Archive | Financial spread betting

Spread betting is a great way to trade upward markets, downward markets, and side ways markets. Here we investigate spread trading strategies and other uses for spread betting such as hedging investment portfolios.

How to use the VIX index

This post is not so much about a spread betting strategy but an indicator that can be used to predict when the markets (share markets) will turn. The VIX index AKA the Fear Guage is a good indicator to use when spread betting shares. At present the markets are getting quite frothy, rampant even. The reasons for this include the massive injections of money into financial systems in the western world. It has given some people watching the markets ‘the shivers’, as quoted by Alan Abelson on Barron’s.

So what’s the VIX index and how can it be used for spread betting

Share markets are often said to be driven by fear and greed. It’s comes down to crowd psychology where there’s an event that makes everyone either greedy and wanting to invest buy more, or fearful of the future causing ‘the crowd’ to sell like crazy.

The VIX index measures expected volatility in markets by using clever algorithms based on the options market. In basic terms options can be used as a form of insurance by professional investors against a large drop in the market.

How can the VIX index be used as part of a spread betting strategy?

Spread betting relies on market volatility. Share prices must be moving either up or down for a spread trade to become profitable. As an gauge of expected volatility the VIX index is great at indicating when market will turn. Not exactly when, but it’s enough to focus the attention. Combined with traditional and simple spread trading techniques such as looking a price charts, simple moving averages and volume of shares traded it forms a powerful indicator.

A low reading on the VIX index is an indication of calm in the markets. What spread traders watch out for is a sharp reversal in the index. This would foretell a sudden change in sentiment which is a high probability indicator that markets will drop. Quickly and by large amounts. A high reading indicators significant fear in the market and normally accompanies lows points in the market.

financial spread betting

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Which spread betting account is best for me?

Spread betting companies offer different types of account to cater for people with different skill level and starting capital. Generally spread betting accounts can be divided into 3 main types. It is easier to talk about these accounts in general terms because each spread bet provider will offer a different flavour to their accounts. This way you can find an account that really suits you.

The features to be considered include spread betting accounts which require cleared funds, limited risk accounts and credit accounts. There are other factors that should play a part in deciding what spread betting account to open, for example, minimum bet size. Lets look at each in turn.

Spread betting account types

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The biggest financial market

This post will provide an introduction to forex opportunities, give insight into why forex markets can be profitable, and will help readers gain the basics of forex trading.

Forex trading was not available to retail investors originally when online spread betting first started in the 1960’s. Only banks and life insurance companies had the resources. As spread betting companies developed their operations they began to offer online forex trading. The growth of spread betting and online gambling has made is simple for retail investors to take part. Many spread betting companies now operate in the forex market. Such competition has led to companies offering user friendly trading platforms with simple order systems, charts, and technical support. It is worth shopping around. A spread betting company that allows you to stake small amounts is a good starting place. Forex markets are priced to four decimal places. This means a very small move can result in very big wins or loses. To start your journey into forex markets it’s advisable to start with small stakes.

Spread betting forex markets

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