globally is regulated
as a type of trading. However this distinction very much works in the favour of
the UK/Ireland resident. TRADE.com is a very well known brokerage firm
that offers a platform to both the home-based beginner or even the more
professional and experienced trader. The platform which is available through
the web can be accessed by anyone that has a computer and of course access to
The platform itself was developed and built in-house by this intuitive European brokerage firm. When you think of traders, you might instantly think of bankers looking at 6 or 7 screens and shouting into a sqwawk box in order to place a trade. However now the parameters have completely shifted and retail traders can use laptops, tablets or even a smartphone to trade with.
Spread betting is quite simple in theory. The
idea is to trade the price movements of a variety of assets. For example, will
the price of Oil rise or fall? The price of oil is always moving. A number of
factors moves it, for instance how much inventory there is how much demand
there is for oil and geopolitical factors like tensions in the Middle East.
Every asset you can think of is always moving in price and has a variety of
factors that makes it move.
Your job as a trader is to understand the
factors that can move the asset, and to identify if the asset price is moving
upwards, downwards or across. Noone can predict these movements correctly all
the time, however it is something that you can become better at doing. That
happens by learning. In effect the more you learn the better you become at
understanding where the price of that asset will go.
bulls and the bears
One of the key aspects that makes Spread
Betting desirable is the fact that you have the option to trade in both bullish
and bearish markets. You have probably heard these terms before so what do they
Bullish like it’s name suggests is a market
that is charging forwards, where the trend is usually going upwards as a sign
of strength. Bearish markets are the opposite. If you imagine a bear hiding
behind a tree, this will help you understand why bearish markets move
You can place a trade in both of these types
of markets. As an example let’s look at the price of Apple stock. Apple releases
its company earnings, and let’s say that they have had a great quarter, earning
more than analysts had predicted. This positivity will usually push up the
price of Apple as it becomes more valuable and desirable. If you buy at a lower
price and sell at a higher price then you can realise profits by the gap
between the two prices.
The converse is also true. If you believe that
the price of Apple will surely sink due to some negative news coming out about
them, then you are better off selling or shorting the price. This means buying
high and then selling low.
It is important to note that with Spread betting, you will never actually own the underlying asset as you will with stock trading for example. If you are trading the EUR/USD (Euro dollar) you won’t be buying the currency, rather you will be speculating on the price movement.
Why trade with TRADE.com?
TRADE.com gives you the ability to trade
through their platform. It’s worth noting that the platform comes with some
really useful features like news events that can move the assets prices,
technical analysis on advanced charts which can help you add studies in order
to help understand where the price trend is going. They also give you price
alerts which you can set up for notifications on asset price movements.
TRADE.com falls within the umbrella of a
regulated firm. In fact the group has regulations in many regions in the world.
Regulation is important when choosing a broker to work with as it brings
certain levels of security, reliability and protection.
If you are interested in engaging with the
money markets, start by checking out the TRADE.com website and
remember if you have any questions or need some guidance their support staff
are available to help you.
HIGH RISK INVESTMENT WARNING: Spread bets and CFDs are
complex instruments and come with a high risk of losing money rapidly due to
leverage. 73.84% of retail investor
accounts lose money when trading spread bets and CFDs with this provider.
You should consider whether you understand how spread bets and CFDs work, and
whether you can afford to take the high risk of losing your money.