subject: How to Choose the Right Spread Betting Platform [print this page] How to Choose the Right Spread Betting Platform
How to Choose a Spread Betting Platform
Spread betting in the UK has become extremely popular in recent years, and the FSA now estimates there are just under 1 million spread betting accounts, with 30,000 new accounts opened this year alone. Traderfair's CEO has also reported an annual growth rate of between 20 and 30 percent in the UK.
If you choose to start spread betting, nowadays you will find over 20 different UK spread betting companies to pick from (in addition to many other companies based outside of the UK). The massive choice means we now need to provide some sort of filtering options to be able to categorise the best platforms from the worst. So how do we go about choosing and rating spread betting platforms?
First of all, give the fact that a lot of money will be at stake you need to pick a broker with a solid reputation and history. If you're planning on depositing 100+, with up to 1,000 in trading positions held up in leverage, you need to be dealing with a reputable company with strong customer support. One of the best brokers, Capital Spreads, is owned by the leading financial instutition the London Capital Group, started in 1996 and regulated by the FSA and listed on the London Stock Exchange. Firms like this and TradeFair both have excellent reputations in the industry and are highly rated by users. Capital Spreads even won the the best spread betting provider award voted by the FT/Investors chonricle in 2009.
The second thing to look for is a good coverage of financial markets and tight spreads. Tight spreads are very good (such as 1 pip) because it allows you to increase your profit margins on trades and reduces the commission that the company takes off you. A good coverage of financial markets is also very good, and you need to make sure that your broker covers the major stock indices (FTSE, Nikkeux, DowJones, DAX), the securities markets, currency (FOREX), interest rates, government bonds and commodities. Generally speaking the more markets offered the better.
Finally, if you are a new spread bettor than you will want to open a demo account. Companies such as Tradefair allow you to do this which gives you $10,000 in free money to play around and invest with. This allows you to become acquainted with the software, get used to executing orders such as stop-loss and buy-limits, plus monitor your trading positions and using technical charts for analysis. The advantages to a demo account are that you don't have to risk any money and upgrading to a real money account is easy.
