Now that you have a good idea what to expect, you can think about opening a spread betting account. While you have a lot more to learn, it is useful to be able to follow along, looking at charts and other information that your spread betting provider may supply. Often you can open a free practice account to try out the online interface before you have to put in any money. You should try to decide which provider you want to use before doing this so that you don’t get swept into opening an account just because you tried their demo version.
Opening an account is very easy. It’s just like opening a bank account. You need to provide your name, address, and other information so they can check your credit history – remember the spread betting company needs to be cautious so that they don’t lose money. Even while they check your background, you may be able to use a free account to familiarize yourself with spread betting.
Picking the Provider
But before you open an account, you will want to see which spread betting provider seems to offer the best deal for the products you want to bet on. Here’s a list of things that you want to check –
- Do they offer the range of products you want to bet on?
- No really, not just do they offer stocks, but do they include the ones you’re interested in?
- Do they answer the phone, and seem to know what they’re talking about?
- Do you like the trading platform that they offer?
- Do they give automatic stop orders, and how are they worked out?
- The big one – how tight the spreads on the things you want to bet?
The last point, the tightness of spreads, can be critical depending how much you trade. Don’t forget this is an ongoing cost to your betting, so even a little difference impacts your profit over the year. Compared to this, the trading platform is less important as you can get used to differences, as long as it is fully functional. Don’t forget that your computer may break down, or your Internet connection fail, and try to make sure that there is a way to, at least, close out your spread bets in a timely manner, for example with telephone support.
If you have any friends who spread bet, then their feedback can be valuable. You can also go online and look at forums and bulletin boards for other users’ comments. You have to be very careful when doing this. Firstly, one disgruntled client out of thousands will be vociferous, and make a lot of noise, which may give you the wrong impression. Secondly, it’s not unknown for some of the less scrupulous companies to put out glowing reports on their business. It’s true, and it is documented but I won’t embarrass the companies by naming them.
If you can, it can be useful to visit the spread betting firm. Most companies will welcome you and show you around, and you can get a good idea of how they work. Depending on your circumstances, you may be interested in the minimum account size and in the minimum spread bet size which the company will permit. The minimum account size may be as little as £100, and spread bet minimums are usually £1 or sometimes 50p, but it’s worth checking. At least one spread betting provider allows smaller spread bets for the first few weeks of your trading so that you can get used to it.
Most spread betting providers offer technical research and market commentaries as complimentary addons to their trading platform with free access to the latest financial information including: share prices, trading volumes, dividend data, charting and a news service.
Opening your Spread Betting Account
- It is very easy to open a spread betting account.
- Decide on the spread betting company you want to apply to
- Go to their website, and complete an application form online for an individual account.
- Your account should then be opening in 24 hrs.
- Most companies don’t perform credit check, but I reckon they perform identification checks, just to confirm that you are who you say you are.
We are firstly going to look at Financial Spread Betting (Trading) companies. They supply us with some of the free information that we need. And of course, you are going to have to have an account with one of them (or more) should you wish to earn money with them.
All of the Financial Spread Betting (Trading) firms are very well run. They all have their plus points and I am loathed to recommend anyone in particular.
But if you are brand new to financial spread betting (trading), I recommend that your first account be with Capital Spreads. Purely because they have a training demo simulator for beginners and you are able to place trade with from as little as £1 per point (or less).
All of the firms have very good websites. Some are easier to use than others, and again, Capital Spreads comes top of my list. But please do not be put off any other firms because of my view. Try them all out for yourself.