17m 47s: Lenght

How Spread Betting Works by http://www.spreadbettingportal.com/spread-betting Technically it's trading - Trading is trading, whether it's in spread betting or within the 'real' market - The skills needed to find a trade, to manage it, to adjust a trade and to understand where that trade could go, are the same skills that professional traders use - Spread Bets can be opened in the same markets; Index, Commodities, Forex and Shares How Spreads Work - Spread bets use live financial data presented in chart form via a online portal with the spread betting company. Typical Trading Portals - Allow access to the markets you can trade - Provide charting tools - Instant access to your account - Allow a place to trade quickly and easily - Provide a means of creating porfolios and more What are Spread Bets - Based on Futures contracts - You can trade up (bullish/long) or down (bearish/short) - Your trade has no value - you are not buying anything, it's a 'bet' against you and the spread betting company as to which direction the market will move. The more you are right in one direction, the more you will profit. The more you are wrong, the more you will lose. There is protection - To protect against nasty losses you can use a 'stop loss' - A price level set when you open the trade, to close the trade automatically if hit. - These can be adjusted up or down, to move up with the profit of the trade to 'lock in profit' or widen to increase the exposure and risk in the market. Types of Spread Bet - Rolling Daily Trades or sometimes called 'Daily Funded Bets' are a trade where, they are left open till closed either by you or by your stop loss. You benefit from tighter spreads, the trade can be left open as long as you wish, but do incur an over night interest payment. These are best for short term trades such as 'Swing Trades' - Quarterly Trades, based on when the Futures market contract dates close, usually the third Friday in the following months: DEC, MAR, JUNE, SEPT - Any trade left open on the third of the above months will be automatically closed. These are best used for longer term trending trades, rather than anything short term, due to the much wider spread. You control more for less - 10:1 allows for the control of larger trades - Carries a faster risk of loss due to gearing of 10:1 meaning a loss 10 times (on your deposit) for 1 times the normal move.... BUT! - Carries an equal faster gain of 10:1 should the trade go in your favour. How a trade works - Company XYZ shares are trading at 800 (£8.00) in your portal with your broker, they provide a 'spread' of 795 -- 805. - One penny or cent (excluding Forex) in trading terminology is known as a point - You decide from your skills in 'Technical Analysis' that the price may increase You make a trade with the broker - You open a trade at 800, at £10.00 per point -- meaning for each point above the spread at 805, you will make a profit of £10.00 - Let's say it reaches 820 and you close the trade. You have made 15 points x £10 = £150. Congratulations! You were right. You can trade going down too - Let's assume you think the value of company XYZ will fall and will go down below 800. Your quote was 795 -- 805 from the broker - You place a 'Short' trade, expecting it to fall in value. It goes to 775. Open at 800, close at 775, spread to 795, 775 -- 795 = 20 points or £200 profit at £10.00 Sounds great what's the catch? - You obviously only profit if you are correct. - The broker / spread betting company will take any losses you make from the deposit of cash you have placed in your account - When you open a trade, the broker will take a proportion of your deposit as security on that trade. - Each trade will cost you the spread When things go wrong! - Let's use the 'long' upward trade example. Company XYZ opened at 800, with a spread of 795 -- 805 at £10.00 per point - XYZ share goes down in value to 775, but you expected it to go up in value - 800 (open) -- 775 = £225 loss (including the spread) - This also happens when a 'short' down trade goes up in value instead What the *&%$ is the 'Spread' - The spread betting company make a profit between the point you can profit from either a buy or sell. This is the intrinsic cost of making a trade. - Company XYZ live price 800, spread 795 -- 805, the broker takes a profit of your trade size per point x 5 points either side. - Many brokers now provide 1 point spreads on the more popular trades. ALL RIGHTS RESERVED. www.SpreadBettingPortal.com Reproduction, republication or redistribution of this material is prohbited except for linking to this video. Please note that spread betting is leveraged trading and therefore high risk, so bet responsibly!