Wednesday, 3 November 2010

Spread Betting Companies

Prior to starting out with financial spread betting you need to find yourself a spread betting company. Now this can be hard work... there are so many spread betting companies that it can actually be quite daunting.

Don't panic!

I am going talk you through everything you need to look out for.

OK, so where do you begin? I will assume at this point that you have done your research about financial spread betting and have decided to give it ago. If you aren't at this stage yet then you aren't ready to be looking for spread betting companies.

If you are new to it then you want to try and start with a practice account. Lots of brokers do offer these services so make sure that you try them. The last thing that you want to do is start trading only for you to make simple mistakes that cost you money.

You will be using leverage so it is important you start off trading small. Look for a spread betting company that offers small minimum bet sizes. This will enable to get some experience without risking too much.

By now you should know the types of markets that you want to trade. There are lots for you to choose from including... stocks, currencies, commodities, interest rates and many more. Your spread betting company should allow you access to the markets you want. If they don't then you need to look elsewhere.

You might want to do some research into their customer support. Now this is tricky to do before the event but there are indicators you can take advantage of. You can look for reviews on the internet but be careful as they always tend to be biased towards the negative. This is because people in forums tend to complain more than they praise.

Why not try them for yourself? You can give them a call beforehand. Ask some questions and request some literature. Get a feel for how they operate.

Most spread betting companies will provide you with access to some charting software. While this is nice it may probably not be as good as some of the other subscriptions out there. If you don't have a subscription like this then the software on offer becomes more crucial to you.

Many of the brokers will offer cashback to open an account with them. While this might sound attractive be careful. Your decision should be made based upon all the factors that we are discussing here, not just the shorter gain.

It is more important to look at your ongoing costs. Spread betting companies don't receive commissions from the trades. They make their money through the size of the spreads, i.e. this is how it costs you. You want you broker to have tight spreads.

I hope that this has given you something to think about and provides you with enough knowledge to find the right company for you.