Financial Spread Betting During the Credit Crunch

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Financial Spreads: Spread Betting and CFD Trading
Financial Spread Betting During the Credit Crunch

Financial Spread Betting During the Credit Crunch




In such volatile times there will always be opportunities to make a profit and plenty of opportunities to lose more.

One industry that has become even more popular during this period is the financial spread betting industry. Whilst there is currently a ban on shorting financial stocks, investors are still enjoying the ability to buy and sell indices like the FTSE 100, thousands of other stocks and shares, forex markets, crude oil, gold etc. etc.

In such volatile times there will always be opportunities to make a profit and plenty of opportunities to lose more.

One industry that has become even more popular during this period is the financial spread betting industry. Whilst there is currently a ban on shorting financial stocks, investors are still enjoying the ability to buy and sell indices like the FTSE 100, thousands of other stocks and shares, forex markets, crude oil, gold etc. etc.

Naturally many investors like the fact that there are no commissions or brokers fees and that spread betting profits are tax free*.

That is all well and good. Although at this point I should mention that spread betting is not a one way street, it carries a high level of risk to your funds. It does not suit all investors so make sure spread betting matches your investment objectives and if necessary seek independent advice.

In short, you should only speculate with funds that you can afford to lose. And, like the adverts say, 'ensure you understand the risks and seek independent financial advice if and when necessary'.

The above pros and cons are not the only considerations in today's volatile market.

For the investors across the world there are further important considerations: Financial Spreads is one place that fits the bill.

Financial Spread Betting - What About My Funds on Deposit?

As a private customer you are subject to the protection afforded by the Financial Services Compensation Scheme. Your funds are kept in a segregated client money bank account, as per rules laid down by the FSA (now FCA), which is ring-fenced and cannot be used by Financial Spreads for our own purposes.


What happens if I trade on a particularly volatile day? How can I reduce my downside?

The spread betting companies have moved on from the days of unlimited losses.

Financial Spreads, for example, attaches a Stop Loss to every single opening trade you make. So if your trade goes wrong your bet will be closed out when the market hits the Stop Loss. It should be noted that Stop Losses are not guaranteed, eg if the market gaps then your trade will be closed at the next level the market trades at.

Note that Financial Spreads also offers Guaranteed Stop Loss orders.

In such volatile times there will always be opportunities to make a profit. Just make sure you are not taking any risks on who you trade with.


Financial Spreads is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Conduct Authority. Registered address: 2nd floor, 6 Devonshire Square, London, EC2M 4AB.

Written 27 January 2008




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Also see:
73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Spread betting & CFDs trading are complex instruments & come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading these products with this provider. You should consider whether you understand how these products work & whether you can afford to take the high risk of losing your money. Click here to see the risk warning notice.