Choosing a Spread Betting Platform

Choosing a Spread Betting Platform

The first spread betting company, IG Index, was set up in 1974 by Stuart Wheel and was closely followed by the City Index.  However since 2,000 a ton more spread betting brokers and platforms entered the market offering spread betting services on major stocks, bonds and currency trading markets.  Spreadex and Finspreads launched in 1999, CMC Markets in 2001, ETX Capital and Capital Spreads in 2002 and 2003, and even Betfair launched their own spread betting platform TradeFair in 2008.

But with so many different brokers to choose from nowadays (with 20+ in the UK), what should be the deciding factor when picking a spread betting company to start an account with?

The most common method that new spread bettors use for choosing an account is a sign-up bonus.  Spread betting bonuses can range up to £100, and are a great incentive for signing up new traders and users.

However sign-up bonuses are the tip of the iceberg when it comes to registering an account.  If you play to be involved for the long run there are better things to worry about than naively thinking a sign-up bonus will help you to make millions. One of the most important factors for choosing a spread betting platform is tight spreads and low margin requirements.  Having a tight spread will help you to make far more money in the long run and make bigger profits from your trades.  Capital Spreads is one of the best platforms offering tight spreads, with just a 0.1% spread on the UK 100 shares and 1 point on the UK Rolling Daily 100.

The range and quality of markets that a broker covers are also important.  Strictly speaking, the more markets covered the better; most platforms will allow you to speculate on the major stocks, bonds, interest rates, commodities, securities and currencies (FOREX) markets.  TradeFair offers over 7,000 markets including FTSE 100, DowJones, NASDAW, S&P500 and the German DAX.

Legitimacy and strong reputation is very important too. You need to trust any financial organisation with which you are going to deposit over £100 with.  The majority of UK spread betting companies have solid reputations (such as IG Index and Inter Traders).  We particularly recommend Capital Spreads who are owned by the London Capital Group founded in 1996, and won the Best Spread Betting Provider of the year award by FT/Investors Chronicle in 2009.

Also, a number of features to prevent your risk in spread betting that are offered by world class brokers are helpful.  Stop-loss orders and the ability to place other limit order are one of the most important things that you will come across to limit your financial exposure and risk in trades.  Capital Spreads sets automatic stop-loss orders on all of your trades to prevent new spread bettors from risky trading positions.

Educational features such as seminars, tutorial, FAQs sections and videos on technical analysis and regularly tips for trading provide very strong value to users.  Being updated with news on fundamentals (such as crude oil price changes, government policy, or import/export prices) and the ability to research lots of candle stick data will help you out in long run in spread betting.

Finally, if you are a new spread bettor than you will definitely want to sign up for a spread betting DEMO account before you start a deposit account.  Demo accounts at Capital Spreads give you $10,000 in free money to practice trading with on the demo markets.  You can get acquainted with the software, learn to analyse positions and get used to using all of the different trading options and execute different stop-loss orders.

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