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Spread Betting Companies: New developments featuring Financial Spreads PDF Print E-mail
Written by Will Peters   
Tuesday, 30 August 2011 14:58

Spread betting company Financial Spreads announces it is rolling out limited risk spread betting accounts.


Financial Spreads, a white label of Capital Spreads which is one of the UKs largest spread betting companies, has announce the roll out of a limited risk spread betting account.
The new account is designed to help investors by placing a Guaranteed Stop Order on every new position. A Guaranteed Stop Order puts an absolute limit on how much an investor can lose on a trade without putting a limit on the potential profit.

However, these accounts often limit the markets the spread bettor is exposed to.

The reason is in order for guaranteed stops to work the market has to be highly liquid - there can't be any gaps in the price. In illiquid markets spread betting companies will close you out at the next available price; something that can't be done on a guaranteed stop.

According to Adam Jepsen, spokesman for Financial Spreads, the new Limited Risk Account is ideal for both investors who are new to spread betting and those wanting a little extra safety net when trading.

"Risk management is important, particularly in the current volatile markets. The Limited Risk Account helps to minimise the risk of trading. Every time a client opens a new position a Guaranteed Stop Order is attached and therefore, should the market move against the client the trade is guaranteed to close at a pre-specified level. This safety net should help a range of investors".

"Financial Spreads takes risk management seriously so even our Standard Account automatically adds a Stop Loss to every new position, although these are not guaranteed. The markets can, on occasion, jump straight through Stop Loss level, this is known as 'gapping'. If that happens and the market gaps, a Stop Loss will close a spread bet at the next best traded level.

"A Guaranteed Stop Order is essentially a form of insurance against market gaps and they come at a small cost. When a client has gained some experience with the Limited Risk Account, they can upgrade to a Standard Account where Guaranteed Stop Orders are not mandatory but can still be added to trades," concluded Jepsen.

Before trading, please note that spread betting is leveraged and therefore carries a high level of risk to your funds, it may not be suitable for all investors. It is possible to lose more than your initial investment and therefore you should only speculate with funds that you can afford to lose. Ensure you fully understand the risks and, where necessary, seek independent financial advice.
 

Some Spread Betting Wisdom



A great piece of advice for those looking to get stuck into spread betting. While most spread betting companies love to push their index offerings, most traders fail to make money off them....

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