Spread betting with City Index allows traders, whether new or experienced, to speculate on the price movements of a wide range of financial markets, irrespective of their direction. An attractive alternative to more conventional forms of trading, there are four key reasons as to why new traders choose to spread bet.

1. Low Margin Feature

Firstly, its low margin features makes trading the financial markets easily accessible, requiring only a small percentage of the full value of a position as the initial deposit – typically between 1% and 10%.

2. Market Exposure

Secondly, unlike conventional forms of trading, traders can gain exposure and trade on the price movements of over 12,000 financial markets, including indices, shares, currencies and commodities.

3. Tax Efficient

In addition, spread betting is presently free from Capital Gains Tax and Stamp Duty in the UK. (Tax laws are subject to change and depend on individual circumstances)

4. Profit from a Falling Market

Finally, traders have the ability to profit from a market that falls as well as rises. With the option to go long and ‘buy’, profits can rise in line with any increase in that market’s price.

On the other hand, with a market that falls, traders can go short and ‘sell’; whereby their profits will rise in line with any fall in that market’s price.

However, it is important to keep in mind that if a trader chooses to go long, and the market goes in an opposing direction; losses will be incurred. Similarly, if the trader chooses to go short and prices rise, losses will be incurred.

With this in mind, the margin feature is also a double-edged sword; there is potential for not only significant profits from an initial small capital outlay – but losses as well.

What is a ‘spread’? 

Where spread betting is similar to conventional trading; two prices are quoted for all spread bet trades, for example, a buy price and a sell price.

The buy price is the price at which you can go long, on the basis you expect the underlying market’s price to rise; the sell price is the price at which you can go short, on the basis you expect the underlying market’s price to fall.

The ‘spread’ itself is the difference between the buy and the sell prices.

As a trader, you will be looking for the tightest spreads available, as this will help you to maximize your profits when market movements occur.

The wider the spread, the longer it will take for you to make a profit.

Financial spread betting offers traders, new and experienced, a wide range of benefits. From its low margin feature, to the potential to profit from a falling market; spread betting is an easily accessible alternative to traders looking for exposure to over 12,000 markets.

It is imperative you remember that spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

The article City Index Provides New Tool for Traders appeared first on The Toonari Post - News, Powered by the People!.

As the FTSE 100 fell 5.5% last year, investors turned to spread betting [http://www.cityindex.co.uk/spread-betting] with the hope of gaining from the falling markets and this has continued in 2012.

As global stock indices fall, savvy investors saw an opportunity as they rushed to short sell stocks and indices in hope of profiting on these falls by spread betting on further misfortune.

Whilst today traders insist that there is money to be made from plummeting stocks as much as rising prices, in truth the tactic can still be somewhat difficult to get your head around, with many investors heads ingrained in the notion that you can only make money in a bull market.

Watching the Market

Only recently have investors been able to speculate more easily on shares, particularly those that are falling. With the arrival of innovative and accessible online trading tools [http://www.cityindex.co.uk/trading-platform/online-trading-platform.aspx] and real-time financial news and charts – speculating has opened up opportunities for ‘going short’ on the market.

Through City Index [http://www.cityindex.co.uk ], investors can access an online trading platform, allowing them to:

• Place trades securely from their computers 24 hours a day
• Access over 12,000 markets including global shares, indices, forex, commodities, bonds and options
• Instantly access real-time financial news and analysis feeds from Dow Jones Newswires
• Access the City Index interactive live charting package which includes a range of technical analysis tools
• Create multiple watch lists to monitor potential future trades

Going Short In a Bear Market

Because spread betting [http://www.cityindex.co.uk/spread-betting/spread-betting-features.aspx] allows you to profit in a falling market by going short and selling, it has proven to be incredibly popular for trading in a bear market, such as this.

If a spread bettor is able to interpret the signs and then react quickly enough, a falling bear market can be every bit as profitable as a rising bull market.

Joshua Raymond, Chief Market Strategist at City Index said “this is what makes spread betting so flexible. No matter which way the market is going, there is always the potential to make a gain.”

Alternatively, traders can open buy positions with the markets at what they perceive to be their lowest point to capitalise on the market recovering and profiting as prices rise.

Summary

Investors who see an opportunity to profit from a fall in global stock indices such as the Dow Jones index or FTSE 100, could profit from this by short selling these markets through spread betting. However, spread betting [Speculation: Spread Betting On the Falling Market to Profit appeared first on The Toonari Post - News, Powered by the People!.