A spread betting companies investors a cost-effective way to speculate on financial markets without actually owning the underlying security. However, as with any form of trading there are risks involved, which can be managed through close monitoring and through stop-loss orders.
Different spread betting companies offer a range of market coverage and trading tools. The best ones will provide access to a demo account, which is important for new traders to get familiar with the products on offer.
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City Index, IG and CMC Markets are the leading spread betting companies and all three offer an excellent variety of online platforms, webinars and trading tools. All offer the ability to trade on all the major stock markets including UK shares, US shares and international stocks. They also offer a good selection of commodities to trade as cash or spread bets. They also all offer a variety of charts and trading indicators.
Some spread betting companies, like Accendo Markets, offer automatic trailing and guaranteed stops. These are invaluable risk management tools which help to minimise losses.
Spread betting companies are authorised and regulated by the FCA in the UK and all hold client money in separate accounts. They are also required to hold the funds in segregated bank accounts which helps to protect investor capital. Unlike traditional share trading, profits from spread bets are free of capital gains tax and stamp duty, making them a more cost-effective method of speculation.