Spread betting is considered gambling by some and trading by others. Regardless of what you call it is a high-risk way to speculate on financial markets.
Spread betting online
There are a lot of great spread betting platforms available online where you can do spread betting, so there is no need to settle for one that isn’t great and doesn’t suit your needs and preferences. Putting some effort into choosing a spread betting broker carefully is something I strongly recommend, because it can have a huge impact on the future success of your project.
Also, before you sign up with any platform, inform yourself about spread-betting and create a thought out a basic strategy for your project. You will most likely need to adjust this strategy as you gain more experience, but it is still a good idea to have some sort of plan in place before you start, e.g. which markets to focus on, how much to risk, how to diversify, etc.
With a basic strategy in pace, it will be easier for you to select a broker that fits that specific strategy, e.g. when it comes to the size of your bets and which things to bet on.
Choosing a trading platform (broker) for spread betting online
It is easy to get obsessed with finding the broker who offers the biggest possible sign-up bonus, but that is usually a very poor way of choosing, and in the long run, other features will be much more important for your bankroll and your trading experience.
Here are a few examples of things to look out for when choosing a broker for spread betting:
- The trading platform. Is it easy to use and understand? Does it run smoothly on your computer and with your internet connection, or does it seem to be way too heavy and/or riddled with bugs?
- The costs associated with trading. What will you pay to use this platform for spread betting? Is the pricing model suitable for your style of spread betting?
- How competitive are the spreads compared to other brokers?
- Does it offer spread betting on the markets / underlying that you are interested in?
- What’s the minimum deposit requirement?
- How small/big bets can you do?
- If you plan on margin trading/leverage, what are the rules and conditions for that?
- Are automatic stops and similar safety precautions available?
- Before signing up with any broker, get in touch with the customer service to see how they treat you. Also, can you connect with the customer service through your preferred method? If you prefer to use live chat and they require you to you make an expensive phone call abroad instead, you will not be happy in the long run.
- Who owns the platform, where is the company based and which jurisdiction(s) are applicable? Is it properly licensed?
- Does the broker have a generally good reputation among other traders online?
- Is customer-owned money kept separate from company assets? (This is hugely important in the event of a bankruptcy filing or similar.)
- What resources are they offering you when it comes to tools, charts, news feed, etc?
- Which transaction methods are available for deposits and which one for withdrawals?
Try out the platform using play-money first
Before you start risking your hard-earned cash, try out the platform with play-money. Most platforms offer this feature. It is a great way of becoming more familiar with the platform and learn how it works, and it can save you from making costly mistakes.