Spread trading

Hi..does anyone have any advice on the pros/cons of spread trading? Have had a quick look at it...just wanted to know what the limitations are on extracting any gains from your account?..can you withdraw as often as you like or are you required to keep a certain float?...Is it a case that you just lodge an amount each time you want to trade?...would people recommend this type of trading over and above buying actual shares?

Thanks

Mr Mac

Ya. You can withdtraw cash wherever you want.

Undoubtedky it is the best way to play the markets.

Thanks for that..

Mr Mac said:

Hi..does anyone have any advice on the pros/cons of spread trading? Have had a quick look at it...just wanted to know what the limitations are on extracting any gains from your account?..can you withdraw as often as you like or are you required to keep a certain float?...Is it a case that you just lodge an amount each time you want to trade?...would people recommend this type of trading over and above buying actual shares?

Thanks

Mr Mac

Click to expand...

pros - you can open a deposit account for relatively small amounts (€1000 or even less) and so long as you meet the margin requirements, a bet(s) can keep running until the contract(s) expires.
- winnings/profits are tax free
- no account fees in general, usually the only charge is the spread itself
- stop losses can be placed to prevent catastrophic losses if market goes against you
- internet aswell as phone trading

cons - the obvious, really, if market goes against you regularly, you'll lose your investment!
- some of the firms offer pretty bad spreads so you should be careful when choosing who to use.


Overall I'd say it's an excellent way of playing the market though, given the fees and commission prices involved
in trading actual stock (particularly with irish brokers)

An excellent guide to spread betting is The Financial Spread Betting Handbook: A Guide to Making Money Trading Spread Bets by Malcolm Pryor.

It's not a beginner's guide but if you have any idea of how spread betting works it's an excellent place to start.

Well worth a look.

Mr Mac said:

Hi..does anyone have any advice on the pros/cons of spread trading?

Click to expand...

Spread trading as opposed to spread betting generally refers to trading futures spreads. Because of the hedge inherent in the nature of the spread trade margin requirements are usually significantly lower for spread trades than for the outright futures contract.