FTSE Spread Betting Guide

I am writing this after just watching the emergency budget being presented to parliament in the UK. As I return to my desk to view the financial markets I see that they are down by over 1%. For most people this is bad news, but for people who do FTSE spread betting they can make money in falling markets.

The vast majority of people don’t know what FTSE spread betting is or how to do it. It is different to owning actual stocks because you make a bet of the direction of the market. You go either long or short depending on which way you think the market is moving, long if you think up and short if you think down.

You can bet in a couple of different ways and you should choose one that suits your personality. The first style is called a binary bet. You decide how much that you want to stake and then when the markets close you will see how much you have won or lost.

There is an alternative way of FTSE spread betting and that is through the daily bet or the rolling daily bets. Probably the biggest difference between both bets is that the daily bets aren’t fixed in the amount that you can lose or ineed profit. With the binary bet you win the same amount no matter if you were just right or very right. With the daily bet options you will win a lot more being very right than being just right.

This can be a really great way of trading but if you get it wrong you may end up losing a lot of money. This is because you are trading with leverage and can lose more money than you initially put down.

It is up to you to decide if FTSE spread betting is suitable for you. It does not attract and tax including capital gains tax (CGT). As the Chancellor put up CGT earlier today it does make it more appealing.

FTSE Spread Betting Options

The Chancellor of the UK has just finished reading the emergency budget to parliament. I look at the financial markets and they are down quite a bit. Most people who are invested in the stock market will lose money as a result of this. There is a way of making money when the market falls and that is through FTSE spread betting.

A lot of people don’t know what FTSE spread betting is. It is a way of trading the financial markets which is a bit different from owning the actual shares. You decide which way the market will go then you make a long bet if you think it will go up or a short bet if you think it will go down.

There are 2 popular bets that you can use. The first is the binary bet. This is very similar to bets in the sporting arena where you know the how much you can we or lose before you start. It is a very transparent way of doing it.

The second way of FTSE spread betting that I will go through is the rolling daily bet. The daily bets are still more common than the binary bets although the binary bets are increasing in popularity. The main difference between the two is that with the rolling daily bet you win or lose depending on how right you were. If the FTSE moves in your direction a bit then you win a bit, if it moves in your direction a lot then you win a lot.

Trading this way gives you great flexibility but at the same time it can be very risky. You trade on a margin so you are using leverage. This means you can lose more than your initial deposit if you get it wrong.

There are advantages and disadvantages to FTSE spread betting. Another advantage is that it doesn’t incur capital gains tax in the UK. Capital gains tax was increased in the budget today so makes this more appealing.

FTSE Spread Betting Options

The Chancellor of the UK has just finished reading the emergency budget to parliament. I look at the financial markets and they are down quite a bit. Most people who are invested in the stock market will lose money as a result of this. There is a way of making money when the market falls and that is through FTSE spread betting.

A lot of people don’t know what FTSE spread betting is. It is a way of trading the financial markets which is a bit different from owning the actual shares. You decide which way the market will go then you make a long bet if you think it will go up or a short bet if you think it will go down.

There are 2 popular bets that you can use. The first is the binary bet. This is very similar to bets in the sporting arena where you know the how much you can we or lose before you start. It is a very transparent way of doing it.

The second way of FTSE spread betting that I will go through is the rolling daily bet. The daily bets are still more common than the binary bets although the binary bets are increasing in popularity. The main difference between the two is that with the rolling daily bet you win or lose depending on how right you were. If the FTSE moves in your direction a bit then you win a bit, if it moves in your direction a lot then you win a lot.

Trading this way gives you great flexibility but at the same time it can be very risky. You trade on a margin so you are using leverage. This means you can lose more than your initial deposit if you get it wrong.

There are advantages and disadvantages to FTSE spread betting. Another advantage is that it doesn’t incur capital gains tax in the UK. Capital gains tax was increased in the budget today so makes this more appealing.

FTSE Spread Betting Options

I have just been watching the Chancellor of the UK present the budget this lunchtime. A quick look at the markets and you will see that they are down by 1.5%. Most people who have stocks and shares will have lost money today but there is a way of making money during falling markets and that is through FTSE spread betting.

So what is FTSE spread betting? The name ‘betting’ gives it a bad name. Yes it is betting but so is all financial ‘trading’. What happens is that you decide which way you think the FTSE 100 is going to go and then you take a position either long or short.

There are also different types of bets that you can put on. The binary bet will suit you more if you just want to be rewarded for either being right or wrong. It is very similiar to that of fixed odd betting you get in sports as you know exactly the amount you can win or lose before you initiate the bet.

The other bet that you can use with FTSE spread betting is daily bets or rolling daily bets. These work differently to binary bets as the amount you can lose or win will vary depending on performance. This amount is determined by how much the market either moves in your favour or against you. Either you are very right and win a lot or you are very wrong and lose a lot.

This trading does give you flexibility but it does have its risks. This is because it uses leverage as you trade on a margin. This can be great when you are profiting but can be devastating if you make mistakes.

FTSE spread betting has disadvantages and advantages and it is up to you to decide if it is suitable for you. You may have seen that the Chancellor increase the rate of capital gains tax today. You will be please to know that spread betting is currently exempt from tax in the UK.

Spread Betting Strategies Musts

When you are sure about your spread betting strategies then you can apply them to stocks and shares, currencies, commodities and indices. For all of these markets you can trade on different timescales. If you are lucky enough to be trading for a living then a lot of your trades will be intraday with some lasting a couple of days. Spread betting strategies can be use to trade both weekly and monthly charts.

Why are you spread betting? Are you attempting to make profits or offset risks (hedging) using spread betting. It is important that you know exactly what your spread betting strategies are depending on your trading style.

If your answer for ‘why are you spread betting?’ is because you like the thrill then you really need to reconsidered if you should be doing it. You shouldn’t trade because you need trade for satisfaction, you need sound spread betting strategies.

A common error that traders have is not planning properly. Put your plan on paper before you enter your trade to ensure that it is formulated correctly. It is recommended that you create a proforma requiring you to answer specific questions about the planned trade to ensure that it is inline with your spread betting strategies.

Traders often make errors with the size of trades they put on by misunderstanding the leverage. It is essential that you know how much your are risking per trade by understanding your leveraged position.

Are you good at disposing of your losers? Have you heard the saying ‘run your profits’? Well that is what you should be doing with your spread betting. You need to let your profits runs and cut your losses. For each trade you need to set up stop losses and they should be adhered to religiously. It should never be part of your spread betting strategies to give yourself more leeway when the trade moves against you. Move on to the next trade once it has hit its stop loss. If you wait and be patient there will always be more opportunities available to you.