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Find Your Perfect Spread Betting Broker
Spread betting is a popular way to trade that involves speculating on the future value of an underlying asset. As it is classed as a bet, spread betting isn’t taxed in the UK and Ireland, making it cost-effective.
This type of trade is facilitated by brokers, who make money by charging a spread – which is wrapped around the market price. The product is regulated by the Financial Conduct Authority (FCA) in the UK.
If you want to use this derivative product, it’s important that you find a broker you can rely on – one that offers the best prices and a cutting-edge platform to make your trading experience as smooth as possible.
To help, here’s our guide to finding the spread betting broker to suit you.
Consider Your Strategy
How you trade financial markets and what you want to achieve will have an effect on the broker you choose to work with.
It’s important that you understand exactly how to trade and what can impact your performance before you set out to find a broker to facilitate your spread betting.
Read this research on trading psychology to help you to understand the factors affecting your investment strategy.
Compare Costs
In spread betting, brokers set a buy and a sell price – also known as the offer and bid. The difference between the two is the spread. This makes spread betting one of the few markets where brokers don’t make commission from trades, but instead factor the cost of a given trade into the broker price.
It’s important to look at a variety of brokers to assess their offerings. You should compare the prices, trading platforms and the assets they have to offer you, so that you’re aware of exactly what you’d be getting with each broker.
Explore The Trades Each Broker Can Facilitate
Spread betting can be undertaken across a variety of markets, including stocks, forex, commodities and cryptocurrencies. As such, you need to work out which ones you want to trade on before you start spread betting, and then find the broker that can support you.
For example, if you wanted to spread bet on cryptocurrencies, then it’s important that you find a broker that can faciliate this.
Open A Demo Account
Some brokers will offer a demo account for traders who are new to spread betting, or those who simply want to test out their platform before they deposit any money. You can open a few demo accounts with several of the brokers on your shortlist and play around to see the functionality of their platform and the variety of trades they’re able to facilitate.
A demo account is also a great way to practise spread betting for those who are completely new to the process.
Check If Your Current Broker Offers Spread Betting
If you’re already an experienced trader, check if your current provider offers spread betting before you look for an alternative. Major brokers often offer spread betting as part of a vast suite of services, so if you trade with them already, you can consider using them for spread betting too. This will save you time opening a new account and getting to know unfamiliar software.
Choose A Broker You Can Trust
As you’re going to be entrusting your broker with your hard-earned money, it’s important that you feel comfortable working with them. If you don’t like something about a particular broker, then move on and find someone else to work with.
When entering into any new financial market it’s important that you do your research so that you’re prepared for whatever comes your way. Take the time to follow the above points and explore every option you have before you start spread betting.