There has been a massive rise in the number of financial spread betting companies coming into the market over recent years and they are fighting with each other so that YOU select them.
You are in the driving seat – You are in control.
The great thing about this is the facilities they offer keeps improving, the customer service is getting better, the range of different types of bets keep growing and probably most importantly the cost of trading is coming down.
More financial spread betting companies means more choice and sometimes that causes a headache for some people. This post doesn’t recommend any account specifically; it acts as a checklist to stop you from feeling so overwhelmed.
One thing to remember before we begin is that you can change your mind in the future if you wish; you are not stuck with them forever. You can change to another financial spread betting company so don’t worry too much – top spread betting companies.
Dummy / Practice Accounts
Whenever you read a book or view a website for beginners they tell you to do some paper trading first. Now you can set this up on a spreadsheet and that would be fine. With paper trading you do miss out on the emotions that come with real trading and the potential of losing real money. You should do you best to replicate the conditions that you will be using when trading live to really get the most out of it.
This means using a financial spread betting platform and many companies offer a demo account for you to try. Why not try the account out and practice at the same time? With these practice accounts you can sometimes choose your starting capital. Don’t go crazy, pick the amount that you will be starting with, it will make it more realistic.
If I have a problem I would like to be resolved as quickly and painlessly as possible. We want a choice of emailing or telephoning the company.
But how can you assess the customer service before you open an account?
Even though the new account literature is on the internet for all financial spread betting companies these days, why not call them and ask them to post it to you? This is your chance to put them through their paces. If they aren’t good at dealing with potential new customers then how good will they be if you are an existing customer and have an urgent problem?
Think about checking out trading forums on the internet. Word of warning here, people like (love?) to moan. I would advise not to read old posts. Instead, start a new topic asking people to recommend a financial spread betting broker, you will be surprised how many will share this with you.
Review sites can also be good but watch out here also. Often the person reviewing the site will receive a referral fee if you sign up after clicking on their link. Make sure they have used the service themselves. Why not ask them questions?
Why you are financial spread betting? You want keeps the costs of trades as low as possible, with spread betting you don’t pay commissions, financial spread betting firms make their money through the size of the spread. It is at this point that you may want to think about opening at least 2 different accounts.
In financial spread betting there are many different styles of bets. It is important that you understand each one. Now you need to ensure that the account offers the style of bet you want, If they don’t then obviously you need to look elsewhere. As mentioned earlier, the increased number of different financial spread betting companies means that they are offering a greater variety of products these days for you to choose from so it won’t be a problem for you.
Different levels of accounts
You will often find that a financial spread betting firm will offer a range of accounts. Sometimes it gets a little confusing by which one will be suitable for one’s needs. The determining factor is usually the level of experience that you have. The golden rule is that if they are offering credit then they are for the more experienced trader. If you in anyway confused about which one to choose then give the company a call and ask them. This is another great way to test their customer service.
Minimum bet size
This will be extremely important to those of you who are just starting out. It is important because the size of your bet will determine the amount of money that you are risking. Again the competition amongst brokers has meant that the minimum bet sizes have fallen.
As you should already know, when you are financial spread betting you are dealing with leveraged products. You need to know the margin requirements so you know how much exposure you have and avoid being subject to any margin calls.
Additional account functionality
What other functions do you need to trade? Stop losses? Do you want these guaranteed? How much does that cost? Can you set up contingent orders? Write down each function that you want the account to offer and tick each one off as you check out each account.
How good is the trading software?
You may have your own software for analysis but you will still need to use their software to actually make the trades. It is vital that you can use it and that it is both reliable and quick. The last thing you want is to press the trade button and for it to hang there for ages, or even crash. This is hard to check with demo accounts as they often run off different systems to the live accounts. Again you can ask in forums for other traders’ opinions on financial spread betting firms’ trading platforms.
It would be nice if by signing up to an account that you could get access to additional support. See if they have training or seminars that they offer. This isn’t essential and you need to be careful of any sales pitches but would be a nice extra.
Account opening incentives
You will find these days that you are bombarded with offers to open an account. Offers can include cashback, tighter spreads for a limited time or other financial incentives. Now this shouldn’t be a criterion for opening an account for the long term but why not take advantage of that with a second account?
Opening a second account
This may not be as important to you when you are just starting out and have a low level of capital but do keep it in mind. There are a couple of reasons why you should consider it if you are to take your trading seriously. The most successful traders out there have a number of accounts.
The first reason for this is the ability to get the best quote. Financial spread betting is hard. Anything you can use to your advantage is great, even half a point on the spread will make a difference. By having more than one financial spread betting account you will be able to read multiple quotes at the same time. You will then be able to trade of the better one. It will take time for you to reach this level but if you can trade this way then you will be ahead of a lot of traders.
The second reason is contingency. These days spread betting trading platforms are a lot more stable nowadays. They don’t hang as much and they are very rarely down. The spread betting companies put a lot of time and money into making sure that this doesn’t happen. What if it does? What if the financial markets are going crazy and you want to trade? Do you think you will be able to get through on the phone if this is the case? Not a chance, that is what everyone else will be doing. A second account should be able to get you through an event like this.