The spread betting brokers are those that offer the lowest trading fees, the fastest execution speeds, and a user-friendly trading platform. They also provide a wide range of trading instruments, including forex, shares, commodities and indices, as well as offering competitive spreads and low margin requirements.
The profits or losses on a spread bet are calculated by multiplying the bet size by the unit of movement on the asset you bet on, typically quoted in either points or pips. All spread bets have a duration between one day and a few months, although you can close trades earlier or later if you wish.
Unlike traditional assets such as shares, with spread betting you don’t own the underlying asset. Instead you are speculating on whether the market will rise or fall and you will be provided with a spread quote, which will contain a ‘sell’ price and a ‘buy’ price. If you believe the market will rise you will open a ‘long’ position, and if you think it will fall you will open a’short’ position.
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A good spread betting broker should be regulated by the FCA and offer a safe and secure environment. They will also provide a number of customer support channels and a trading app. Pepperstone, for example, offers a live chat service and a dedicated phone line that operate 24 hours a day. They also offer a free demo account, which allows you to try out the platform with virtual trading funds.