Spread betting companies
Wondering how to choose between spread betting companies? This article discusses all you need to know in order to make the right choice for you....
While the UK is now awash with spread betting firms and brokers competing for your business, choosing the right one can still seem a daunting task for those new to financial spread betting. This page is intended to help you cross that bridge.
Consider the spread on offer from various spread betting companies:
the transaction costs associated with spread betting are built into the difference between the price at which you can buy and sell various instruments. Therefore, you need to ensure that the spread betting firm that you choose offers favourable spreads. Do your homework because some spread betting brokers will advertise great spreads for particular popular markets without mentioning anything about other markets that they cover. What you want is a broker that has tight spreads across the board. Remember, the wider the spread, the more you pay to trade. Profitable online spread betting is hard enough without losing money on wide spreads.
Price fill and slippage varies across spread betting companies:
do you get a different dealing price to the one originally quoted, or do your orders get filled at a better or worse price? It is worth watching out for any differences in quoted prices and actually dealing prices. Since a spread bet is based on an underlying security or market, the price of the two should move in tandem. Consequently, while the market is open, your dealer should execute your trades at the prevailing market price. If you are unable to deal at the market price, perhaps it's time to open an account with another company.
Quality of trading platform varies across spread betting companies:
ease of use of trading platform, need for complicated downloads or simple web interface? You want the spread betting process to be as effortless as possible to mitigate the chances of errors due to technology. Some spread betting brokers are better than others in this regard.
Range of markets covered:
Not all spread betting companies cover all markets. Indeed some brokers only cover a handful of markets. While this may not necessarily be a problem (in fact, a limited number of markets may be a blessing in disguise for a new trader, since it helps you to focus), it pays to know that there is a wide range of potential trading opportunities available to you should you want to take advantage of different opportunities.
Extended trading hours:
can you trade at any time of the day to suit you? Some spread betting companies now offer the possibility of round-the clock online trading. While you may not want to trade 24 hours a day, it may be very useful to be able to place a trade that you have researched once you get back home from work in the evening if you are not a full-time trader. This provides a major advantage over traditional share trading where traders who make trading decisions at the end of the trading day on the basis of the daily closing price have to wait till the markets open again the following morning in order to place a trade.
Options for placing the trade:
does your spreadbetting broker offer facilities for trading by phone as well as online? How about mobile trading on iphones and the like? With the wide range of spread betting companies offering online trading platforms, there is no reason why you should not go for the broker that offers you the greatest convenience.